Secretary of State George Shultz's visit to Indonesia this week - intended to discuss cooperation among Pacific nations - wound up with Mr. Shultz in the center of a dispute over trade policies between industrialized and developing nations.
Strong criticism of American economic policies and high interest rates and charges that the United States and other industrialized countries are becoming too protectionist were leveled by some members of the Association of Southeast Asian Nations (ASEAN) and ministers of Pacific countries meeting with Shultz in Jakarta.
Shultz countered that US economic policies are doing more than any other policy to benefit developing countries, with US imports growing year by year. And he said there is a greater degree of protectionism in the developing than in the industrialized countries.
''If,'' said Mr. Shultz, ''the United States is running a highly protected economy, it has done a pretty lousy job of it.''
But that line of reasoning was not accepted here. Singapore's foreign minister, S. Dhanabalan, said it can be argued that it is not right to apply the same trade rules to economies that are only just developing as are applied to industrialized nations.
''There can be no equality among those who are not equal,'' agreed Indonesian Foreign Minister Mochtar Kusumaatmadja.
The ministers agreed on a form of loose cooperation among Pacific nations. But the concept of a Pacific Basin community, championed by many US State Department officials, was firmly rejected.
Another key subject at the meeting was Vietnamese actions in Kampuchea (Cambodia). The tone of the meeting's stand on Kampuchea was set earlier in the week when ASEAN ministers issued perhaps their strongest statement yet against Vietnam and its estimated 170,000 troops in Kampuchea.
The statement bitterly criticized Vietnam for what it described as the colonization of Kampuchea. It also accused Hanoi of indirect involvement in recent border clashes between Thailand and Laos.
A senior official from one delegation said that for the first time diplomatic niceties had been dropped and ''street-fighting language'' had been used to give Vietnam a clear and unequivocal message.
Singapore and Thailand were the prime movers behind the tough position. And they were pleased that Indonesia, which earlier this year began efforts to improve relations with Vietnam, gave its full support to the statement.
ASEAN was also optimistic about the growing strength of the noncommunist forces of Prince Norodom Sihanouk. His troops are said to be increasingly able to balance the power of the Khmer Rouge in the three-member coalition that is trying to oust the Vietnamese from Kampuchea.
Hanoi quickly responded that ASEAN countries are deceiving themselves. It accused Thailand of manipu-lating the association. But ASEAN's stand was backed by others at the meeting - Japan, Canada, the US, New Zealand, and a delegation from the European Community.
Australia's offer to be a host for talks on Kampuchea between ASEAN, Vietnam, and Laos was firmly rejected. Much publicity was given to a plan put forward by Japanese Foreign Minister Shintaro Abe, which offered Japanese help to peacekeeping forces and the supervising of free elections in Kampuchea. But the plan had the proviso that Vietnamese troops must first start withdrawing. Some felt the plan was so impractical that they wondered if Mr. Abe was presenting it merely to assert himself as a statesman and gain points in advance of a campaign for Japanese leadership.
Secretary Shultz reasserted US support for ASEAN and said Washington placed the highest priority on its relationship with ASEAN countries.
This remark may have been intended to mollify concern among some ASEAN countries that worry about Washington's recent agreement to sell arms to Peking.
Shultz also said Washington was waiting for a full accounting from Hanoi of almost 2,500 Americans listed as missing in action in the Vietnam war.
In his first meeting with Indonesia's Mr. Mochtar, Shultz caused some consternation when the issue of Indonesian actions in East Timor was raised. (Indonesia, which annexed East Timor in 1975, is fighting an insurgent movement in the former Portuguese colony.)
However, it was later pointed out that Dr. Mochtar had merely been shown a letter signed by more than 120 US congressmen, and he seemed convinced that the Reagan administration was not making a complaint.
Hong Kong, July 7-9
US's keen interest, if not active role, in Hong Kong's 1997 transfer from British to Chinese control
Kuala Lumpur, Malaysia, July 9-10
Impact of closer US-China ties and pending arms sales; regional security (Vietnam-backed Kampuchea); bilateral trade and US investment; narcotics law enforcement
Singapore, July 10-11
Regional security; counterfeiting of records, tapes, videotapes
Jakarta, July 11-14
Key meeting with foreign ministers of ASEAN and their major allies: trade and security (Vietnam and China); economic integration in Pacific Rim
Canberra, July 14-15
Australia's Labor Party conference; New Zealand elections; ANZUS defense treaty
Wellington, New Zealand, July 15-18
Annual ANZUS meeting; New Zealand vote; Australian, New Zealand resistance to US nuclear ships using their ports
Honolulu, July 18-19
Importance of Pacific nations to US