Summit was '87 coup, but leftover issues await '88. Key foreign policy areas this year were linked: the Gulf war, the Iran-contra affair, and the Central American peace process. None has been resolved.

From the low ebb of the Iran-contra affair to the ceremonial signing of a treaty to do away with some nuclear weapons, 1987 was a foreign policy year of humiliation and satisfaction, of severe challenge and modest success for the Reagan administration. In many ways, the old year set the agenda for the new. While 1988 could be the capstone year of efforts to forge nuclear arms control treaties, the unsolved problems of 1987 - the Gulf war, conflict in Central America and the Middle East - will still bedevil the administration as it puts the finishing touches on its foreign policy record.

By all accounts, the signal foreign policy event of 1987 was the superpower summit, held here Dec. 8-10. President Reagan and Soviet leader Mikhail Gorbachev seem to have forged a kind of working relationship in which they are able to discuss their differences frankly and without rancor, while making progress in areas of common concern.

The two men instructed their arms control negotiators to narrow differences in a treaty cutting each country's strategic nuclear arsenal by half. The job is to be done ``preferably in time'' for a Moscow summit meeting ``in the first half of 1988.''

The final Reagan-Gorbachev communiqu'e provided, in surprising detail, some of the specifics to be included in the treaty.

They built upon a treaty eliminating certain kinds of intermediate nuclear forces (INF). The document, which was signed on the first day of the summit, had been laboriously hammered out during much of 1987. It is notable because, for the first time in history, both sides agreed to eliminate an entire class of nuclear missiles, those having a range of from 310 to 3,440 miles. The INF treaty also provides two important precedents for future arms-control negotiations. One is that reductions can be asymmetrical; that is, the Soviet Union will give up nearly four times as many weapons as the United States, but both sides will end up with none. Another provides for on-site inspections in both US and Soviet territory by inspectors from the other side, to ensure that missile-production lines are not restarted or missiles redeployed.

The President and the Soviet Communist Party general secretary specifically directed negotiators to build upon the accomplishments of the INF treaty as they press ahead to limit long-range, intercontinental nuclear weapons.

Three of the major foreign policy developments of 1987 were linked: the Iran-contra affair, the Gulf war, and the Central American peace process. Throughout the summer, Congress held hearings into secret US arms sales to Iran and the skimming of profits for use by contra rebels fighting the government of Nicaragua.

One by one, key figures of the Reagan administration testified, disclosing startling details of a covert foreign policy gone awry. The majority of the House and Senate committees investigating the affair concluded that a ``cabal of zealots'' had been in charge of the policy, running roughshod over the normal constitutional process of government.

The hearings made for stunning political theater. Secretary of State George Shultz testified he had been left in the dark about many details of US foreign policy and its execution. The committees concluded that the Iran-contra affair was ultimately a failure of people, not the process itself. But it also found that the events flowed from a failure of leadership by the President.

Subsequent developments in the Persian Gulf and Central America underscored the unintended consequences of the administration's actions.

Having failed to sway the so-called ``moderates'' within the government of Iran through secret weapons sales, the White House eventually embarked on a risky plan to reflag Kuwaiti oil tankers as American vessels and provide US military protection against attacks on them by Iran.

As the year draws to a close, American warships are still in the Gulf, presiding over an uneasy standoff. Iran and Iraq are still locked in bloody combat, and the US - perhaps in part because of the loss of the power of moral suasion on the topic - has been unsuccessful in obtaining a worldwide arms embargo against Iran.

An Arab diplomat says that 1987 was a year in which the US and Arab states found a ``growing convergence of interests'' in the Gulf, but also found themselves increasingly at odds on other Middle Eastern issues.

The US failed to materially advance the peace process in the region. Lebanon continued to self-destruct, and there was growing violence in the Israeli-occupied Gaza Strip and on the West Bank of the Jordan River. This area of conflict will remain on the US agenda for 1988, especially if violence continues to flare.

In Central America, there was fitful progress toward peace, but the Reagan administration found itself largely cut out of the efforts. A Central American peace plan, calling for cease-fires and an end to outside military intervention in the region, won a Nobel Peace Prize for its principal author, Costa Rican President Oscar Arias. The plan quickly eclipsed the administration's own peace plan for the region, brokered between the White House and Speaker of the House Jim Wright (D) of Texas. The White House was left a marginal player, partly because of lingering congressional pique over the Iran-contra affair.

There was yet another foreign policy setback in 1987. The Reagan administration was unable to secure a specific timetable for Soviet withdrawal from Afghanistan. And continuing trade imbalances - sparking earth tremors on Wall Street and a fall of the dollar to new postwar lows on world markets, underscored the shakiness of the US grip on its own economic future. Efforts to improve the trade picture and bring America's own budget deficit under control were uneven, with results decidedly mixed at year's end.

The unfinished business of 1987, then, will probably dominate the agenda for 1988, since it is unlikely that President Reagan can launch many new initiatives during his last year in office.

If the US can complete a strategic arms reduction treaty with the USSR next year, says a senior administration official, it will count its tenure in office a success.

Another senior official says the prospects are ``publicly 50-50'' for doing that, but ``privately 60-40'' against, because of the daunting problems of verifying compliance with the treaty.

Nevertheless, both US and Soviet officials say President Reagan and Soviet leader Gorbachev will meet in Moscow next year, with or without a treaty to sign.

Second in a series reviewing 1987 and looking ahead to next year. Tomorrow: social issues.

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