Shultz's `Gifts' to New Team at State. To the end, outgoing secretary of state made decisions benefiting new foreign policy crew. CLEARING THE DECK FOR BUSH

January 25, 1989

SECRETARY of State designate James Baker enters office with a stunning series of last-minute gifts from his predecessor, George Shultz. ``This was no lame-duck administration in foreign affairs,'' sums up a ranking United States diplomat, who participated in several of the key moves taken at the end of the Reagan presidency.

``Rather than sitting back for his last months in office,'' says another official who watched from the White House, ``Shultz saw an opportunity for making tough decisions and made the most of it.''

Not every foreign affairs adviser to the new Bush team was completely pleased.

``George left us a number of knots we have to live with,'' says one well-placed adviser, who was uncomfortable with the decision to open a dialogue with the Palestine Liberation Organization. But he says other Shultz moves were beneficial, sparing the new administration some tough decisions.

Others are more positive. ``Though it was not a primary consideration in any of the decisions,'' a top State Department official says, Shultz and his advisers ``considered how each one would affect the options for Baker. We see them all as helpful gifts.''

Such ``gifts'' include:

Libya. On the last full day of his term, President Reagan approved amending US economic sanctions on Libya to allow US oil companies to operate their oil concessions there through third- country subsidiaries.

``George Shultz has never liked economic sanctions, and this one gave Col. [Muammar] Qaddafi a windfall and hurt long-term US interests in Libya,'' a well-placed official says. ``He felt this was a mess he helped create, and he wanted to clean it up before he left.''

This official and others close to the new team say it was much easier for the Reagan administration to make this decision given its tough record on Libya, rather than put the burden on President Bush and Mr. Baker. They could have been accused of being soft on Colonel Qaddafi and of caving to US oil interests.

Soviet Human Rights and Conventional Arms Talks. In November and December, Shultz played hardball with Moscow. The Soviets demanded that the Conference on Security and Cooperation in Europe (CSCE), meeting in Vienna, approve a CSCE human rights conference for Moscow for 1991. The US said it would agree to such a conference only if Soviet human rights practices improved. This stance held up the conclusion of the Vienna meeting and indirectly the beginning of CSCE-sponsored talks on conventional force reductions in Europe.

By early January, Moscow ended radio jamming, took major steps on emigration, refusedniks, and political prisoners, and promised more reform. Shultz decided he had squeezed as much as he could from Moscow, say informed US diplomats. It was time to wrap up the Vienna meeting so the Bush team could start with a fresh slate and focus on the conventional arms talks, one diplomat says.

Once again, Shultz's decision also freed the new administration from having to take the political heat from conservatives for accepting the principle of a human rights conference in Moscow. ``He left the new guys all the options to review Moscow's human rights performance and US support for the conference,'' a well-placed US diplomat says. ``Baker even made some points with the Right in his confirmation hearings by being able to say he was uncomfortable with the decision,'' adds another.

PLO. Shultz's decision to begin a dialogue with the PLO may have the greatest impact on the options open to the new Bush team.

On a domestic political level, it was much easier for Shultz to make that decision, given his proven record of strong support for Israel. That definitely muted what could well have been a loud outcry from the American Jewish community, if a new, unproven secretary of state had made the move, informed Washington insiders say.

Despite misgivings by some, the majority view in Washington is that the US move has created new momentum for the Bush team to work with.

Officials say Shultz was careful not to preempt Baker on the substance of the US-PLO dialogue. He authorized only one full-scale meeting and one contact. The rest is up to the new team to decide.

Southern Africa. When Chester Crocker, assistant secretary of state for African affairs, wrapped up his eight-year mediation of the Angola-Namibia problem in December, it opened up a new possibilities for building further cooperation in southern Africa.

There will be difficulties in implementing the accords and handling Angola's still-hot civil war.

But the agreements remove a long-standing problem, begin movement for better relations between South Africa and its neighbors, and can be a precedent for closer US-Soviet cooperation elsewhere.