America's bludgeon
AMERICA'S frustration with Japan's restricted import markets is understandable. Year after year, United States and Japanese officials have negotiated and blustered, appeared to reach limited agreements on market-opening measures and then found themselves back at their talks as Japan's trade surplus has continued to grow. In the first year of Bill Clinton's presidency, the US has clocked up a record US$53.9 billion deficit.
US officials are seeing red - and most of it is the red ink on corporations' balance sheets.
But the resurrection of the controversial Super 301 trade law - allowing the US to impose retaliatory tariff increases for allegedly unfair trade practices - suggests America is gearing up for a round of international bullying to which not only the Japanese will fall victim. So far it is still only a shot across Tokyo's bows. But if Japan is targeted, China, Korea, even Hong Kong, could be next on the list.
Super 301 is a blunt instrument. Washington must assure the rest of the world it will not be used indiscriminately. It must not be abused to win exclusive advantages for the US and against the interests of its competitors.
Super 301 is not necessarily either contrary to Washington's international obligations under the General Agreement on Tariffs and Trade (GATT), nor entirely contrary to its spirit. If it acted only in cases where there was clear evidence that target countries had failed to live up to specific international obligations and had already been condemned by the GATT, the US could justifiably set itself up as a kind of international economic policeman. As the world's largest trading nation, it alone has the clout to stand up to Japan or the European Union. Super 301 could provide it with the means to do so.
But, increasingly, US policy is directed not at internationally co-ordinated action but at winning new trading rights for US companies. If others are to benefit from the same rights, so be it. But that is not the purpose of US pressure - and demanding specific numerical targets for imports of US products is not the way to achieve it.
Nor is it within either the spirit or the letter of international trading rules to threaten to raise tariffs which are bound under the GATT in retaliation for practices the US has unilaterally found to be unfair.
For six years, Washington took a lead role in the Uruguay Round of GATT negotiations in an effort to open more products and sectors to international free-trade. It should not now be discarding those principles for the purely self-serving end of selling more US products at everyone else's expense.
