Taking off the blinkers
JUST two sentences of President Clinton's State of The Union address were devoted to international commerce. In a speech notable for its intense, almost exclusive focus on domestic issues, Mr Clinton referred only to ''a national economic strategy to expand trade, including the successful completion of the latest round of world trade talks and the successful completion of a North American Free Trade Agreement''.
That promise was welcome as far as it went, because early remarks from officials in the new administration had indicated no enthusiasm for an early settlement of the Uruguay Round of the General Agreement on Tariff and Trade, which is seen as so vital inrestoring confidence in global economic recovery.
Mr Clinton's comment was hedged about with a commitment to open up markets for American products overseas, an insistence on ''fair'' trade, and a promise to support key industries as ''all our competitors are doing''. That hint of competitive subsidy andimport protection will put the international community on the alert.
In particular, Beijing and Tokyo will take note of the implied warning that their rapidly expanding trade surpluses with the United States will become a bone of contention in the coming year. This week's figures from Washington show that the Sino-US imbalance has grown to US$18.08 billion, a record which is bound to inflame protectionist sentiment in America, and lead to calls for the impositions of conditions on China's Most Favoured Nation status.
China will dispute the trend, arguing that re-exported goods from Hongkong and Taiwan should not be counted, but that will not pacify Mr Clinton's new and inexperienced Trade Representative, Mr Mickey Kantor. He called the expansion of trade a ''win-wingame'', in which countries with liberalised trade would grow faster than those with closed borders, but he also stressed that US trade laws would be rigorously enforced. China and Japan would be pressed to live up to their market-opening commitments.
China, which made a last-minute deal with the US last year to avoid incurring sanctions, will be under close scrutiny to check if it is keeping its word. Beijing cannot expect to take advantage of others' liberal trade laws, if it is slow to open its own markets to the outside.
However, the United States must also commit itself solidly to free trade. Protectionism, in the end, is a lose-lose game from which the world's economic players will take a long time to recover.
