Churchill's `jaw-jawing' is high on US agenda this week. Briton's dictum that negotiations are better than war strikes home on trade issues as well as US-Soviet relations
Churchill's dictum that ``jaw-jaw is better than war-war'' could usefully be brought down from the attic and de-mothballed. It applies to the Reagan-Gorbachev summit, less than two months off. It applies even more precisely to the trade wars that seem to be awaiting only some fast-draw move in Congress to get started.Skip to next paragraph
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No one could ever doubt Churchill's credentials. The rotund warrior made a career of observing, reporting, planning, warning of, and masterminding warfare. But he still preferred negotiation -- jaw-jawing -- to war.
This week has started well on both the trade front and the superpower summit front.
On trade, the Reagan administration held a surprise meeting with its four main Western economic partners-rivals Sunday in New York to lower the value of the dollar on foreign exchange markets and thus begin to close the United States' yawning trade gap.
On the summit, President Reagan made it clear that, despite recent tough talk, he expected to have a fruitful meeting with Soviet Foreign Minister Eduard Shevardnadze on Friday.
After weeks of escalating protectionist talk in Congress, Mr. Reagan has spoken out more bluntly than ever against the protectionist bills on Capitol Hill. On Sunday, he sent Treasury Secretary James A. Baker III (buttressed by the formidable Fed chairman, Paul A. Volcker) to New York to try to jawbone the dollar into further decline. Mr. Baker and Mr. Volcker met with their opposite numbers from the four other leading free-market countries in an effort to reverse the growing US trade deficit. They soug ht to create a united front that would help to keep downward pressure on the dollar.
The American greenback already has fallen between 10 and 15 percent against other major currencies since last winter. Administration officials would like to ensure that it doesn't rise again. Many economists believe that a gradual further decline of 5 to 10 percentage points would take care of perhaps half of the trade deficit problem. It would do so by making American exports relatively less expensive overseas and by making foreign imports relatively more expensive in the US.
It would be helpful if the same cast of finance ministers and central bankers who met in New York -- the so-called Group of Five -- would also press their prime ministers and presidents to back a determined and broad new round of bargaining over trade barriers. This is the so-called ``level playing field'' issue that world leaders have been talking about for the past several years but have done little to remedy. Japan, the nation whose exports are most in jeopardy from European and US protectionism, has
shown a talent for leveling the field one step at a time. It has managed to keep barely ahead of decisive trade restrictions by opening its market in stages to Western exporters.
But the major capitalist nations need to make a much more comprehensive move to bargain down the subsidies, dumping, quotas, and hidden restraints that leave the trade playing field full of potholes.
The machinery is there -- the General Agreement on Tariffs and Trade. That machinery was created when trade restrictions in the immediate postwar period led to inflation and stagnant economies. The resulting GATT era became one of the greatest periods of world economic expansion in history.
The week's other jaw-jawing -- about the summit -- will start Wednesday when Soviet Foreign Minister Shevardnadze meets Secretary of State George P. Shultz in New York, where both are attending the UN General Assembly. That meeting will prepare both sides for Friday's meeting with Reagan at the White House. Mr. Shultz and Mr. Shevardnadze are understood to have gotten on well personally at their first meeting in Helsinki this summer, despite a long list of opposing views. There is no reason to believe t hat the chemistry between new Soviet foreign minister and the determined but amiable occupant of the Oval Office will not be equally as good.
For the past several months, most commentaries on summit prospects concentrated on the possibility that the superpower leaders might arrange to sign some kind of arms agreement at Geneva. When the two leaders made it clear earlier this month that they were still far apart on Reagan's proposed ``star wars'' space-based strategic defense plan, the commentary went pessimistic.
Some analysts now talk about limited results from the summit: added consulates, renewed cultural exchanges, or completion of the air-safety deal bargained out since the Soviets shot down a South Korean airliner in 1983.
It would be wasteful if disagreement on star wars led to a summit that did not at least consider two other US-Soviet issues: trade and low-key future meetings of Cabinet-level technicians on both sides.
Even if trade in strategic goods is ruled out -- as it should be -- there is bargaining room. Future grain deals are obvious. Less obvious is the possibility that hard-pressed US machine-tool manufacturers, rather than German or Japanese, might fill some of the Kremlin's vast need for retooling civilian industry. In addition, Moscow will need oil and gas equipment if it is to keep its main hard-currency-earning industry from shrinking. New wells will be increasingly remote. And with world oil prices con tinuing to decline, more production will be needed to earn dollars and deutschmarks.
That kind of trade should not look bad to the depressed petroleum service industry in the US, either.
Earl W. Foell is editor in chief of The Christian Science Monitor.