President Seeks To Get Tougher On Trade Issues

But international partners say that punitive measures undermine prospects for free trade

IF President Clinton is having trouble winning support for proposed social and economic change at home, he is finding it equally difficult to force such change on America's major trading partners abroad.

During his first 100 days as chief executive, Mr. Clinton moved quickly against unfair Asian, European, and Canadian traders by slapping them with sanctions. He talks of even more punitive measures ahead.

But bogged down by their own economic problems, other industrialized nations are less inclined to give in to Washington's demands that they open their markets and purchase more United States goods and services.

A senior White House official says Clinton has embarked on a results-oriented trade policy, because "accepting the status quo is dangerous." Clinton, he says, knows that the nation's ability to compete overseas is hampered by home-grown problems, such as a low level of investment and a work force in need of costly retraining. But much of America's $86 billion-plus trade deficit stems from unfair market conditions, the official says.

Clinton admonished Japanese Prime Minister Kiichi Miyazawa during his mid-April visit here to help correct his country's increasing trade surplus. But Japanese trade officials balked at US targets for Japanese purchases of US exports as "managed trade."

European Community trade negotiator Sir Leon Brittan accuses the Clinton administration of "bullying." In Washington last week on the heels of Mr. Miyazawa's visit, Sir Leon cautioned the last superpower that "keeping an army of unilateral trade instruments with an extra-territorial reach ... risks leading us into dangerous positions."

Many US lawmakers, including Sen. Max Baucus (D) of Montana, chairman of the Senate Finance international trade subcommittee, are anxious to wield those instruments. Mr. Baucus is cheered by a new US trade policy that, he says, is responding to "a whole different post-cold-war era," in which nations are focused on their own domestic economic needs.

"The administration is not ideological, free trade, or protectionist. It will tend to stand up for US rights far more than previous administrations," Baucus says. For example, he points to the recent Clinton-Miyazawa meeting. "Clinton didn't sugar coat the [$49 billion] US trade deficit with Japan or mouth foreign policy niceties. He did stress our differences."

Baucus says he has White House support for legislative measures that punish recalcitrant trade partners for continued abuses. He blasts critics: "Our American trade opening laws are not protectionist, not market closing. If we wanted to be protectionist we could enact tariffs and put up other barriers."

But a former Bush administration official who now brokers export deals for US manufacturers says "everything we can do as a `remedy' makes things worse," because "sanctions represent a reduction in trade freeness." He accuses US Trade Representative Mickey Kantor of having a "a trial lawyer's combative attitude" and says that tougher trade measures will not further US interests.

US trading partners agree. "Does Mr. Baucus really think that in a world competing for international markets that people will just sit back and submit to such muscle trade diplomacy?" snaps European parliamentarian James Elles. "Others will start arming themselves with the same weaponry."

Mr. Elles is anxious to see "how far an administration that is committed to free trade will go with such potentially protectionist instruments."

Some trade watchers fault the administration for not forging ahead with a long-term trade strategy. Instead, they say, actions so far suggest that policy is engineered for the short-term.

"Will the measures we've taken in the last three months make things easier for us or close off our options?" asks Alan Tonelson, director of research at the Washington-based Economic Strategy Institute. "In this world of consolidating trade blocs, does the US want to antagonize Europe? How Asia-centric do we want Japan to be and how do we divert it or capitalize on it? I don't see people in the administration asking questions like these."

In competitiveness terms, Mr. Tonelson says, "our own trading region is the worst."

He adds: "Latin America is full of high-consumption, high-debt, low-wage countries that don't measure up to their Asian or European counterparts and our investment capacity to bring them up to speed is nowhere near sufficient."

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