Trying to stem the tide of protectionism in world trade
Washington — Trade ministers of nearly 90 nations will gather in Geneva Nov. 24-26 in a major effort to chart more liberal trading patterns for the 1980s.
The meeting comes at a time of growing protectionist pressures in the United States and elsewhere.
Heading the US delegation to the General Agreement on Tariffs and Trade (GATT) conference will be US Trade Representative William E. Brock, interviewed here by the Monitor.
Among major points stressed by Mr. Brock:
* Foreign trade has grown so rapidly that it plays a key role in the economies of most nations, including the US.
* A wave of protectionism - or the attempt by governments to shelter domestic industries from foreign competition - would be disastrous for the world.
* High-technology trade holds out exciting promise for the global economy - if conducted on open and equal terms.
* Trade in services can create ''uncounted millions'' of world jobs over the next few decades.
Excerpts from the interview follow:
Because of high unemployment throughout the world, protectionist pressures are rising. How, at a time when so many people are out of work - not only in the US but throughout the world - do national governments withstand demands for protection from industries that may be going under?
This is a fundamental question and it is so important to answer it effectively. In the late 1920s politicians faced the very same economic circumstances. The situation in 1929-1930 was pretty close to where the world is right now in terms of recession. Politicians said: ''Well, let's protect our peoples' jobs. We know we shouldn't do it for the long period of time, but let's do it for the short period.''
The United States was part of the problem. We adopted the Smoot-Hawley Tariff , the highest tariffs in our history. Other countries did the same. The result was the collapse of the world economy. Not just trade, but all economic activity collapsed. We had 10 years of horrible depression.
If our problem is unemployment, how do you solve it? By putting more people back to work. How do you do that? By selling more goods. Trade internationally is so big now that it can really make a difference. The world trading system now does $4 trillion worth of business yearly. That is an incredible amount of business and we're just touching the tip of the iceberg. We can do so much more.
So what we're trying to say to the world is: ''Let's look outward, let's look up and see what the opportunity is, if we open up the trading system.'' All of us have some form of protectionism. The question is - do we have the political will not to make it worse, but rather to go in the opposite direction and open up our system.
Can you assure the world that the Reagan administration will make the same arguments you have just made to troubled American industries, such as automobiles and steel? What you have said cuts both ways.
It does and yes, I can. We will protect American industry against unfair competition. We have international rules and we have to abide by them. So do our trading partners. But every bone of this administration is committed to the expansion of trade - not to protection that would trigger trade wars and create the collapse of trade.
Another area that truly is an issue for the 1980s is high-technology trade. Some of the most advanced industrial powers - the US, Japan, West Germany, Sweden, and others - will depend more and more on exports of high technology. How do we build an orderly framework for such trade?
The exciting thing is the benefits all this is going to bring to the poor countries of the world. Right now, American firms are using (South) Koreans in Korea to encode programs for computers, because it is more efficient to do it in Korea than it is in the United States. We have the cheapest computer in the world, produced with component parts from, I think, seven countries - Malaysia, El Salvador, Spain, Japan, the United States, and others. All these seven countries provide a piece of that small computer. It is very efficient.
What I'm saying is: We can create a much more interrelated and productive world; we can create millions and millions of jobs in countries that today don't have those jobs available. They will be better-paying, cleaner, and safer jobs, and they will bring this world closer together.
But the world today is not looking at that as an opportunity. More and more barriers are being put up that will stop that growth. So the United States has said: ''Let's look at where our common interest is - rich, poor, small, and big - and evolve a program that will allow that trade to expand and create those jobs.
Within that kind of framework, isn't there another high-technology problem that has to be handled - direct bilateral competition between, for example, the US and Japan?
With countries that are competitive with us - and Japan certainly is - we expect them to adopt the same rules as we do. We have said: ''If you want to do business with the United States, it should be on an equivalent basis. We should have the same opportunity to compete in your markets as you do in ours.''
We don't make that request of smaller, poorer countries. We know they have to have time to grow and to become competitive. But Japan, Europe, the US, and Canada - these countries are competitive and should all work by the same rules.
GATT has dealt extensively with problems of trade in goods, but has not done much to regulate trade in services. What would the US like to see accomplished in this field?
We want GATT to recognize that trade benefits everybody if it grows and that it doesn't really matter if trade is in something you can touch, like goods, or whether it is in services. It still is the exchange of something that benefits both sides. The fact that there are no rules in the services area is dangerous for world trade.
If you're going to sell me a shirt, say, from Peru to the United States, you're going to have to ship it. That's a service. You're going to have to finance it. That's a service. You have to have accounting, legal services, and data transmission.
How we think we can expand trade in goods, and at the same time erect higher barriers in services, doesn't make sense. One of the fascinations of the services area is that it forces the GATT to look at the future, because that is where the growth is going to be. The millions of jobs that are going to be created in this world in the next 20 or 30 years - most of them are going to be in the services area.
If countries don't have the political will to get these barriers down so that we can have more trade, the jobs won't be created. The countries that are poor now are going to stay poor. That doesn't make sense for any of us.