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Tough Talk On Trade


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TOUGH TALK ON TRADE

Call it the new Doctrine of Comparable Action or call it the old notion of reciprocity, but no matter what the name, it translates into a tougher trade policy for the Clinton Administration (page 30). If this doctrine means using a little American muscle to open up restricted markets overseas for U.S. exports, we're all for it. But if DCA comes to stand for "Don't Come to America" for foreign goods and services, it's plain old protectionism, and it stinks.

In his Feb. 26 address on trade at American University, President Clinton made clear that his Administration's foreign policy focus was aimed at boosting the international economy, and the way to do that was to open up global markets. The President said he preferred negotiations, but if that didn't work, he warned, the U.S. would resort to retaliation against unfair trade practices. In cases where trading partners refused to stop such practices, he said, the U.S. would respond in kind. Talk of retaliation, of course, makes the Japanese and Europeans extremely nervous. Yet, given the recent drift of world trade into regional blocs and toward the proliferation of new barriers, Clinton may have little choice. To give muscle to the Administration's drive to open up foreign markets, Congress should send Clinton a new Super 301 bill, which would require the White House to retaliate against unfair trading partners who don't mend their ways. Tokyo will bristle, but for all the controversy that surrounded the lapsed law (co-sponsored by Treasury Secretary Lloyd M. Bentsen when he was Senate Finance Committee chairman), it scored modest successes in its brief tenure from 1989 to 1990, opening markets in Korea, Taiwan, and Brazil. In addition, Carla A. Hills, President Bush's able Trade Representative, was never so successful as when she set firm deadlines for retaliation against the Japanese for their closed markets in satellites and wood products. The Japanese quickly compromised.

The fear is that a Doctrine of Comparable Action might lead to the unwise doling out of subsidies in the U.S. to protect local industries or to tariffs on imports. The noisy level of angst over Boeing Co. by the Clinton Administration is worrisome. Even some Boeing and McDonnell Douglas Corp. officials are privately nervous they may lose more than they gain from an overly aggressive Washington stance on European subsidies to Airbus Industrie.

Having offered a credible deficit-reduction plan that also stresses retraining and public investment at home, Clinton can now press U.S. trading partners harder to meet their own responsibilities. But with the carrot comes the stick. Using it to open up overseas markets while not triggering a trade war will be one of President Clinton's great challenges.


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