Basic HTML Version
Allies
at
the
Crossroads
"Things appear lo have
industries and union officials
recorders, Europe's hottest
gotten as bad as they were
are pressuring political
new consumer ítem.
on the eve of World War 11,"
leaders lo mute post-World
Japanese exports to the
said worried Sony
War 11 free trade policies.
European Community almos!
Corporation chairman Akio
They want to protect their
doubled between 1977 and
Morita in a newspaper
vulnerable livelihoods from
1980, widening the EC's
interview recently. He said
imports.
trade deficit with Japan.
he had not seen Americans
Most leaders, however,
With nearly 1
O
million
gel so emotional about
remember and fear the
unemployed in the European
Japan since the war .
trade wars of the 1930s.
Community, and a
Major wars tend to be
When trade barriers were
demonstrated European
preceded by accelerating
then erected they were met
liking for Japanese
economic warfare, hostility
with retaliatory barriers from
products, industry and
and rivalry. "Protectionism
trading partners. Once
government leaders are
could destroy the Atlantic
retaliation started it
infl amed.
Alliance," said Sir David
proliferated and inflamed
The Japanese, however,
Nicholson, a British
and prolonged the Great
feel they are being made the
Conservative member of the
Depression. Everyone lost.
scapegoats for the
European Parliament.
Trade war fueled the
inefficiencies of other
Few nations are
antagonisms that led to
nations' industries and
self-sufficient. Nations must
despots and World War 11.
economic and política!
be able lo trade in order lo
policies, and for recession
secure resources essential
Japanese Juggernaut
and inflation which were not
to their economic survival, to The most troublesome
of their making-which is
expand their economies and trading quandary facing
largely true.
provide employment. They
many nations today is how
Adding lo the import
must be able to sell so that
to meet the enormous
flood, many nations-even
they may keep balance of
power and efficiency of
Japan-are finding their
payments in check. Nations
Japanese production and
products undercut by·less
wanting to sell in others'
exports. The Japanese
expensive but high quality
markets must be willing to
economic miracle of the
goods from newly emerging
buy from them.
1960s and 1970s has turned industrially developing
lf trade disputes are not
into a juggernaut in the
nations like Taiwan,
peacefully resolved between
1980s.
Singapore, Hong Kong,
the main locomotives of
A flood of Japanese
South Korea, Mexico and
world trade-the United
exports-from the tiniest
Brazil.
States, Europe and
components to autos,
Unresolved Hostilitles
Japan-then more than
television sets, machine
widescale unemployment is
tools, office equipment,
In recent months the United
at stake. The very
computers and high
States has filed numerous
underpinnings of Western
technology goods-has
charges against European
order and cooperation could inundated Europe, the
nations. Japan and other
crack.
United States and other
developing nations for unfair
Prosperous trade and
nations like a tidal wave,
dumping of steel, autos and
economic relations among
raising anger and hostility.
other goods below
these nations are vital to
Imagine! In jusi a
production costs. The United
maintain the flow of aid to
comparatively few years '
States says sales below
developing nations. But now time Japanese imports have
production costs with losses
every nation is struggling to
all but wiped out the
made up by government
overcome the greatest
once-famed British
subsidies are contrary to the
period of recession, inflation
motorcycle industry. And
rules of the General
and unemployment since the Japanese electronics
Agreement on Tariffs and
Great Depression.
companies now supply
al/
Trade (GATT}. lf charges
Governments feel the need
the smaller color-television
are proven true, the United
to mount export-led
tubes used in Europe and
States says it will slap stiff
recoveries. At the same time have taken a commanding
tax penalties on future
politically influential
80 percent lo 90 percent of
imports of those
import-beleaguered
the market of videocassette
commodities from offending
June/ July 1982
nations. In response a
European steel official said,
"We are going to ask our
government to retaliate."
More and more differing
domestic economic policies
to control interna! problems
are colliding in trading
areas. European and a host
of developing nations are
irate at the United States'
policy of high interest rates
and severé budget cuts to
fight inflation. This policy
torces high interest rates to
hold investments in their own
countries and reduces
demands for their goods.
That stifles their own
economic recoveries. "How
can we defend our alliance
with the United States when
critics say American policy is
making us bankrupt?" asked
France's Finance Minister
Jacques Delors in February.
Every nation has been
angered by a host of
nontariff barriers (more than
800 different kinds) set up
by other nations to restrain
imports.
Japan is particularly under
heavy pressure to reduce its
complicated structure of
barriers. The United States
has threatened " reciprocity"
legislation with varying levels
of retaliation against nations
who fail to allow equal
access for U.S. goods in
their markets.
So far the fear of a
repetition of the trade war of
the 1930s has caused
efforts of compromise to
prevail at trade negotiating
tables. Promises of reducing
barriers and opening
markets-especially by
Japan-have cooled
tempers somewhat. But
danger still exists.
World economists warn
that the heady days of rapid
post-World War 11 economic
expansion are slowing
down. They predict that
trade competition in the rest
of the decade is going to
become fiercer than
ever.
25