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carne to a boíl when the House of
Representatives overwhelming ly
passed an unprecedented, block–
uster trade bill that would re–
st rain impor ts and mandate
trade retaliation against certain
foreign competitors.
P resident Reagan charged
that the House bill "wou ld
plunge the world into a trade
war, erodi ng our relations
w it h our a llies and Free
World trading partners."
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1
.
Next, the Senate must en–
act its own trade bill, with
the two houses reaching a
compromise on their two
versions. Unless it is suffi–
.
islation s eps
thro~h
ProtectionlS' trade leg
J
apan an Western
the
U.S.
~Congress .
t with' one anot er.
'
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t cooPfra e
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EUrope now : us
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W:
TH
remarkable sud–
denness, long -sim–
mering disputes over
world trade a re boiling over.
They threaten the interre–
lated global economic system
that has led to the unp rece–
dented prosperity of t he past
four decades.
The days of the United States as
the dominant economic power in
the Free World are numbered. A
new relationship between Western
Europe and Japan is al ready being
forged to assume the world leader–
ship role.
Tokyo Summit
Earlier this year, this writer cov–
ered the annual summit conference
2
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of the Free World's leading indus–
trial powers in Tokyo, Japan .
After three days of closed door
meetings, the leaders of the United
States, J apan, West Germany,
France, Italy, Britain and Canada
emerged at their closing press con–
ference to announce that they were
generally pleased with their accom–
plishments. In the " Tokyo Eco–
nomic Declaration," which they
drafted, the leaders said th ey reaf–
firmed their "commitment to halt–
ing and reversing protectionism,
and to reducing and dismantling
trade restrictions."
The words on the paper were
hardly dry when U.S . President
Ronald Reagan arrived borne to
face mounting pressure
in
Con–
gress to enact stiff protect ionist
trade legislat ion.
;.. ciently weakened, Mr. Rea–
gan is certain to veto the
final bill.
But even so, protection–
ist legislation will not fade
away. "The best the Ad–
ministration can do at this
point," observed the June
9
Business Week,
"is to
slow the rush to protec–
tionism on Capitol Hill."
As it stands, the
House bill eliminates
sorne of the President's
discretionary author ity
in dealing with trade
complaints. Its most
controversia! provision
requires nations with
"excessive trade sur–
pluses" with the United States–
n~ely,
Japan, Taiwan and West
Germany- to reduce the surpluses
by 1O percent a year or face higher
tariffs and quotas.
The West German Economics
Ministry labeled the pending U.S.
legislation "devastating," adding
t hat it could lead to major distor–
t ions in world trade.
An official from Taiwan frankly
stated that the provision to roan–
date cutbacks in surpluses, if left
standing, could lead to a full-blown
trade war.
President Reagan's own trade
representative, Clayton Yeutter,
said the legislation flagrant ly vio–
lated international agreements.
" If
the United States becomes a
rogu e elephant," he said,
"r~pag
ing through GAT T [Gene r al
Agreement on Tariffs and Trade],
obeying the rules it wants,
st~p-
The
PLAIN TRUTH