Basic HTML Version
WOBLDWA!OB
An Overview of Major News Ev·ents and Trends
TRADEWAR
JITTERS
A surge of trade protectionism has
surfaced in recent months. High of–
ficials in the U.S. and Japan are
already warning about the possi–
bility of trade war.
In the most publicized case, the
U.S. fnternational Trade Commis–
sion, a group empowered to recom–
mend relief for domestic industries
threatened by imports, formally
proposed in early spring that Presi–
den! Carter raise tariffs on imponed
shoes by as much as 40 percent.
I n response to the Commission,
President Carter attempted to find a
compromise solution by directing
his special trade negotiator to seek
"voluntary limits" on low-cost shoe
imports from Taiwan and South
Korea. However, American labor
union officials have indicated that
votuntary agreements "do not
work" and will not satisfy their de–
mand for protection.
In another major protectionist de–
velopment, an estimated 500,000
American textile and clothing work–
ers staged a brief walkout
in
mid–
April in a coast-to-coast demonstra–
tion. They demanded tighter limits
on apparel imports which have
surged in recent years.
Protectionist sentiment, however,
isn' t limi.ted to the United States.
There has been rising concern in the
European Community over large–
scale penetration of Japanese prod–
ucts into the domestic markets for
ships, cars, steel and ball bearings.
The EC has already slapped a stiff
20 percent tariff increase on Japa–
nese ball bearings, and threatens to
enact quotas and mínimum prices
on Japanese steel.
While official government policy
in both Europe and America is to
oppose protectionism, the pressure
for trade restrictions seems likely to
4
TEXTILE AND CLOTHING
workers jam New York's Herald Square to protest
foreign clothing imports, which they charge deprive American workers of jobs.
remain. In the U.S. , union sources
claim that imports have cost over
200,000 domestic jobs in the textile
and apparel industries. and 70,000
jobs in the shoe industry. An esti–
mated 300 U.S. shoe factories have
closed in recent years.
In Europe, unemployment has
been running very high in the steel
industry. Only 60 percent of capac–
ity is being used, and many Euro–
peans blame it on rising imports of
Japanese steel.
Overall , the economies of the
free-world nations continue to be
fragile, and the temptation remains
for governments to expand domestic
em ployment, even at the risk of in- ·
creasing trade restrictions. During a
recent visit to Washington, Japanese
Prime Minister Takeo Fukuda
warned that a surge of protection–
ism could precipitate an economic
replayofthe Grea t Depression ofthe
1930s: "The world economic situ–
ation following the 1973 oil crisis
was quite similar to the devel–
opments of that particular time,"
said Mr. Fukuda, pointing out that
during the Great Depression world
trade volume dropped by 40 per–
cent. He went on to state that "there
is great danger therefore of a reviva(
of protectionism."
Elaborating on the events of the
1930s, Fukuda reminded his Ameri–
can hosts that "the major countries,
one after another, abandoned the
open economic system of free trade,
switching to the closed system of
protectionism.... I am not suggest–
ing that we are once again on the
road to world wa r. Yet 1 feel deep
anxiety about the social and politi–
cal consequences for the world if we
slide once again into protectionism,
or a breakup of the world economy
into trade blocs."
U.S.-CUBAN
DETENTE?
There are growing signs that the 16-
year-old cold war between the
United States and Cuba may be en-
The PLAIN TRUTH
June
1977