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But as J apan changed course 180
deg rees by common consensus 32
years ago , it could, because
of its unique homogeneity, change
almost overnight agai n should the
structure of world trade, its chosen
path to world-power status.
collapse.
To push Japan too far. too fast
cou ld, in the words of Minister for
Externa! Economic Affairs Nobu–
hiko Ushiba, "be fatal to the rul e of
the [business-supported) pro-Ameri–
can, free trade Liberal Democratic
Party."
Europe in Trouble Also
The Organization for Economic Co–
operation and Oevelopment has just
iss ued a sobering analysis of the free
world's economic problcms. l ts 24
member countries make up just
about the whole of thc non-Com–
munist industrial world.
According to the OECD. the big–
gcs t trouble spot is not Japan, not
thc U.S., but Europe. In Europe's
four largest economics-those of
Wcst Germany, France, Britain and
ltaly- growth averaged only two
percent last year, exactly half the
tigu re of 1976.
Prospects for 1978 are not encour–
aging. The OECD sees growth of
pcrhaps as little as 2.5 percent for
Wcstern Europe. Hclping dampen
cconomic prospects are threats by
thc huge Communist parties of ltaly
and France to nationalize major
scgments of those nation's econo–
mies if they gain incrcased political
leverage.
The slowdown in world trade is a
far more serious situation for the
countries of Westcrn Europe than
for the United $tates. Both France
and West Germany count about 25
pcrcent of their gross national prod–
ucts in externa! dcalings. For a
smaller country, such as the Nether–
lands, foreign trade may account for
more than half of all economic ac–
tivity.
Any step or hint of a step by the
U.S. to guard its own industries–
evcn though thc Europeans are re–
sort ing to restrictivc measures of
their own in dealing with their " Jap–
ancse problem"- stirs críes from Eu–
ropcans who fear that American
restraints will become the pretext
for nations around the world to
The
PLAIN TRUTH April 1978
erect similar trade barriers against
European exports.
Europeans, and especially the
West Germans. are deeply worried
about the sinking value of the U.S.
dollar. Until Presiden! Carter took
sorne remedia! steps in January to
UPI
halt the dollar's skid. German bank–
ers were charging that the Carter
Administration had switched from
"benign neglect" of the dollar to
·'malign neglect.'' Before Washing–
ton decided Lo act, the Europeans
had laid out the equivalen! of $30
billion in a largely vain attempt to
halt the dollar's slide. By contrast,
the U.S. itself had spent less than
$500 million.
The Europeans charged the U.S.
purposely failed lo intervene in the
knowledge that a cheaper dollar
mcans the possibility of incrcased
American exports to the continent.
But it has its dangerous side effcct
as weJL As the
Wal/
S1ree1
Jouma /
of December 19, 1977 reportcd
from Bonn: "The dollar has a strong
psychological as well as strictly eco–
nomic impact on Europeans. A
slumping dollar stirs doubt about
the Carter Administration's com–
mitment to Western Europe and
about America's ability to help the
economies of the non-Communist
world."
Earlier Warnlngs
So what is the situation now? For
the moment it seems that the U.S.
and Japan might temporarily keep
from going for each other's cco–
nomic jugular over protectionism.
Nevertheless. in the absence of an
cffective energy policy, the United
States continucs to gu lp vast
amounts of foreign oil. The world's
economy shows
little
sign of growth
for the immediate future. And
everywhere, nations are worried
about the politically disruptive ef–
fects of growing unemployment.
Pressure is increasing everywhere to
save jobs by walling off domestic
markets.
WiUy Brandt. West German So–
cialist leader and former chancellor.
recently warned that unless the de–
veloped countries give up their
trade protectionist policies. the
world may be plunged into a dc–
pression as severe as the one in the
1930s.
Mr. Brandt said:
·•Jt
is deplorable.
The poison of protectionism is espe–
cially gaining ground in the Unitcd
States, including parts of the tradc–
union movement. 1 can see similar
signs in other parts of Europe."
This should come as no surprise
10
longtime
Plain Trwh
readers:
Since the early 1950s. the editors of
this magazine have warned that a
devastating tradc war would erupt
among the free-world economics:
that, as a result of the brcakdown of
international commerce and the real
possibility of a worldwide economic
depression. the very fabric of the
post-World War 11 alliance structurc
would be ripped apart.
We have warned of the likelihood
of both a remilitarized Japan and a
powerful Unitcd Europe, und er
German domination. that would ul–
timately stand apart
from- and in
opposilion
to- the United States.
The stage is being set for thcse
occurrences right now!
O
11