Trade Sanctions Are Bad for America's Reputation
International Herald Tribune
March 8, 1994
William Clark Jr.    

It is not just Japan that is involved in the trade dispute with the United States. Asia, Europe and the rest of the world are watching. For if the United States is prepared to enter into a trade war with Japan, as it increasingly appears to be, can any other country feel immune to such treatment if it incurs Washington's displeasure?

Many Asians will see the recent American step toward trade sanctions under the Super 301 law as confirming their view that the United States is in it only for its own profit. After all, Super 301 requires that Washington list all countries which it considers to be trade offenders. One likely result: Mahathir bin Mohamad, the Malaysian prime minister, will see new life pumped into his proposal for an East Asian Economic Caucus, a grouping that pointedly excludes the United States, Canada, Australia and New Zealand.

The suggestion by Mickey Kantor, the U.S. trade representative, that the United States and the European Union make a joint case against Japan will reinforce the view in Asia that when the chips are down, the United States puts Europe first.

But in Europe there is puzzlement over all this fuss. In recent discussions with European industrial leaders, I was often asked whether the United States was not overreacting to Japan's trade imbalance (now $60 billion in Japan's favor). Mr. Kantor will find it difficult to bring the Europeans along as support troops in his attack on Japan. More likely, the Europeans, hoping to pick up additional profit at the end of the day, will sit back and watch the United States stub its toe in Asia.

There are sharp lessons to be drawn from the "showdown summit" in Washington between President Bill Clinton and Prime Minister Morihiro Hosokawa, which preceded the revival of Super 301. The first is that if the leaders of nations become trade negotiators, they must be prepared to suffer disappointments common to that role, including the inability to reach an agreement.

Unfortunately, insight often arrives after the fact. The Clinton administration came to office determined to correct the trade imbalance with Japan, which badly needs fixing. The solution selected by the president's advisers was to set numerical targets for U.S. trade penetration of the Japanese market, increase the pressure on Tokyo by the threat of trade sanctions, and raise the level of negotiation to the top, making failure more costly.

Overlooked was the fact that if agreements failed to materialize, it would be the president and the prime minister who had failed.

In its haste to solve one problem, the Clinton administration overlooked the larger implications. The recession in Japan, now in its third year, and the constant harping of American policymakers have taken their toll on the tolerance of the Japanese public. Mr. Hosokawa is seen as doing a good job in confronting Japan's political and economic problems, against heavy odds. The Japanese resent America's continued pressure on him at a time when he is moving his domestic policy forward - particularly as the reforms he is championing are seen as aiding the very market liberalization that Washington says it seeks.

In reviving Super 301, the United States hopes that the Japanese will crack under pressure. The Clinton administration needs to look around. The world does not share Washington's overheated concern about the Japanese trade surplus.

Nor should the United States think that it can intimidate other countries with threats of sanctions. Unilaterally decreed benchmarks for trade with Japan, and sanctions if they are not met, will only make matters worse. Super 301 is likely to damage American trade prospects throughout Asia.

Mr. Hosokawa may have the best short-term solution for this conflict - to cool it for a time. The United States and Japan should step back and see if they cannot resolve this urgent trade problem in a way that does not fundamentally alter a key bilateral relationship or seriously weaken America in the eyes of Asia and the rest of the world.

The writer, a former U.S. assistant secretary of state for East Asian and Pacific affairs, holds the Japan chair

at the Center for Strategic and Inter national Studies, in Washington. He contributed this comment to the International Herald Tribune.

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