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If New England were a nation, this is what it would do

If Boston were the capital of an independent nation called New England, what would its foreign policy be? That's a topic I've been discussing with businessmen, academicians, and government officials in New England and Canada recently.Not that there's much danger of independence: There's no real secessionist movement in New England, no prospect of a new Belize in America's Northeast.

But if the question is speculative, it is by no means irrelevant. For American foreign policy is floundering -- viewed here and abroad more as a series of reactions to events than as a set of responses keyed to a grand design. And New England, of all America's regions, has perhaps the greatest stake in the nation's foreign policy.

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Why? The reasons reside in New England's history, her intellectual traditions, her resources, and her current trading patterns. Consider the following:

* New England has centuries of international experience. Originally dependent on British goods, later enriched by a brisk China trade, if has long been accustomed to foreign markets. Theodore Eliot, dean of the Fletcher School of Law and Diplomacy at Tufts University, notes that the region's profound concern for such issues goes back at least to the War of 1812, "when New England did have a separate foreign policy and almost seceded." Even now, he adds, "it's still an ocean-oriented and Europe-oriented part of the country."

* Perhaps due to its concentration of first-rate academic institutions, New England retains liberal traditions in a conservative time. So it may worry more about the moral dilemmas of American foreign policy -- whether we support human rights or dictators, whether we send arms or food abroad -- than do other regions. Richard Robinson, professor of international management at MIT's Sloan School of Management, notes that New Englanders tend to be more "tolerant of different values, more willing to consider different responses," than some of their Middle Western compatriots. Here, even states get involved in foreign affairs: Massachusetts has passed measures condemning the British role in Northern Ireland, the governor of Connecticut has vetoed a bill requiring the state to divest stock in South African companies, and Maine has its own "diplomat" for Canadian relations.

* Unlike most other regions of the nation, New England has few exportable resources. It depends on oil for 80 percent of its energy -- and imports 75 percent of the oil it uses. Agriculture, while important locally, contributes little to the region's income. Even the former pillars of the economy -- the nearly defunct textile and shoe industries -- brought in wool and leather from outside the region. Fishing, while significant along the coast, cannot even supply the American market, which buys 50 percent of the fish it consumes from abroad. So New England largely exports capital goods -- adding the skill of a well-established labor pool and the engineering that flows from the academic institutions to raw materials from elsewhere. Leading the overseas trade market are the high value, easily shipped products of the "high tech" electronic industries. Other products include aircraft engines, machine tools, electrical equipment, instruments, metals, paper products, even costume jewelry. Also going abroad: the region's rich mix of architects, bankers, lawyers, and consultants selling international services.

* These three elements, intertwined, help account for the trade figures. The region's exports of manufactured goods for 1980 totaled $10 billion -- which, though New England has only 5.5 percent of the nation's population, represented 6.6 percent of American exports. That's not surprising, given the lack of competition. As John Deegan of the Massachusetts-based Dexim Inc. says, "Americans are not export-minded: The market is so big that they get into it either as an after-thought or by accident." Yankees, however, do better than most. In 1980, exports as a percentage of sales for New England companies were twice the national average of 5 percent.

The gap may widen further: While US exports grew from 14 percent in 1970 to 20 percent in 1980, exports from New England have doubled. At present, 85 percent of the nation's exports come from only 250 of the largest corporations. But Massport's manager of foreign trade, Kathleen Hagan, notes that if only one percent of New England's 20,000 small business had exports of only $500,000 a year, the region's export trade would rise by $1 billion.

That's what New England is. But what does it think? Here are some concerns: Defense

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The Reagan administration's policy toward the Soviet Union -- building guns first and talking later -- might seem, on first glance, to be good for New England. The region includes major shipyards in Connecticut, Massachusetts, and Maine, and gets more than twice its per capital share of defense contracts. But economic prognosticators at the First National Bank of Boston foresee a serious shortage of labor if, as expected, $62 billion in defense spending comes here by 1986. That will create more than 150,000 new defense jobs. The problem: The established high-tech industries, already strapped for talent and combing the country for engineers, risk being drained of professionals. Again, too, the moral dilemma arises: Businessmen, even in defense-related industries, regularly observe that an arms race is good for no one. Oil.

On the Middle East, does New England tilt toward the oil-rich Arabs rather than the traditionally allied Israelis? Not yet, for although the six-state Jewish population is less than a third of that in New York City alone, sentiment still runs toward Israel. But attitudes may be shifting. Although they would not be quoted, a number of New Englanders I talked with worried that US "favoritism" toward Israel could provoke Saudis to shut off their taps in a huff. Third world.

Should America, following the urgings of its European allies, funnel more assistance toward less developed countries? New Englanders are uncertain. On one hand, they favor black Africa (with which the region's universities have many ties) rather than South Africa, and they seek to work with noncommunist Southeast Asia and Latin America. On the other hand, however, these developing nations sometimes have more use for bulldozers from Illinois or grain from Kansas the computers from Route 128. China.

Many exporters are agog over the possibilities. Others say the People's Republic has been oversold. Massachusetts, however, is forging a "sister province" relationship with Canton, and businessmen in increasing numbers are taking exploratory trips to Peking. Europe.

Still the region's major trading partner, it comes under criticism for using the European Community regulations to squeeze out such items as Maine chickens. Canada.

New England, doing a brisk two-way trade to the north, obviously benefits from friendly relations. But fishermen here recently pressured a halt to a bilateral fisheries treaty the Canadians wanted. Other unresolved issues concern lumber, railroads, and acid rain. And, of course, energy: New England industrialists long to purchase Canadian hydroelectric power.

Through all the discussions one point emerges: Yankee traders are upset by the federal government's lack of what Connecticut's economic development commissioner, Edward Stockton, calls "a cohesive, hard-hitting exporting policy." Says Robert Dale, president of Dennison International, "Our government makes it very difficult for a company to go out and really do a job on export business." Leslie Peterson of the Massachusetts Foreign Business Council agrees. Citing a lack of information for would-be exporters, the red tape involved in overseas trade, and the assistance lavished on overseas competitors by their own governments, she notes rather ruefully that "if I were a businessman here, I'd probably stop thinking about exporting." Yet as one international banker observes, New England foreign policy would essentially be "export or die." Behind that attitude lies a serious eroding of that old isolationism, articulated by George Washington and noticed by de Tocqueville, on which America was founded. For New England is shifting. No longer the bastion of protectionism it was as recently as 20 years ago, it now comes down fairly solidly on the side of free trade.

And in favor of stability. Asked what would most benefit New England, economist Lynn Browne of the Federal Reserve Bank of Boston replied simply, "A prosperous world." An occasional feature

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