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The global marketplace

Japanese and West European leaders approach the present world economic problems in a longer-term context. In doing this, they are well aware that the US government perspective is much shorter-term.

Fundamentally, they do not share the US confidence that if government plays a lesser role, economic forces will bring about the best results in the years ahead. They perceive a decade or more of major dislocations and adjustments, and they feel that governments must guide that process to moderate the unemployment and social costs that otherwise seem inevitable.

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The American approach to any international gathering on economic issues is usually very short-term in its orientation. If there are tasks to be accomplished, these are usually derived from analysis based on recent complaints from domestic interests. The squeaking wheels get the oil.

It has been my experience over the last two decades in and around the Washington policymaking system that the international economic decisions of our government most often address yesterday's problems, based on complaints from enterprises that failed to anticipate what was foreseeable. Tomorrow's problems are almost never addressed in the making of foreign economic policy.

Therefore, based on past lessons, the government should really try to anticipate what the problems will be in the 1990s, when the new framework will prevail, rather than study what the problems were in the last couple of years.

To do this, we need to ask business, labor, agricultural groups, bankers, and others to look ahead and help define what kind of problems they foresee, and what kind of framework of rules they want to prevail, in the future.

This means pulling together the thinking of our winners as well as our losers. It means encouraging business to look beyond the next quarterly earnings report and the next few months' cash flow problems to the next five or ten years.

* The information revolution is based upon rapidly declining costs of computer memory and processing capabilities and of communications.

The US presently has about 3 percent of its workforce in agriculture, about 22 percent in industrial jobs, and the rest in services and in government. The share in industry will probably decrease significantly in the 1980s. But the job requirements in the expanding services sectors are information-based. They require a higher level of education, with greater technical versatility, than that for many of the jobs in today's factories.

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* New materials include fiber optics, which will probably totally replace copper and aluminum as communications conductors. These developments will soon place a cloud of uncertainty over the future of many of our basic industries, including producers of steel, nonferrous metals, and chemicals. They will raise doubts about the future of basic raw materials from the ground -- and therefore raise doubts about the future of those developing nations that rely on exports of primary products based on nonrenewable natural resources.

* Advances in biotechnology will not only lengthen life expectancy and improve our health. There will also be applications of genetic engineering that will challenge present chemical processes in manufacturing man-made chemicals and fibers.

* To add to these technological challenges, there will be many more sources of competition in the 1980s and 1990s. The inefficient petrochemical producers of Japan and Europe will be challenged by new producers in cheap oil and gas regions of the world, such as in Alberta, the Middle East, and Mexico. The consumer products which seem to come like a flood from Japan today will no doubt soon be followed by similar products from Mexico, Singapore, Hong Kong, Taiwan, Korea, Brazil, and other countries.

What all of this means is far-reaching change -- change in the pattern of jobs available, in the structure of industry, in the pattern of world trade, in the relative competitiveness of key sectors.

Thus, I should like to see a fundamental shift in our economic policy perspective, to recognize the existence of a global marketplace, and to recognize the awesome challenges of the next few years from technology and from new sources of competition -- challenges which can already be foreseen.

Our international negotiating efforts should be developed with this kind of forward perspective.

In my judgment, the Soviets face enormous and growing economic problems, and a widening foreign exchange gap in coming years. Whatever our East-West policies , they will have only a modest effect on the coming deterioriation in the Soviet bloc.

Consequently, it seems to me far preferable to avoid a US-European clash over policies toward the East, and instead focus on keeping the Western economic system together, strong, and growing. A strong West is essential to bargaining effectively with the East. A divided West is inevitably a weak West.

That requires thinking about international economic policy in a forward perspective. It requires consensus building among the Western nations, so that we can negotiate a better framework of cooperation in coping with the challenges ahead.

Responding to complaints about foreign practices, as we do today, is simply not a sufficient basis for making foreign economic policy.

We cannot run well by looking back. We should not make policy or negotiate on the basis of perceptions of problems of yesterday or today, but rather on the problems of tomorrow.

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