To Boost Economy, US Woos Pacific Rim
PRESIDENT Clinton hopes to hitch America's wagon to the world's economic star: the Pacific Rim.
On Nov. 19 and 20, Mr. Clinton will host Asian leaders in Seattle in an effort to stimulate trade and investment in the region, which is home to some of the world's fastest-growing economies. The meeting indicates the rising prominence of Asia in the wake of the cold war, analysts say, as attention shifts to economic growth.
``America's future is increasingly linked to Asia,'' Secretary of State Warren Christopher said recently. The Pacific focus comes at an appropriate time for several reasons, observers say:
The trade/jobs equation. The United States and big industrial nations are struggling to create jobs to replace those lost to defense downsizing and other structural changes. Exports to emerging economies such as China, Indonesia, and Thailand support American jobs in fields such as aircraft, energy, and telecommunications.
`Rock-bottom' China ties. The most populous nation on earth is becoming an economic powerhouse. Investment is pouring into China from Japan and elsewhere. Yet Sino-US relations, which unraveled when China crushed Tiananmen Square protesters in 1989, are near ``rock bottom,'' says Nicholas Lardy, a China expert at the University of Washington. ``The single most important thing to happen'' at the Seattle conference, he says, may be Clinton's one-on-one talk with Chinese President Jiang Zemin - the highest-level US contact with China in five years.
Free trade at stake. Some analysts say the high-profile US overtures to Asia might scare Europe into making concessions to clinch a worldwide free-trade accord. A pact by the 108-nation General Agreement on Tariffs and Trade is a crucial underpinning for global economic growth in the mid-1990s, economists say. With or without that broader accord, the US will push for lower trade barriers in the Pacific region, says Lawrence Krause, an Asia expert at the University of California, San Diego.
``The country needs something positive,'' he says. ``The answer is APEC.'' The Asia-Pacific Economic Cooperation, a 15-country organization founded in 1989, includes Australia, Brunei, Canada, China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Taiwan, Thailand, and the US. The group's fifth annual meeting of foreign and economic ministers on Nov. 17 and 18 will be the backdrop for Clinton's forum with leaders of member countries.
While it appears that leaders from most of these nations will come to Seattle, one prominent holdout is Malaysian Prime Minister Mahathir bin Mohamad. He has proposed an Asian trade group that excludes the US and is roiled by its environmental movement's criticism of Malaysian logging practices.
Malaysia's recalcitrance is a hint that leadership in Asia is no easy task for Clinton. In addition to the participants' agendas, challenges include:
* Clearly defining US policy in Asia. In a July speech at Japan's Waseda University, Clinton talked about a ``new Pacific community'' and called APEC ``the most promising economic forum we have'' in the region. But the administration's policy to date has emphasized bilateral efforts to open trade doors in Japan and China rather than broader initiatives.
* Improving the balance of trade. Although US exports to Asia totaled $120 billion last year and supported 2.3 million jobs at home, the US has trade deficits with several Pacific nations - most notably Japan. The gap with China could reach $23 billion this year. The US Commerce Department recently announced efforts to improve federal promotion of exports. Professor Krause notes a shortage of corporate investment in Asia. This could boost exports from parent companies to subsidiaries.
* Convincing the US public. The debate over the North American Free Trade Agreement (NAFTA) has made clear that many Americans are worried about losing jobs to low-wage developing nations. NAFTA may come to a vote in the House of Representatives on Nov. 17, during the APEC meeting. A ``no'' vote, Professor Lardy says, would signal ``a dramatic ascendancy of protectionism in the US'' and ``imply that the US can't lead APEC.''