Conferees Warn on U.S. Trade Curbs

Government and business leaders attending a weekend conference on “Transitions in the Pacific Rim” in Laguna Niguel warned that the bilateral trade dispute between the United States and Japan could have a “snowball effect” on members of the Assn. of Southeast Asian Nations (ASEAN), destabilizing their economies.

Musa bin Hitam, deputy prime minister of Malaysia, said that restrictive trade legislation pending in Congress could set off a “chain reaction” among those developing Asian nations that, unlike Japan, may not be strong enough to sustain the sudden shock of reduced U.S. import quotas and higher tariffs.

“If their economies are weak,” said Motoo Shiina, a leading member of the Japanese parliament, these other nations “will lose stability in politics.”

Richard C. Holbrooke, assistant secretary of state for East Asian and Pacific affairs in the Carter Administration, suggested that Congress “must be far more sensitive to the political consequences that could follow from some of its recent, economically driven actions.”

In a keynote address to the gathering Saturday, Holbrooke said that “East Asia’s economic success, and our awe of it, has contributed to dangerous and shortsighted pressures in Congress, as some legislators seek to deal with our perhaps justifiable complaints against Japan by taking a shotgun to the entire region.”

If that attitude prevails, he said, “our left hand will undo with discriminatory trade measures what our right hand has long sought to do with our overall economic, political and security policies in the Pacific.”

Nearly 200 participants and observers from 13 Pacific Rim nations gathered at the opulent Ritz-Carlton Hotel in Laguna Niguel, which seemed to have more uniformed staff than some Third World armies. The conference was organized by the Center for a New Democracy, a Washington think tank founded by U.S. Sen. Gary Hart, and sponsored by United Airlines, the Bank of America, UCLA, the Harvard-East Asia Institute and the Monarch Beach Institute.

The major working sessions of the conference were opened to the press on condition that speakers not be identified by name.

One Hong Kong businessman warned against “Japan-bashing,” saying that South Korea, like the ASEAN nations, could be undermined by several measures under consideration by Congress. Several participants pointed out that some of the strongest congressional proponents of protectionism were also the most ideologically anti-communist and that if protectionist-induced economic instability led to political instability, communist insurgencies would benefit.

A Japanese participant said that nations of the region would have to get accustomed to “the passing of the era of Pax Americana, “ although the United States remained “the single most dominant force, economically as well as militarily. Our American friends need time to grasp this new reality.”

Musa, who also serves as Malaysia’s minister of home affairs, was the highest-ranking government official attending the conference. Although he said his own country has trouble filling its U.S. textile quota, the two economies “are interlinked, whether we like it or not.” Two of Malaysia’s main exports are rubber and palm oil, “so every time an American buys an automobile or goes to the pastry shop, it affects us,” he said in an interview.