A Step in the Trade Direction

On the eve of crucial negotiations on the new General Agreement on Tariffs and Trade, a group of prominent Americans has issued a constructive call for assertive, export-oriented leadership by American business, labor and government. It is timely, challenging advice.

The statement, “The American Challenge in World Trade,” is the work of the trade-policy study group at the Center for Strategic and International Studies in Washington, led by Sen. Bill Bradley (D-N.J.) and Bill Brock, former U.S. trade representative and secretary of labor under President Reagan. The steering group includes 13 business leaders and three labor union officials.

These experts underscored the critical importance of prompt agreement in the new GATT round but they place that priority in the context of developing a coherent national trade policy.

“The United States faces its most critical trade crisis in over 50 years without a clearly articulated and nationally supported trade strategy,” they concluded. The remedy lies in making profound changes beginning “with a reordering of national economic goals to ensure international competitiveness.” Business and labor leaders must be persuaded “that our economic future depends on our ability to compete in export markets.” Taxes, regulations and financial policies must be drawn to “enhance our ability to compete in foreign markets.” And, as has been said so often, the federal deficit must be reduced even as increased national savings are encouraged.

Education, worker training and retraining are the “highest priority” at a time when the United States is “not producing the scientists, engineers, and managers we need to compete in technology-driven world markets.”

The statement places particular emphasis on the importance of the new GATT round and the decisive negotiations commencing Wednesday in Geneva to try to repair the breach that occurred in Montreal last December. Successful conclusion of the new GATT round is essential, the report argues. “A breakdown or prolonged extension could mean irretrievable loss of credibility for the multilateral structure and a world of inward-directed regional trade blocs.”

The report strongly supports some of the goals for the GATT round initiated by President Reagan and reaffirmed by President Bush, such as the liberalization of agricultural trade, including “a very substantial reduction, if not elimination, of trade-distorting farm support mechanisms, export subsidies and import restrictions.” But successful U.S. trade policy needs to operate on three convergent tracks, that is, on regional and bilateral trade policies as well as multilateral programs.

The report concludes with two challenges. The first requirement for business, labor and government is to recognize that “a productive trade policy, however constructed, must be based on an export-oriented national economic policy and an export-motivated private sector.” The second is that there is no alternative to strong American leadership even though some of the advantages of the United States have been diminished to the point that the nation needs to “exercise leadership more through consultation than exhortation, more through joint than unilateral action and more in accord with U.S. commercial interests as well as our political goals and values.”