Turning Away from Europe

EDWARD ALDEN

November 01, 1992|By EDWARD ALDEN

The breakdown of talks between the United States and the European Community may have ended the last hope for completing the six-year-old Uruguay Round world trade negotiations -- the first failed round in the 45-year history of the trade talks. The breakdown could trigger a trade war between the United States and the EC.

While another attempt will certainly be made to revive the trade talks, the negotiations are threatened by a growing conviction among political and economic leaders that this country's future no longer lies in strengthening the old ties with Europe, but in forging new ones with Asia and Latin America.

Indeed, the breakdown marks the first time in the history of world trade negotiations that the United States has refused to capitulate to European economic demands as the price for maintaining close military and political ties across the Atlantic. With the end of the Cold War, American political leaders no longer feel the same pressure to sacrifice economic goals for geopolitical priorities.

American leaders also believe that, in the post-Cold War world, new options exist besides succumbing to European demands. President Bush's election-year economic initiative, announced in a Sept. 10 speech in Detroit, envisions the creation of a network of "strategic trade alliances," free trade pacts linking the United States with Latin America, Asia and Eastern Europe. The speech called for the United States to create what Mr. Bush termed an economic version of the Cold War containment policy.

Who is to be "contained" by such a policy? The primary target is Europe, where the EC refusal to play by U.S.-supported trade rules will be outflanked by the new free trade agreements.

A second target is Japan. One Commerce Department official stated recently that five countries in the Pacific -- Taiwan, Hong -- Kong, Australia, New Zealand and Singapore -- as well as Chile in South America, represent a "first tier" of possible free trade partners. Japan, which also structures its economy in a way hostile to American concepts of free trade, was excluded.

While Democratic presidential candidate Bill Clinton has not embraced this vision, and has been wary of the North American Free Trade Agreement (NAFTA) recently concluded among the United States, Mexico and Canada, he will face strong pressure if elected to follow the path laid out by Mr. Bush in his Sept. 10 speech.

Powerful U.S. business interests, which have grudgingly supported the completion of the Uruguay Round, are, in contrast, elated over the NAFTA. The reason is clear: while a GATT agreement represents a compromise among 108 nations, some of them with substantial political power and goals quite different from the United States, American business got almost everything it was seeking in the NAFTA.

It is much easier for the United States to wring concessions from a weak neighbor like Mexico than from strong trading partners like Europe or Japan. The prospect of the United States concluding a series of NAFTA-style agreements with smaller countries in Latin America and the Pacific (few besides the president think Poland or Czechoslovakia are obvious partners) opens the door for U.S. business to expand abroad on terms it will largely be able to dictate.

If the turn away from Europe is backed by powerful interests, it is also propelled by ideology. Many Americans have long felt that the Old World represents decline and decadence, and the intractable dispute over agriculture has only reinforced this perception. Why should U.S. trade be held hostage to the inability of French farmers to survive without government handouts? Many believe it is better for the United States, which is also threatened by the specter of decline, to hitch its fortunes to the dynamic economies of the Pacific Rim.

At the turn of the century, the United States similarly believed its future prosperity would come from economic expansion in the Pacific. But America's neglect of Europe allowed a then-hostile power, Germany, to threaten domination of the continent, forcing the United States to intervene twice in European wars. And the rivalry with Japan for economic control of Asia eventually produced war in the Pacific as well.

Faced with this growing pressure in the United States to turn away from Europe and forge new trade ties with Latin America and Asia, a new administration must decide whether these lessons of the past can be safely ignored and whether the failure of the trade talks means it is time for the United States to leave Europe behind.

Edward Alden is a former Canadian journalist and co-author of "Neo-Nationalist Fallacies," published in the Summer 1992 issue of Foreign Policy. He wrote this commentary for Pacific News Service.

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