Rival Economic Superpowers

July 14, 1993

Remember Reykjavik? Remember that frantic Reagan-Gorbachev summit when the two leaders of the military superpowers almost came to agreement to ban nuclear weapons totally? Remember how a summit originally touted as a big success was derided before the week was out? And remember, especially, how the spirit of accommodation at Reykjavik survived early obstacles to usher in the era of sweeping reductions in nuclear arsenals?

Is it pushing things too much to ask if similar parallels can be drawn for the surprise trade agreement drafted in Tokyo last weekend by President Clinton and Japanese Prime Minister Kiichi Miyazawa? Consider these factors: (1) The insistence of the two leaders to seal an accord distrusted by some key subordinates; (2) The political hype of big things happening only to be followed by a wide wondering what the fuss was all about; (3) The very real probability that the United States and Japan, the two economic superpowers of the post Cold War world, may be forced to agreements by changing circumstance and mutual self-interest.

The personal drama in the efforts of a lame-duck Japanese prime minister and a new, untested American president should not obscure what they accomplished and what they did not. Much hinged on the matter of setting goals for reducing the $50 billion Japanese surplus in trade with the United States and opening Japan's markets to American goods. Mr. Miyazawa held firm in refusing to set numerical targets, a process he said could lead to "managed trade." Mr. Clinton, however, got his counterpart to pledge a "highly significant decrease" in his current account surplus and to negotiate "sets of objective criteria" for measuring progress on a host of trade issues.

President Clinton hadn't even reached the U.S. mainland before the American and Japanese bureaucrats were back to squabbling. Mickey Kantor, the U.S. special trade representative, said what was accepted in Tokyo was "not an agreement in and of itself" but just a rule book or set of principles for latter discussion. Japan's deputy finance minister, Jiro Saito, said the Tokyo pact "doesn't have clear meaning." As FTC U.S. officials vowed to enforce punitive U.S. trade laws against Japanese violations, back from Tokyo came the warning that if they did all bets were off.

Despite this sparring, the Tokyo summit committed Mr. Clinton more deeply to trade liberalization and saw a Japanese prime minister stand up to the stand-patters around him. Much depends on the results of next Sunday's Japanese elections and world trade reform negotiations under the General Agreement on Tariffs and Trade.

Just as the Reykjavik spirit for easing nuclear rivalry outlasted its early disappointments, so the Clinton-Miyazawa search for top-level trade agreements may ease the frictions now so evident between the two economic superpowers.

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