Protectionism Trade

The world trade organization accused the United States on Thursday of using protectionist measures to curb cheap imports. The United States also faced a barrage of criticism from individual members of the 103-nation General Agreement on Tariffs and Trade during a two-day review of Washington's trade practices. U.S. Ambassador Rufus H. Yerxa said the review, based on a new GATT study, helped clear the air. "We're willing to take our lumps. We can dish it out, but we can take it."

Fearing a deepening downturn, China's government is using its muscle to prop up the nation's economy. It's encouraging banks to lend. It's investing billions in infrastructure. It's stockpiling key raw materials. And it's placing restrictions on purchases of foreign goods. Those measures have helped keep China growing faster than any other major country. Its economy is projected to expand by 7.2% this year, according to a recent World Bank estimate.

As front-page newspaper reports here Friday warned that Washington will soon insist that Japan take Draconian measures to cut its trade surplus, this country released a new study of its own, saying that undue U.S. emphasis on trade balances could usher in a new era of protectionism.

The Bush administration Monday criticized China's record on opening its markets and said the U.S. would not hesitate to seek economic sanctions if that record did not improve. Calling China's performance "decidedly mixed," U.S. Trade Representative Susan Schwab released a 100-page report that accused China of failing to live up to commitments it made five years ago, when it joined the World Trade Organization.

In a long room filled with the smell of straw and the clatter of stitching machines, Ed Graves feeds fistfuls of broomcorn under a thin wire. He works quickly, cutting the extra stalks away with a long knife as the spinning machine turns wood, wire and straw into the familiar shape of a household broom. It's a good job, the top of the broom-making profession. He can earn up to $100 per day.

For hard-driving Rep. Richard A. Gephardt, House approval Wednesday of his controversial amendment toughening U.S. trade policy means attainment of a legislative goal that the Missouri Democrat has been striving toward for months. Even more important for White House aspirant Gephardt, the House action moved him a significant rung up the ladder in his climb toward a more difficult objective--capturing his party's 1988 nomination.

The entertainment industry, convinced that President-elect Bill Clinton will do more to advance its interests overseas than the outgoing Bush Administration, is urging White House officials to abandon efforts to complete a new world trade accord by Jan. 20. Hollywood executives consider a proposed global trade agreement being negotiated in Geneva to be fatally flawed because it allows countries to restrict imports of American-made films and television programs.

A growing number of Asian nations are considering forming an Asia Pacific trade bloc to counter what they fear is increasing protectionism from trade zones being created or proposed by the European Community and the governments of North America. The scheme--by promoting trade between many Asian nations that until now have not been close trading partners--is in some ways more ambitious than the plan that will create a single economic European Community in 1992, analysts say.

Pardon the Ecuadoreans for being a little dubious about "free trade." An international banana war triggered by the European Union has devastated plantations clustered around this coastal city. The effect has been the same in Panama, Guatemala, Honduras and El Salvador. It has also rippled through the boardroom at Dole Food Co. in Westlake Village and clobbered consumers in Europe.

Nearly five decades after the infamy of Pearl Harbor, Japan and the United States once again find themselves in a state of belligerence. This time, however, it is a war of words instead of bullets, and casualties are counted in terms of disputed opinions, warped perceptions and ruffled sensibilities. So much fur is flying these days that it is easy to lose sight of the fact that Japanese and Americans still basically like each other.

The momentous power shift on Capitol Hill last week briefly sounded alarm bells on Wall Street. Some investors quickly dumped healthcare and defense stocks on fears that the Democratic takeover of Congress would hurt those industries. But apart from those sectors, the market couldn't identify many other potential casualties of the changeover. If the end of the 4-year-old stock bull run is near because Republicans no longer rule the House or the Senate, it wasn't apparent in broad market indexes.

From Paris to Berlin, and from Warsaw to Rome, governments are showing increasing hostility toward foreign companies wishing to take over prized national assets. The obstacles faced by bidders from abroad include discriminatory laws and downright opposition against individual mergers. The trend has caused concern not just in the boardrooms of acquisitive European companies, but also in the European Commission.

For Hollywood, the decision this week by delegates to a key United Nations agency to back a treaty to promote cultural diversity is reading like the script to a bad sequel. On Friday, the Motion Picture Assn. of America trade group warned in a statement that the U.N. Educational, Scientific and Cultural Organization accord was protectionism in disguise, the latest attempt by some countries to enact barriers that could allow them to restrict the importing of American movies and music.

Two U.S. senators said Thursday that they had agreed to delay a vote on a bill threatening China with steep tariffs after being convinced that China could revalue its currency soon. Sen. Charles E. Schumer (D-N.Y.) and Sen. Lindsey Graham (R-S.C.) told reporters that they had struck a deal with Treasury Secretary John W. Snow to put their bill on hold until later this year, giving China more time to act on its own to revalue the yuan.

As the proposed Chinese purchase of Unocal Corp. fanned protectionist passions in Congress, Federal Reserve Chairman Alan Greenspan warned senators Thursday not to let their frustrations with China's economic policies breed reactions that would do the U.S. economy more harm than good. Proposed tariffs against Chinese goods and other forms of protectionism would significantly lower U.S. living standards and would not save American jobs, Greenspan told members of the Senate Finance Committee.

Growing protectionist sentiments in this country, which have escalated tensions between the United States and some of its key trading partners, are threatening to stall the global movement toward freer trade. That in turn could provoke trade wars that would slow global economic growth and penalize American consumers through higher prices for a wide variety of goods, including clothing and television sets, some economists fear.

Branding it "protectionism at its worst," President Reagan on Wednesday vetoed controversial legislation that would increase quotas on textile imports, saying it would threaten American jobs, raise prices and jeopardize prospects for increasing U.S. exports around the world. White House spokesman Marlin Fitzwater said that the President is confident Congress will not override the veto.

Negotiators for two companies at the center of a bitter dispute over access to Japan's cellular telephone market are close to a settlement that could head off threatened U.S. sanctions. The Clinton Administration has started a process that will allow it to impose several hundred million dollars' worth of sanctions on Japanese exports to the United States for what it views as Japan's failure to live up to the terms of a 1989 market-opening agreement. The dispute, which involves Motorola Inc.

Mexico partially lifted its ban on U.S. beef imports, announcing that boneless cuts from animals less than 30 months old and veal from animals less than 9 months old could be imported. The government had imposed a ban Dec. 24, the day after a single case of mad-cow disease was reported in Washington state. Mexico has been the second-largest foreign market for U.S. beef. From Associated Press

U.S. lawmakers should avoid protectionist policies as labor markets pass through a realignment that is causing a "high degree of pain" for some workers, Federal Reserve Chairman Alan Greenspan said. "Competition from abroad has risen to a point at which developed countries' lowest skilled workers are being priced out of the global labor market," Greenspan said via satellite to the HM Treasury Enterprise Conference in London.