Time To Back Up The Tough Talk On Trade
The U. S. on Apr. 27 declared its intention to retaliate against China, India, and Thailand for their piracy of U. S. computer software, drug patents, and other intellectual property. At the same time, the Administration announced that Japan will be barred from bidding on a list of U. S. government-funded construction projects in reprisal for Tokyo's refusal to open its public-works-construction market to American companies. The announcement about Japan was made while a Japanese trade delegation was meeting with U. S. negotiators a half mile away.
The tough trade sanctions were long overdue. China was warned two years ago that it faced sanctions under U. S. law. And an investigation in November, 1989, by U. S. Trade Representative Carla A. Hills determined that the Japanese construction market was closed to U. S. bidders. So after months of procrastination, why the sudden rush to retaliate?
Actually, the motive for the timing is simple: Hills is scrambling to demonstrate her willingness to wield a retaliatory cudgel. Congress, skeptical of the Administration's resolve to use the market-opening tools provided by the 1988 trade act, has been holding hearings asking why there has been no action. But now, there is a new ingredient that changes the situation: The Administration badly wants Congress to authorize negotiations for a free-trade treaty with Mexico. The vote to enable talks on this controversial pact is scheduled for May, and many in Congress want to make sure the White House is committed to a tougher line. Although retaliation isn't certain--further negotiations may lead to reforms and cancellation of sanctions--the tough posture sets the correct tone for the trade talks that are to come.