Carving Out A Place In The Pacific Century

America used to be a Big Daddy to East Asia. Its sprawling military presence protected Asians from Soviet- and Chinese-backed communism, while American companies poured investments, totaling $46 billion by 1990, into the region. Americans also encouraged Asians to launch export drives into the vast U. S. market while turning a blind eye to barriers around Asians' own markets. Two-way trade across the Pacific climbed to $285 billion last year, one-third greater than transatlantic trade, with East Asians running a $75 billion surplus. Decade after decade, such surpluses have provided the fuel for the region's economic lift-off.

The relationship started to change even before the end of the cold war: As Asians prospered and U. S. economic troubles mounted, Washington began demanding fairer trading terms. But now, the collapse of the Soviet military threat and a growing sense of economic distress in the U. S. are reshaping American interests in Asia drastically. The U. S. is pulling nuclear weapons out of South Korea, closing bases in the Philippines, and withdrawing 10% of its military forces from the region. At the same time, Washington is demanding greater access to Asian markets while threatening retaliation against the trade practices of such countries as China and Thailand.