The World Sizes Up Clinton

When Governor Bill Clinton visited Hong Kong a few years back to drum up interest in Arkansas, the then-U.S. Consul General offered to host a welcoming cocktail party. Trouble was, "I could hardly get anyone to come," recalls Burton Levin, now director of the Asia Society Hong Kong Center. Levin's only suggestion to the jilted governor was to try and interest local executives in the prospect of importing Arkansas catfish.

Today, of course, if Clinton were to visit, organizers would need to rent out the 83,000-seat Shatin Racecourse stadium to hold all those who would come to check out America's new leader. Indeed, all eyes around the world are on the President-elect, an unknown quantity when it comes to foreign affairs. In Hong Kong, leaders await signs of Clinton's tilt on human rights vs. trade with China, since the colony's future rests with Beijing. And around the globe, there's much at stake.

Clinton campaigned to become the first post-cold-war President. He vowed to move beyond obsolete East-West divisions and put the U.S. economy at the top of his agenda, to lead the world from a position of strength. A whole new set of international relations needs mapping out. The world is watching to see just how Clinton shapes a new American foreign policy.

The first signals will come quickly enough. If a trade brawl with Europe, turmoil in Russia, and a widening war in Yugoslavia aren't enough, there is also the delicate Middle East peace process to prod forward. Down the road, Clinton faces a slew of trade disputes with Europe and Asia.

INFORMAL. Meanwhile, friends and foes alike are trying to take the measure of the man, hard as it is before key Cabinet posts are filled and policies are outlined. New to the world stage, Clinton has few personal relationships abroad, and his informal style is jarring to some old-school players. German Chancellor Helmut Kohl addressed his congratulatory telegram to "William Clinton" and was taken aback to learn that the President-elect goes by "Bill." Even the "special relationship" with Britain will need extra tending. Clinton's campaign talk of sending an envoy to Northern Ireland and withdrawing U.S. troops from Europe have Britain's Foreign Office on edge.

What Clinton lacks in friendships he may make up for in shared outlook. Many of his policy prescriptions, such as business-government partnerships and national health care, have a familiar ring abroad. "In the 1980s, Reaganism was applied by the Europeans. Now, it's the reverse. For Clinton, Europe is . . . a model," says Dominique Moisi, associate director of the French Institute of International Relations. Clinton also seems more willing than Bush to share global power. He backs permanent seats for Japan and Germany on the U.N. Security Council and likely wouldn't block a Franco-German military force to supplement NATO. "Clinton doesn't think the U.S. has to do everything everywhere," says a top foreign policy adviser.

PINK SLIPS. U.S.-Japan relations, a trade mine field, will be one of Clinton's early tests. The subject: rice, one of Arkansas' big products. Tokyo has an absolute ban on imported rice, although it has agreed to open its market gradually, beginning with just 3%. But the impatient U.S. Rice Millers' Assn. is threatening to revive a complaint against Japan.

The pressure will mount when, just as Clinton takes office, Japan announces its largest trade surplus ever: more than $124 billion. At the same time, U.S. corporations competing with the Japanese, including General Motors, IBM, and AT&T, will hit employees with a blizzard of pink slips. Next, Japanese electronics manufacturers, which pledged to buy 20% of their semiconductors from the U.S., probably will miss a Jan. 1 deadline for compliance, prompting U.S. chipmakers to demand stepped-up pressure.

Meanwhile, a battle to shape Japan policy is in full swing as Clinton and his inner circle take soundings from a wide array of experts. As in other areas, Clinton advisers are divided--and the President-elect hasn't indicated which way he'll jump. Among those with Clinton's ear are hard-liners Glen S. Fukushima, a former trade official now an AT&T executive in Japan, Mike Mochizuki of the University of Southern California, and Robert M. Orr Jr., a onetime foreign aid official, now teaching at Temple University's Tokyo branch, who thinks Clinton's first trip abroad should be to Japan. But in general, Clinton doesn't share Bush's philosophical aversion to managed trade, advisers say. Instead of negotiating to open doors, Clinton may cut more deals, such as the semiconductor accord that set specific targets for U.S. access.

Of all trade partners, China has the most to fear. Clinton has backed congressional moves to link renewal of trade privileges to China's record on human rights and arms trafficking--bills Bush vetoed. At stake for China is $20 billion in exports to the U.S.--without which its speedy growth could derail.

CHINA CHOICE. Clinton has until June 3 to decide whether to renew most-favored-nation trade status for China. Some experts suggest that the U.S. has more leverage over China than Bush was willing to use. They point out that after Bush's F-16 fighter-jet sale to Taiwan this fall, China gave in to U.S. trade demands. One likely scenario: Clinton, mindful of China's emerging role as an economic superpower, presses for better performance on trade, human rights, and nonproliferation but gets Capitol Hill's blessing for mild or no conditions on MFN renewal. A key Asia adviser: Richard C. Holbrooke, a State Dept. official under Carter, who counsels against isolating China.

Before he has to worry about China, though, Clinton may have to face chaos in the former Soviet Union. Clinton criticized Bush for not doing enough to bolster Russian President Boris Yeltsin. But just as it's becoming clear that the former Soviet Union will need mountains of Western aid, Russia's retreat from reforms and its backsliding on arms-control pledges threaten to undermine U.S. public support. "The U.S. has to do some heavy thinking about what we can and cannot tolerate," says a State Dept. East-West expert.

And elsewhere, Iraq or a resurgent Iran may try to goad Clinton into a test of his willingness to use force. Clinton says he will keep the U.S. air cap over the region.

Military might, though, is bound to take a back seat to pumping up America's economic muscle in the new foreign policy agenda. "Our economic strength must become a central defining element of our national security policy," Clinton told a Georgetown University audience nearly a year ago. The world awaits Clinton's chance to put that principle into practice.

Amy Borrus, with Paul Magnusson in Washington, Karen Lowry Miller in Tokyo, Dave Lindorff in Hong Kong, Gail E. Schares in Bonn, and bureau reports

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