His successful fight for a North American Free Trade Agreement behind him, President Clinton finally began focusing on Asia last week, attention the world’s most dynamic economic region has long deserved.
While the president tried to use a summit of 14 Asian-Pacific leaders to highlight economic opportunities in the world’s most populous continent, he faces a host of problems in that troubled and troublesome area, ranging across the strategic, political and economic map.
For starters, there’s the possibility that North Korea is developing nuclear weapons. There’s the festering human rights violations by China and
Indonesia. And there’s the complicated trade and investment barriers erected by the rapidly developing states of East Asia, which collectively ran a $93
billion trade surplus with the U.S. last year.
In the part of the world where the U.S. fought three major wars over the last half-century, the president will discover in the next several months that Asia can prove as complicated a mine field to negotiate as the European quagmires he seems so anxious to leave behind.
Keeping to the theme that brought him success on NAFTA, the president emphasized economics during three days of talks in Seattle with leaders of the Asia Pacific Economic Cooperation forum, a loose confederation of 17 Pacific Rim economies. Mexico and Papua New Guinea were added to the list of nations participating in the historic summit.
“We come here hoping to drive down trade barriers, open up trade opportunities and promote more growth,” Clinton told a cheering crowd of Boeing workers shortly after his arrival
Thursday.
But the new directions signaled during his personal meetings with Chinese President Jiang Zemin and Japanese Prime Minister Morihiro Hosokawa, and the summit with the APEC leaders did not add up to a coherent strategy.
When Clinton first suggested a Pacific Rim summit at last July’s Tokyo meeting of G-7 industrialized nations, there was a vague notion that the 4-year-old APEC could somehow how evolve into a regional multilateral forum capable of resolving many of America’s longstanding economic
problems in the region-market access, copyright violations, investment
barriers.
The U.S. business relationship with Asia over the last two decades has all too often seemed like a one-way street to many Americans, with their goods flowing to the U.S.
APEC was also perceived as politically necessary to pre-empt an Asian-only economic bloc, which had been suggested three years ago by Malaysian Prime Minister Mohamad Mahathir. Most Asian leaders’ initial reaction to NAFTA was fear that it would be used to exclude Asian goods and investment, and some type of exclusive arrangement among themselves might be needed as a counterweight.
Despite those fears, Asian leaders never warmed to Mahathir’s idea. Although their dependence on the U.S. market is declining as they trade more and more among themselves, the diverse and contentious states of East Asia still crave a U.S. presence in the region.
The U.S., they realize, remains the world’s only superpower capable of maintaining stability among the often quarrelsome states and ensuring against hegemonistic designs that might arise in either a fast-growing China or economically potent Japan. They saw APEC as a way of cementing America’s continued engagement in the region.
Once that was assured, however, Clinton’s trade and investment agenda seemed superfluous. Market access has never been a problem for Asians in the U.S. So the U.S.’s initial call for turning APEC into a forum for tackling trade barriers in the region-which mainly affect the America’s ability to sell abroad-was ignored at the meeting.
A report crafted by free marketeer C. Fred Bergsten of the Washington-based Institute for International Economics with help from representatives of 11 other APEC states, had set 1996 as a target for turning the organization into an agenda-setting group capable of dealing with trade barriers.
The APEC ministers listened politely, and then set up an innocuous trade and investment committee. They asked Bengsten’s group to take another year and come up with a revised set of recommendations.
Japan would have the most to lose by a multilateral approach. It registers trade surpluses and has trade conflicts with nearly every other country in APEC. Not surprisingly, it led the effort to reject the report.
Its ministers demanded that APEC move through consensus only, a view echoed by the smaller economies of East Asia that are emulating the export-led growth strategy pioneered by Japan.
Clinton, speaking to the press after his meeting with Hosokawa, gamely volunteered that the leaders of the two countries that have the world’s most intractable trade problem had agreed only that APEC existed to “promote trade and mutual understanding.”
The two men will meet again in February, when they will be expected to reach market access agreements for telecommunications, insurance, automobiles and auto parts. The two sides remain far apart on setting numerical targets for measuring progress.
At the end of their talks, U.S. Ambassador to Japan Walter Mondale highlighted Clinton and Hosokawa’s discussion of a Toyota-General Motors agreement to sell an additional 20,000 U.S.-built cars in Japan. The pledge was sadly reminiscent of the promises made at the ill-fated summit between President George Bush and Prime Minister Kiichi Miyazawa in January 1992, a meeting which many analysts cite as the beginning of the end of both men’s political careers.
There was also no movement on the agricultural trade issues in Japan and South Korea that stand in the way of successfully concluding the Uruguay Round for a new General Agreement on Tariffs and Trade.
While the leaders issued a joint call for meeting the Dec. 15 deadline for a new GATT-which would give the Clinton team its much hoped for trade triple play of NAFTA, APEC and GATT-Hosokawa again deftly dodged any concession on rice, calling it a “difficult domestic issue.”
Although Clinton’s APEC strategy held out scant short-term prospects of winning much on the trade front, the administration used the forum to escalate its pressure on North Korea. Secretary of State Warren Christopher renewed U.S. threats to seek United Nations sanctions if the world’s most isolated regime didn’t open its nuclear power facilities, suspected of harboring a bomb program, to international inspections.
That situation could explode into a crisis within weeks. Diplomats in Seattle said North Korea is demanding the U.S. recognize its regime in exchange for returning to the nuclear Non-Proliferation Treaty fold.
The U.S. said North Korea must first allow in inspectors and resume its dialogue with South Korea before it will begin discussing recognition.
Standing before the other APEC ministers-including those from China, North Korea’s nominal ally-Christopher held out a carrot Friday to go along with the stick of sanctions: “I would encourage North Korea to rejoin the international community and take advantage of the kind of opportunities in trade and investment represented here.”
The carrots held out to China were more substantive. In talks between the president and Jiang, the U.S. agreed to resume sale of supercomputers in exchange for some minor human rights concessions. The administration’s new approach of “total (diplomatic) engagement,” adopted after a policy review finished in September, represents a sharp reversal from candidate Clinton’s rhetoric on human rights and the early months of the administration.
The president raised the full range of U.S. concerns during his meeting with Jiang: non-proliferation of Chinese missile technology; access by International Red Cross observers and the early release of political prisoners; access to prisons by U.S. Customs inspectors to make sure prison labor isn’t used for exportable goods; and political dialogue with the Dali Lama of Tibet, where human rights conditions were judged “very adverse.”
He said next year’s renewal of most-favored nation status would hinge on positive movement on all those issues.
While neither the president nor the Chinese indicated any movement from the discussion, “we have made a good beginning,” Clinton said. “We seek to resolve these differences through dialogue and negotiation.”
The new policy’s success in changing the internal politics of China remains doubtful. China, which ran a $18 billion trade surplus with the U.S. last year, increasingly realizes that the U.S. needs access to its superheated markets as much or more than China needs U.S. investment and technology. They also hold an influential card with their ability to pressure North Korea.
With an economy growing at 12 percent a year, the increasingly assertive Chinese leadership is in no mood to be pushed around on the world stage. That self-confidence was on display in Seattle.
China’s deputy foreign minister Wu Jian Min snapped that Tibet’s human rights situation before 1959 when China took over that country “was worse than American Negro slavery.”
“The East and West have differing concepts of human rights,” he said. “For Asians, we emphasize the rights of the many, not the rights of the few.” China calls the annual U.S. threat to remove its most-favored-nation trading status “a relic of the Cold War.”
Clinton’s newborn engagement with Asia obviously holds both promise and peril for his still-young administration. The business opportunities are great. But the potential pitfalls may be even greater, whether in resolving the North Korean nuclear problem, in trade talks with Japan or in making human rights demands on China.
“If he looks like a paper tiger and settles for minimal concessions, he’ll lose credibility with the other nations of Asia,” warned Mike Jendrzejczyk of Asia Watch.
