Japan, W. Germany Cutting Trade Gap--Baker
Japan and West Germany are beginning to succeed in cutting their huge trade surpluses with the United States, but more rapid progress is needed, U.S. Treasury Secretary James A. Baker III said Tuesday.
Baker told trade and finance ministers from 24 leading industrial countries that the Reagan Administration wants faster improvement in U.S. trade in order to combat protectionist pressures in Congress.
“Those pressures threaten the world trading system more now than they have in perhaps 60 years,” Baker told the opening session of a two-day meeting of the Organization for Economic Cooperation and Development.
Baker gave a generally upbeat assessment of efforts by the major industrialized nations to coordinate their economic policies. But some other ministers took a gloomier view.
Michael Wilson, the Canadian finance minister, said governments of the most powerful economies had failed to translate promises into concrete action. He cited as an example the continuing large U.S. budget deficit.
“Doubts about the U.S. commitment to deficit reduction are bringing into question strategies to maintain world growth,” Wilson told the meeting.
Texts of the officials’ speeches to the closed meeting were made available afterward.
Sweden’s finance minister, Kjell-Olof Feldt, said that while it was generally agreed that trade imbalances were at the heart of the world economy’s problems, no country appeared ready to take corrective action.
“Unfortunately, there is a tendency in the current international policy debate to try to shift the main burden of responsibility on to somebody else,” he said.
Baker said he was encouraged that Japanese and West German imports now were growing faster than those nations’ exports, thus relieving some trade pressure.
But he added that the U.S. trade deficit, which reached a record $166 billion last year, is narrowing more slowly than he had hoped.
Baker said the Reagan Administration remained committed to reducing the U.S. budget deficit and was opposed to further declines in the value of the dollar, which make U.S. products more competitive overseas.
