Confrontation Opens Trade Gathering : Shultz Lectures Singapore Official Who Attacked U.S. Decision

An Asian official’s public attack on a recent U.S. trade decision sparked a face-to-face confrontation rarely seen in a diplomatic setting and a toughly worded lecture Wednesday from Secretary of State George P. Shultz.

Shultz, bristling at a Singapore cabinet minister’s accusation that U.S. trade policy lacks “credibility and reliability,” declared: “If that’s what you believe, there’s very little basis for a genuine dialogue.”

Trade Surpluses at Issue

The confrontation took place at the brief, public opening of the private, annual conference between State Department trade officials and representatives of the Assn. of Southeast Asian Nations.

After Shultz delivered short welcoming remarks, Yeo Cheow Tung, who is Singapore’s minister of state for foreign affairs and the chief of the ASEAN delegation, blasted a U.S. decision to remove his country, Hong Kong, South Korea and Taiwan from a list of developing nations whose exports receive preference in the United States.

The four Asian countries were dropped from the list because of their trade surpluses with the United States and because they are now considered wealthy enough to stand on their own feet.

President Reagan, in announcing the decision, said the four so-called little dragons of Asia had robust economies and no longer qualified as developing nations. They had avoided $450 million to $500 million in duties under the General System of Preference, which enables developing nations to export duty-free to the American market.

‘Undermined Promises’

Yeo, facing Shultz across the meeting room, said the United States last year promised Singapore it would stay on the list in return for a Singaporean promise to stop infringing on U.S. copyrights and trademarks.

“Singapore feels in particular that by this decision the United States has undermined the promises of good faith on major relations between states,” Yeo said. “This action has cast doubts on U.S. credibility and reliability. This U.S. action is detrimental to the long-term relations between ASEAN and the United States.”

Shultz responded sharply and with some sarcasm:

“You just try going before a congressional committee and say we should give a special break to Singapore because that poor struggling country hasn’t figured out how to export and see how you’re treated,” he said. “You can’t make that case.

“I don’t mind a good argument and I’m putting it here, but to have the net of that argument be that your country considers my country to be untrustworthy and unreliable is, I think, going further than I would like to go.

‘Your Privileges’

“I think the United States tries to play by the rules.”

The special treatment for Singapore’s goods to be rescinded “aren’t your rights, they’re your privileges in our market,” Shultz said. “It’s not your market, it’s our market.”

Shultz then left the conference, as scheduled, turning the chairmanship of the U.S. delegation over to what he termed the “tender mercies” of Allen Wallis, undersecretary of state for economic affairs.

Wallis faced Yeo and declared: “My mercies are less tender than the secretary’s, so I’ll skip the subject and regret that you raised it in such intemperate terms.”