The Pacific : Trade, Economic Ties : U.S. Plans Partnership to Cement Asia Relations

The United States is planning a new Pacific trade and economic partnership, including Japan, Australia and other capitalist countries aimed at cementing Washington’s relations with East Asia.

The so-called Pacific Rim initiative is expected to be announced today by Secretary of State James A. Baker III, who will present details to Australian Prime Minister Bob Hawke and Japanese Foreign Minister Hiroshi Mitsuzuka. Both are scheduled for Washington visits.

U.S. officials said the initiative--which draws on an earlier Australian proposal--is partly a response to the emergence of regional trade blocs in the world, notably the creation of a single European market by 1992. But it also reflects trade trends; 37% of all U.S. trade is with East Asia, compared to 20% with the European Community.

A second factor is Japan’s trade surplus with the United States, which reached $52 billion last year. A senior U.S. official said the Bush Administration wanted to better manage its relations with Japan that form “the keystone of our dealings in the Pacific” and prevent trade and technology disputes from undermining them.

The importance of the U.S.-Japanese relationship has encouraged talk of a free trade arrangement between the two countries. But last week Richard Solomon, President Bush’s nominee as assistant secretary of state for the region and a chief architect of the new policy, said the United States intended to seek an “appropriate multilateral mechanism” to deal with trade, financial, technological and environmental issues for the region.

Solomon said Baker would unveil the proposals in a speech in New York today and during next month’s trip to Asia. Baker will attend the meeting of ASEAN, the diplomatic forum for Southeast Asian nations, before he moves on to the economic summit for main industrialized nations in Paris.

U.S. policy toward Asia has slowly taken shape only this year, and the Administration is currently preoccupied with China. However, Sen. Bill Bradley (D-N.J.) has been pressing for what he calls a new Pacific Coalition, initially made up of eight countries. The group would be committed to reinforcing open trade, ensuring greater economic policy coordination and removing obstacles to growth.

Australia put forward its own proposals this year that envisaged similar cooperation and consultation among members along the lines of the Group of Seven meeting among the leading industrialized countries. Hawke wants to hold a meeting in the Pacific region in November and is expected to press Baker and Bush for early action.

The Australian plan also envisaged an economic secretariat that would analyze economic trends and identify areas of product duplication among countries. It is unclear whether the United States would support measures that looked like economic planning.