Treasury Secretary Nicholas F. Brady, in a rosy review today of the Paris economic summit, hailed the progress being made to unwind global trade imbalances but said Japan and West Germany might need to do more to keep their economies growing.
Previous American calls for faster growth abroad have sometimes been controversial. Although the United States has a keen interest in ensuring expanding overseas markets for its exporters, Tokyo and Bonn have both had to raise interest rates this year to prevent their economies from overheating.
Brady, testifying to the Joint Economic Committee of Congress, acknowledged that Japan and Germany grew strongly in 1988 and in the first part of this year, sucking in imports that helped trim their huge trade surpluses with the United States.
"But it is vital that both also be ready to consider additional . . . measures if domestic demand growth falters," the Treasury secretary said.
He said the seven countries at the Paris summit--the United States, Japan, West Germany, Britain, France, Italy and Canada--reaffirmed their determination to coordinate their economic policies.
This process of international policy coordination is paying off, Brady said. World economic growth is poised to continue at least through 1990, inflation concerns are receding and trade imbalances are being ironed out.
Economic policy challenges remain, however. Although the dollar is now not too far above the levels prevailing when the Group of Seven finance ministers met in Washington on April 2, exchange rates must be monitored closely, he said.
Brady was also optimistic about his plan for slashing the Third World's $1.3-trillion debt. The pace of talks between commercial banks and Mexico, the first test case of the plan, has been disappointingly slow but an accord is likely reasonably soon, he said.