U.S. Says It Can’t Balance World Trade Alone

The United States warned Sunday that it cannot reduce its outsized trade imbalances on its own, and called on West Germany and Japan to step up their efforts to trim their trade surpluses, which are the mirror image of America’s trade deficit.

In a speech before the policy-setting Interim Committee of the International Monetary Fund, U.S. Treasury Secretary Nicholas F. Brady reiterated American calls for the two trading partners to spur more demand at home and open up their economies to more U.S. exports.

“The United States cannot solve the world’s problems alone,” Brady told the closed meeting, according to a portion of his remarks that was made public by the Treasury. “We cannot reduce our external deficit unless surpluses elsewhere decline.”

He also repeated warnings by finance ministers of the United States and its major economic allies that the dollar’s value has risen too far. And he vowed new joint action by the allies in the foreign exchange markets to help keep the dollar in check.

Massive Intervention

Brady’s remarks came as the Group of Seven, as the finance ministers’ group is known, made preparations for what is expected to be massive intervention in the markets today as currency traders try to test the resolve of the industrial countries’ central banks. In addition to the United States, the group includes Britain, Japan, West Germany, France, Italy and Canada.

The seven warned in a communique on Saturday that any further increase in the value of the greenback could hurt the world economy. The ministers are worried that if the dollar rises any more it could reverse recent progress in reducing the U.S. trade deficit.

Meanwhile, Brady and the finance ministers of West Germany and Japan joined in rejecting a plea by developing countries to approve a new issue of “special drawing rights”--artificial reserve assets that developing countries want used to provide added aid.

Brady and finance ministers Theo Waigel of West Germany and Ryuarto Hashimoto of Japan all argued that Third World countries had not made a convincing case that more SDRs were needed. They also declined to increase the maximum limits for IMF borrowing by poor countries.

The IMF and its sister organization, the 152-country World Bank, are scheduled to begin four-day-long annual meetings here today, with the major debate over whether to grant an IMF request for a doubling of its lending resources.

The United States still opposes any such move, contending that the IMF still must define more fully what its role will be in the next decade. Most other industrial countries have said they will back a small increase in IMF resources, but not the doubling that the IMF would like.

In a related development Sunday, the Group of 10, which comprises finance ministers of 11 large industrial countries, pledged to try to resolve the conflict in lending resources and bring the issue to a vote by the end of the year.

The group also underscored Brady’s assertion that the industrialized countries need to do more to help trim back huge global trade imbalances. But the ministers stopped short of admonishing West Germany and Japan on what to do.