US Needs Stronger Partners Than NAFTA's

THE late Douglas MacArthur would have been intrigued by recently-introduced congressional legislation that calls for American leadership in the creating of Pacific Rim free-trade zones that would include this country and Japan.

General MacArthur was a brave warrior who came to hate war, and a patriotic American who became the effective Emperor of Japan. He was as complex as the political and economic challenges that face us today.

We live in an era when local prosperity depends heavily on global trade, and corporations, while maintaining a national image as "American" or "Japanese," in fact operate on a multinational basis.

We can, for example, expect to see more Japanese companies locating factories in Mexico as a result of the North American Free Trade Agreement (NAFTA). And many American manufacturers are doing the same.

I know that many American business and political leaders are worried about the possible export of American jobs to Mexico because of this agreement. I share that fear. And I also worry that the development of regional trade blocs, like the European Community and NAFTA, may have a devastating effect on world trade.

An Asian economic community is also beginning to emerge. Like the European Community, it shows protectionist tendencies to countries outside the bloc. And both blocs may exclude America.

Think what it would mean, just for the United States, if these tendencies become fully developed over the next decade.

On the other side of the North Atlantic, the 12 members of the European Community have a combined gross national product (GNP) of roughly $4.8 trillion.

And, across the Pacific, the nations of East Asia today have a GNP of about $2.7 trillion.

By contrast, in a North American free-trade zone the US would be left with two trading partners, Canada and Mexico, that have a combined GNP of only $612 billion. That's roughly 12.5 percent of Europe's GNP. Not much of an export market for America.

Under those conditions, the export-driven economy of the United States would crumble. And, because of America's dominant position in the world economy, any serious blow to the American economy would spark a global depression.

Legislation has recently been introduced in Congress that could represent a first step toward achieving something I have long advocated: a Pacific Rim Economic Community that would include Japan and the US.

This bipartisan legislation, H.R. 763, has attracted almost no attention in the news media.

Introduced by Reps. Sam Gibbons (D) of Florida and Philip Crane (R) of Illinois, the bill calls on the president to start preliminary talks on creating free-trade zones among the nations of the Pacific, including Japan and the US.

I believe a Pacific Rim Economic Community that would include Australia and all the American and Asian nations bordering the Pacific, would be a useful counterbalance to the powerful EC in negotiations aimed at keeping world trade patterns free and open.

Many historians agree that the protectionist trade wars of the early 1930s were a factor, not only in spreading the Great Depression, but also in adding economic factors to the causes of World War II.

I admit that free trade won't solve all our problems. And I agree that Japan's markets must be more open to imports. But I worry about protectionist trends in Europe, Asia, and America.

MacArthur, who ruled Japan with absolute authority from 1945 to 1950 during the American postwar occupation, was very much a man of the Pacific. I believe he would have approved the idea of a Pacific Rim Economic Community.

I hope that today's leaders of Japan and America will agree.