Clinton Team Begins Effort to Export To `Vanguard' Markets

TRADE experts - from White House policymakers to US exporters - say the best way to redress the nation's resurgent trade deficit is to broaden the focus beyond familiar but often frustrating markets and venture into largely unexplored territory.

A failure to do so, they say, costs American producers lucrative opportunities in densely populated countries with fast-growing economies that have an increasing appetite for industrialized-world supplies.

Opportunities in China, rapidly developing East Asia, India, Russia, and other "vanguard" markets represent enormous potential outlets for US business. But while Europe and Japan are gaining a competitive advantage, the US is slowed by a range of foreign policy and credit concerns as well as American parochialism.

Commerce Secretary Ron Brown says government can do a lot to position Americans exporters. "Look at what our competitors are doing - we've got to play a different kind of role as government." His recent travel schedule includes a trip to Saudi Arabia where a "$10 billion aircraft purchase is up for grabs" and to the upcoming Paris Air Show where he will lead the American aerospace industry's delegation.

"Just as [French] President [Francois] Mitterrand and [German] Chancellor [Helmut] Kohl have no problem flying to the far reaches of the world" to clinch contracts for European nationals, Mr. Brown says, it is crucial to "put the weight of American government behind US companies." Increased Commerce budget

If Clinton's fiscal plan wins congressional approval, Brown's department will receive the biggest budgetary increases. The administration plans to pour resources into national centers that transfer technology to small and medium-sized businesses.

"We've only scratched the surface on exports," Brown says, and with "cutting edge technology," the smaller US firms represent the nation's most dynamic export growth potential.

A senior US Treasury official suggests that if Washington revamped its aid policy, US manufacturers and service providers could greatly improve their position in markets now dominated by Japanese and European "tied aid" programs.

Tying US aid to the recipient country's purchase of American exports - such as selling power plants, telecommunications, water and sewage facilities - would push more US exports in India, Malaysia, and China and would reduce the $85 billion US trade deficit by $15 billion or more, he says.

At the very least, says trade expert Alan Tonelson, director of research at the Economic Policy Institute, the US government can beef up American exports by transforming diplomatic outposts that were once crucial during the cold war into efficient business centers abroad. He laments that very little has been done to ensure that US economic interests are represented around the world.

"Embassies are supposed to be the new front of commercial and trade opportunities," Mr. Tonelson says. Top on US Secretary of State Warren Christopher's agenda must be "how can I make life easier for [US Trade Representative] Mickey Kantor and Ron Brown," he says.

President Clinton's newly established National Economic Council, which works closely with the National Security Council, is examining whether links between foreign policy and commercial goals should be strengthened or disconnected. Trade ties and foreign policy

One of the administration's most vexing issues is how to make the most of trade ties with China without compromising US standards. Washington is troubled by Beijing's abuse of prison labor, its crackdown on democracy seekers and other human rights violations, and its its nuclear military sales to volatile nations.

By June, Mr. Clinton must decide whether to suspend most-favored-nation status for China this year, and risk retaliation by China, where US exporters sold $8 billion in goods last year.

"Sanctions and embargoes only work if they're in concert with other countries," says Montana Democrat Max Baucus, chairman of the Senate Finance Subcommittee on International Trade. "Suspending MFN to China would mean we'd be the only country to do so."

Clinton describes another trade frontier, Russia, as "a huge country ... with enormous opportunities for Americans to create jobs and to earn income and to reap the benefits of trade." But while US business is anxious to shore up Russia's economy and gain a foothold in the Russian market, it is constrained by problems such as Russia's lack of a legal framework and the nation's continuing inability to pay for foreign imports.

While such foreign and financial policy debates continue, there is an even more fundamental concern: the American perspective.

"American companies can be much more aggressive - we Americans tend to be isolated," Mr. Baucus says. This view is a holdover from the "end of World War II, when we thought we were the center of the universe, with a vast ocean on either side."