The Big Push

In his own mind. President Kennedy is just about resigned to the fact that in Election Year 1962 he will not be able to steer through Congress such favorite New Frontier measures as aid to education and medical care for the aged. But the President is determined to push through a policy every bit as controversial: a liberalized U.S. world-trade program. Last week the big push began.

Appearing before some 1,000 U.S. businessmen in Manhattan's Waldorf-Astoria Hotel, George W. Ball, the Under Secretary of State for Economic Affairs, delivered a White House-approved speech that gave the broad outlines of the President's trade program. Most simply, Ball urged across-the-board tariff cuts and close ties with Europe's Common Market.

End of an Era. Ball was aware that such a policy will meet with strong opposition. "There is hardly a day," said he, "when a representative of industry does not assert emphatically to us in Washington that his industry needs a system of rigid quotas to keep out foreign imports or it will perish." Ball argued that European nations also resisted such changes when the Common Market was first proposed. Yet once they made the "hard choices"--mergers, increased investment, modernization--"many found to their great relief that the dreaded competition from other European producers was not so formidable after all. The adjustments have, in fact, been far less painful than were anticipated." Now, said Ball, the Common Market has ties to 16 nations, may tie in with some 60 more if the United Kingdom's trading system is added. "What we may well see emerge is the concentration of nearly 90% of total Free World exports of industrial products in two great Common Markets--the Common Market of Europe and the Common Market of the U.S. We have reached the end of an era in which the U.S. was the one dominant country of the trading world."

Since he was addressing a hardheaded audience, Ball conceded that certain industries will be hurt by tariff cuts. Some may need federal aid "to speed the transfer of the labor and capital into the more productive channels which the American economy constantly provides. But up to a certain limit of tolerance, individual industries and companies should be expected to assume the burden of such adjustments for the good of the economy as a whole." Indeed, Ball insisted, the U.S. has little choice but to move toward freer trade. "We have been the evangelists of the virtues of free competition. We have preached this gospel incessantly to our European friends." Should the U.S. surrender to protectionism, "we would set off a chain reaction of retaliation and counter-retaliation that would do irreparable harm to the whole Free World, but would hurt us most of all."

Other Voices. At a resort hotel in the shadow of Japan's Mount Fuji, meanwhile, Japanese Cabinet members sat down at a felt-covered table for frank economic talks with five opposite numbers in the Kennedy Cabinet. The U.S. billed the three-day meeting as an "informative" discussion; Secretary of State Dean Rusk warned his Cabinet colleagues--Labor's Goldberg, Commerce's Hodges. Agriculture's Freeman, and Interior's Udall--not to make statements that sounded like commitments. But U.S.-Japanese trade problems were frankly discussed. "Among American people," said Foreign Minister Zentaro Kosaka, "we note a tendency to stress negative aspects in our economic relations, such as alleged low wages in Japan and disruption of American domestic markets by Japanese goods."

Kosaka and his colleagues argued that Japanese wages were rising, complained that Japan had a hazardous imbalance of trade with the U.S., last year bought $200 million more in goods than it exported to this country. Rusk politely pointed out that Japan had a healthy balance of trade with other nations. Nevertheless, the U.S. delegates promised to support efforts to "reduce or eliminate" trade barriers against Japanese goods in Western markets. In all, it was a worthwhile session--as both sides came increasingly to realize that there could be mutual profit in liberalizing their economic attitudes toward each other.

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