Global/Multicultural
References Work Place Case
June 13, 1994
The problem is that Washington's recent attempts at exercising influence have disintegrated into fits of bluster and brinkmanship, with few results. The year long campaign to influence Japan to open specific markets to U.S. competitors got nowhere; a new effort is underway,but no one is promising much success. The push to influence China's handling of human rights led only to a backing down by Washington. Efforts to influence the nuclear hermits of Pyongyang have reached a scary impasse. And attempts to coax cooperation from Japan and China in pursuing sanctions against North Korea are logjammed.
All told, it is a good time for President Clinton to have visited Europe—and not just to revel in past bravery at Normandy. The trans-Atlantic ceremonies served as a reminder that the influence game is best played among familiars, where a baseline of shared cultural experience and common values protects against the marathons of miscommunication that have plagued the Clinton team's Asian diplomacy.
Since Asia's surging economies are producing most of the world's economic growth, Americans should pursue every possible business advantage there. But more far-reaching Pacific partnerships seem to come with built-in limits. Whether the U.S. is pushing for construction contracts or leniency for a spray-painting teenager, there's an unavoidable propensity for East and West to talk past one another.
In contrast, the biggest danger for the trans-Atlantic partnership isn't miscommunication but complacency. There's been little sustained effort to build a forward-looking alliance for the next century, and ruminations over history tend to reinforce a much-overplayed rhetoric that links Asia to a dynamic future and relegates Europe to a storied past.
For U.S. trade, economic realities tell a different story. A study issued by the Economic Strategy Institute points out that in three industries that the U.S. considers critical to its future-telecommunications, office equipment and civilian aircraft-the U.S. has been running consistent trade surpluses with the European Union and trade deficits with Asia.
The U.S. sells about $12 billion annually in office equipment, including computers, to the EU, compared with $8 billion to Asian countries. Not withstanding the Asian boom, sales there have been flat since 1990. Until the European recession of the past two years, U.S. aircraft sales to EU countries outstripped sales to Asia.
This comparatively strong trade performance comes despite European trade barriers in all three sectors. That would suggest that if the U.S. can continue whittling down some of Europe's projectionist policies, exports there will expand, particularly as the European economies climb out of their slump.
A look at investment in the U.S. is equally telling. Despite the attention devoted to Japan's U.S. acquisitions, the largest overseas investor in the U.S. is Britain. Taken as a whole, the EU accounts for 59% of the direct investment here, compared with 26% for the Asians.
Robin Gaster, who worked on the study, predicted that "in 10 years' time, the European side will be considerably higher," while "we've reached the peak of Asian investment."
Europeans also pour more money into research in this country. The ESI study showed that in 1991, European investors spent $7.7 billion in research and development in the U.S., compared with 51.5 billion spent by Asian investors.
After the wheel-spinning in Asia, the Clinton administration should do more to extend its influence where it stands a greater prospect of producing results—by building an economic partnership out of the trans-Atlantic links that already exist. One priority should be a trans-Atlantic competition policy, under which the U.S. and EU could agree to a common set of guidelines on matters such as subsidies, public procurement and local-content rules.
If the U.S. and EU conceived their partnership as a strategic economic alliance, the two sides perhaps would become less riveted on the rancorous trade battles that erupt over such matters as movies, rapeseeds and hormones for cows.
The trade squabbles are inevitable, The EU has plenty of internal ones to referee despite the 1992 dawning of a unified market and the march toward greater unity. What's important is that the bickering, when it erupts, is set against the backdrop of a solid economic alliance.