by Patrick J. Buchanan – October 20, 1997
For the Theodore Roosevelt Big Stick Award for 1997, permit me to nominate Harold Creel of the Federal Maritime Commission.
Fed up with Japan’s refusal to pay $4 million in fines, Creel last Thursday ordered all U.S. ports closed to Japanese ships. The Coast Guard was to carry out Creel’s embargo. On Friday, a stunned Japan capitulated, accepting U.S. demands to halt the harassment of U.S. shipping in Japanese harbors, which had caused the crisis. Creel’s escalation worked.
For years, this dispute has simmered. The Japan Harbor Transport Association, a group of stevedore concerns with links to Japan’s criminal cartels, the yakuza, has had an iron grip on Japan’s ports and has used that control to hassle U.S. shipping. Tokyo repeatedly failed to halt the anti-American abuses, though pledging to do so. In September, the Federal Maritime Commission began imposing a $100,000 retaliatory fine on each Japanese ship entering a U.S. port. When the fines ran up to $4 million, and Tokyo told its companies not to pay, Creel went to battle stations.
At the FMC, the spirit of Corregidor lives.
Apparently, the commission did not tell the president’s men a second Doolittle Raid was about to be launched on Tokyo. But by thumping Japan, the FMC got her attention, enabling President Clinton’s negotiator to convince Tokyo to get serious about its port problems.
Why did Japan become so accommodating? Simple. That FMC embargo put Japan’s entire U.S. market at risk. As Creel put it, “But for the commission’s actions, the Japanese would not be at the negotiating table today.” Exactly. The U.S. triumph in the 24-hour trade war proves it is not America that need fear confrontation with the mercantilist and protectionist regimes of Asia.
Consider Japan’s vulnerability to an administration willing to demand equal treatment for Americans — with a threat of sanctions. This year Japan will run yet another merchandise trade surplus with the United States from $50 billion to $60 billion. While Japan has 30 percent of our huge auto market, we have 1 percent to 2 percent of Japan’s lesser market. Were all U.S. ports to be closed to Japan’s ships, GM, Chrysler and Ford would swiftly recapture that 30 percent of the U.S. car market, and the U.S. auto industry would explode in unprecedented prosperity. And Tokyo knows it.
If Japan would get its clock cleaned in a trade war with the United States, Beijing would collapse on its stool before the bell rang for the first round. And China knows it. That is why on this month’s U.S. tour, the Chinese will behave like panicky Christmas shoppers, ordering chemicals, farm goods, Boeing planes, autos and so on. Purpose of the shopping spree: Dupe gullible Americans into thinking China is a big and wonderful customer of U.S. goods.
This is Beijing bullhockey. Our merchandise trade deficit with China, $40 billion in 1996, will hit $44 billion this year. China buys 1 percent to 2 percent of our exports, while we buy 30 percent to 40 percent of hers. The only reason China soaks up billions in investment capital yearly is because we give her privileged access to our huge, lucrative market, as China imposes taxes on U.S. goods near Smoot-Hawley rates. If the United States imposed on China’s goods the same taxes she puts on goods made in the U.S.A., China’s economy would be headed for the ER.
Flying home from Argentina, Clinton worked the phones to congressmen, asking for “fast-track” authority to negotiate new trade deals. Under fast track, Congress gives up its right to amend any treaty Bill Clinton brings home. While Democrats are resisting, Republicans — battened on soft money and addicted to the cocaine of “free trade” — are anxious to give Clinton his blank check.
Clinton has also begun to use the tested tactic he used to win the North American Free Trade Agreement battle of 1993: buying congressional votes with pork-barrel projects. But between ’93 and ’97, there is a difference. The NAFTA deal to which Congress signed on in ’93 has failed — with the U.S. trade deficit with Canada and Mexico exploding from $12 billion in ’94 to $33 billion in ’96.
There is another reason Congress must not surrender its rights. Being secretly negotiated in Paris today, for delivery in May, is a monster called MAI, the Multilateral Agreement on Investment, the orgasmic dream of Citicorp and Goldman Sachs, a sovereignty-smashing treaty that empowers global investors and transnational corporations at the expense of nation-states.
If, when MAI arrives, Congress has surrendered its right to amend it, the Republican Congress will be a long time explaining why it is worth keeping in November.