Asian Resentment At U.S. Textile Import Curbs

Press, Volume CX, Issue 32349, 15 July 1970, Page 20

Asian Resentment At U.S. Textile Import Curbs

(By DEREK DAVIES)

TOKYO.

President Nixon’s repute in Asia has never been lower, regardless of the Vietnam war and the Cambodian incursion. His recent decision to impose restrictions on imports of textiles is far more damaging to millions of Asians who have not taken sides over the Indo-China conflict. It is a sadly significant moment in Asian history.

President Nixon’s campaign as a Republican candidate for the Presidency was based on an excellent slogan: “Trade, Not Aid;’’ This made sense for the two-thirds of the world which is euphemistically described as “developing" but which could be more accurately labelled “poor.” Informed opinion in Asia in recent years has been increasingly critical of aid pro-g,-animes. Indeed, one of the rm un reasons for the socialist vid'ory in Ceylon’s general election last May was public reset itment toward a generous Work! Bank loan for that country's biggest dam-irriga-tion scheme. Besides, most aid has strings attached. Concerned commerd- an d diplomatic figures in the region say that a free-trading America, its market opened to the embryonic industries of the developing wm 'id, would be far better than America which paid off its wA rid responsibilities in annua? aid parcels.

But now A'ia. with the rest of the devi loping world, is being deniedjboth aid and trade. The ai<r programme voted through Congress earlier this year sank to an unprecedented low of SUSI64S million.

It is declared byttextUe industrialists throughout Asia there is no economic justification for .Nixon’s decision to back legislation in'POSing quotas on imports fro\n the region. The American market is huge, they point out, and less than 8 per cent of United States demand is supplied by imports; this level cannot be described as “disrupt! they say, nor can it justify the campaign by United States industrialists and textiles trade unions against thei imported products. Nevertheless, for internal political reasons, the instigator of the Kennedy Round of Talks aimed at free trade— America—is to slam protectionist doors against goods manufactured by the poor nations of the world. At the very least, it is bad public relations. The main confrontation has been between Tokoyo and Washington. When first faced with the demands for “restraint”—made by the Secretary of Commerce, Mr Maurice Stans, when he visited Asia in May 1969—the Japanese decided to made an issue of it

But Japan’s bargaining position was not as strong as was popularly believed elsewhere; certainly the Japanese Foreign Office tried unsuccessfully to persuade civil service colleagues in. the International Trade and Industry Ministry and the Japanese industrialists themselves—to make some meaningful concessions. After all, the Premier, Mr Eisaku Sato, needed to gain President Nixon’s approval for the return to Japan of United States-occupied Okinawa, minus American nuclear bases, if possible. When Mr Sato went to Washington late last year, it was widely assumed that the Japanese would have to make some reciprocal gesture for Okinawa—perhaps an easing of their own protectionist regulations, their rules limiting the inflow of foreign capital or an agreement to restrain certain categories of their exports to the United States. Apparently Mr Nixon exacted no such price for the return of a non-nuclear Okinawa, contenting himself with an assurance from Sato that Japan would renew the Security Treaty with the United States (thus giving Tokyo a nuclear umbrella and saving Japan from a hefty military expenditure in the process).

Unexpected Gain

The Japanese textile industry found its position strengthened unexpectedly. Accordingly, it dug its heels in. Its offer to accept restraints at the 1969 level of exports—but with a yearly growth allowance of 14-15 per cent—was communicated to

Washington last month; in fact, it amounted to a barely polite oriental “no” in response to Nixon’s demands. The outcome of the confrontation was awaited with great anxiety by other Asian textile-producing nations, particularly Hong Kong, South Korea, Singapore and Taiwan. For some unaccountable reason, it was' accepted that terms hammered out between Tokyo and Washington would form the basis of subsequent bilaterial agreements with other Asian producers. For instance, if Japan agreed to accept 1968 as the base year for a textile quota, with an annual growth rate of 5 per cent, that was what Hong Kong could expect. And industrialists in the British

colony admit that Hong Kong would have been perfectly happy to accept such a restraint. So would the other Asian producers, which have accepted cotton textiles quotas on a voluntary basis in the past, and would not object to having a reasonable limit set on their sales of wool pnd synthetic textiles. Few Protests But surprisingly few voices have been raised in protest against the principle that other Asian nations must stand or fall with Japan, which now is the world’s third largest economy (after the United States and the Soviet Unton). Although its economy to export-orientated, Japan holds enormous economic strength and is even a member of the club of rich nations—the Organisation for Economic Cooperation and Development. M to small wonder, then, that mill owners

elsewhere in Asia are unhappy that the fate of socalled developing countries should be lumped together with that of a highly developed nation. Other anomalies abound. There is much sympathy for America in its attitude toward Japan which, safely under the United States nuclear umbrella, has achieved an economic miracle by rigidly protecting its own industries and severely limiting foreign imports. For years the Japanese have promised “liberalisation” of their own rules, but have opened the protectionist door no more than a fraction. In many Asian countries, businessmen and government officials alike are bewildered by the Nixon Administration’s move. They say it seems doubly wrong that countries such as Taiwan and South Korea—which welcome United States imports and capital investment—and communities such as Hong Kong, a free port entirely devoid of tariff walls, should be judged in the same box as protectionist Japan. Perhaps the greatest anomaly lies in America itself. Inexpensive textiles from Hong Kong and elsewhere in Asia could help to keep the cost of living down: now, however, protection is to be extended to an outdated and—on its own admissioninefficient American textile indiistry. It is little wonder that Asians are scratching their heads and thinking the oftmentioned bogy of neo-too-lationism is haunting them already. Intrasia Press Agency.