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 WASHINGTON, March 18 /PRNewswire/ -- American thinking on trade and economic policy has shifted dramatically in recent months. Leading trade authorities indicated their preferences for a results oriented trade policy at an Economic Strategy Institute/Pacific Basin Economic Council-U.S. Committee trade policy conference just completed here.
 The conference, titled "Toward a New Trade Consensus," indicated that among America's leading trade policy experts both inside and outside government, there is growing concern over the growing trade deficit with Japan and over the impact on the U.S. economy of new trade agreements such as the North American Free Trade Agreement and the Uruguay Round of the General Agreement on Tariffs and Trade.
 Most conference participants -- who included senior administration officials, senators and congressmen, major business leaders and prominent academics from all points on the trade policy spectrum -- were receptive to regional and bilateral trade initiatives, to policies that reflect the diversity of America's trading partners, to a greater emphasis on specific sectors in trade negotiations. In particular, nearly all of the Japan trade experts spoke in favor of some kind of market share target in opening the Japanese market.
 "Most of the trade policy community now seems firmly in favor of basing American policy on pragmatic trade philosophy," said ESI President Clyde V. Prestowitz Jr. "This new pragmatism should greatly aid the new administration in dealing successfully with the many trade challenges on its plate right now."
 Laura D. Tyson, chairwoman of President Clinton's Council of Economic Advisers, spoke of the need to jettison the sharp dichotomy between free trade and protectionism last night. "That's usually not the choice we're presented with." In high tech industries in particular, Tyson noted, "the heavy hand of government" is almost always present. Tyson's comments were echoed by political analyst Kevin Phillips who said that the terms both free trade and protectionism are obsolete.
 The ESI/PBEC-U.S. conference, held as the president's economic team faces a series of momentous trade policy decisions, focused on four major issues: developing specific goals for U.S. trade negotiators as well as specific criteria for success, Japan, the Uruguay Round, and the North American Free Trade Agreement. Other panels dealt with trade and the environment, U.S.-China trade relations, and business opportunities in the Pacific Basin.
 The "new pragmatism" seemed most pronounced vis-a-vis Japan and the Uruguay Round. A panel of experts representing both the "traditionalist" and "revisionist" schools of Japan policy-making displayed unprecedented willingness to adopt a results-oriented approach to the Japanese situation.
 Most agreed that Japan's distinctive economic system required tailored responses, and even staunch traditionalists acknowledged that managed trade agreements might sometimes be needed to open the Japanese market.
 "We made considerable progress in taking some of the bitterness and name-calling out of the Japan debate," Prestowitz said. "The degree of consensus on the panel was as surprising as it was gratifying."
 The Uruguay Round panel produced similar results. Virtually all participants agreed that the current Dunkel Draft agreement did not merit American approval. Panelists in particular singled out the draft's shortcomings in the market access area. In addition, most panelists agreed that the Uruguay Round agenda ignored many of the world's most pressing trade problems, particularly the proliferation of subsidies and other national competitiveness policies that distort trade flows.
 Strong support was also expressed for preserving some American capacity for responding unilaterally to foreign anti-competitive practices, and for supplementing multilateral trade liberalization efforts with regional and bilateral initiatives. Most panelists agreed that the next multilateral trade round should focus on producing better worldwide rules governing national competitiveness policies.
 Less consensus emerged from the panel on developing trade policy objectives. Although most participants agreed that U.S. trade negotiators should pay special attention to securing agreements that reduce America's chronic global trade deficits, they differed on how to achieve this goal. Recommendations included yet again devaluing the dollar, stimulating sluggish global growth, expanding U.S. export subsidies and focusing on Japan -- which is responsible for most of the U.S. deficit.
 Still highly controversial was the idea of using trade policy to promote economically critical industries, although most reservations centered on the U.S. political system's ability to make sound judgments, not the notion that some industries create more economic benefits than others.
 The NAFTA panel was by far the most contentious. Participants disagreed sharply on the agreement's impact on American employment levels and trade balances, as well as on the wisdom of judging the treaty's merits on economic grounds alone. NAFTA supporters emphasized America's strategic stake in stabilizing Mexico. Critics argued that a treaty that helps Mexico at America's expense is unacceptable.
 Two major points that were derived from this morning's session included the fact that the People's Republic of China will continue to remain a major trade problem for the United States government and the debate over the environment against trade brings into question the notion of free trade.
 -0- 3/18/93
 /CONTACT: Clyde Prestowitz or Gregory Stanko of the Economic Strategy Institute, 202-728-0993/

CO: Economic Strategy Institute ST: District of Columbia IN: SU: ECO

DC-IH -- DC026 -- 7688 03/18/93 17:56 EST
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Date:Mar 18, 1993

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