Talk of trade liberalisation strikes fear

By Brian Fallow

People see layoffs, not payoffs, when it comes to trade, says US Secretary of Commerce William Daley.

"Polls show that 60 per cent of American people fear for their jobs when they talk about trade," he said.

He told the Apec chief executives' summit that there had been a breakdown in political support for free trade.

The US had done its job in helping the world economy recover from the 1997-98 financial crisis, by growing strongly and pulling in imports.

But now the rest of the world had to share the load by spurring demand.

"This, more than anything, would prevent a public backlash in America against trade liberalisation," Mr Daley said.

"Japan has not seen sustained, healthy growth for many years. Although Prime Minister [Keizo] Obuchi's Government has taken extensive efforts to stimulate growth and stabilise the financial system, they haven't been enough."

He said more deregulation was needed and Japan must open its markets to more imports and foreign investment.

Japan's Minister for International Trade and Industry, Kaoru Yosano, who spoke after Mr Daley, said that sustained growth required structural reform and not just short-term financial and fiscal policies.

But Mr Yosano's concept of structural reform may differ from Mr Daley's because he said: "We intend to emphasise policies to build the infrastructure for new development, including strengthened assistance for small and medium enterprises and venture startups, and Government-business cooperation in research and development projects in such future-oriented areas as information technology, health care for aged people and environmental protection."

Mr Yosano said the Japanese economy was starting to get back on its feet with help from public works spending, housing investment and other policy initiatives.

Just released gross domestic product data for June in Japan showed a robust lift in private consumption for the second quarter in a row. Imports were up 0.7 per cent, a drop from the March quarter's 2.8 per cent growth, but an improvement on import declines all through last year.