Trading U.S. Jobs for Overseas Military Bases

By Clyde Prestowitz

President Obama's recent appointment of an Interagency Trade Enforcement Committee to stop unfair trade and ensure a "level playing field" for U.S. industry and workers made me smile. In the mid-1980s, I was appointed director of the Reagan administration's Strike Force, a similar interagency group, that was to seek out unfair trade wherever it might be and smite it down.

The first target was then-heavy European subsidization of the development of the Airbus. The Airbus looked like a sitting duck. The whole development program was clearly in violation of a number of the rules of the General Agreement on Tariffs and Trade (GATT), the predecessor to today's World Trade Organization (WTO). Nevertheless, the Airbus was also the last target of the Strike Force. Why? Well, when the proposal to take action against the Airbus subsidies reached then Secretary of State George Shultz, he said any such move would "shatter NATO." This not only stopped the complaint against Airbus in its tracks. It also scuttled the Strike Force before it could claim any strikes.

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What was going on? Business as usual for the United States, for which geopolitics is the paramount national interest. For as long as I can remember, there has never been a military base, a U.N. vote, or a smooth state visit for which Washington was not prepared to make a trade concession or sacrifice a U.S. industry. (As a young Foreign Service officer on my first assignment in the Netherlands, I was told that my job was to promote Dutch exports to America.)

After the Strike Force incident, I was on another Reagan administration team tasked with dealing with unfair trade by Japan under the direction of then Vice President George H.W. Bush. It was agreed at the beginning of the mission that the vice president would make no celebratory trip to Japan unless the task force succeeded in halting the offending trade practices. In the end, there was no halt to such practices, but Bush made the trip anyhow after the National Security Council director for Asia emphasized that "we must have those bases. Now that's the bottom line."

What he was suggesting was that if Bush offended the Japanese by not coming to celebrate a non-agreement with them, use of Japanese military bases would somehow be denied to the U.S. forces then defending Japan. In fact, there was never any chance of losing access to the bases, but the National Security Council and the State Department cared more about keeping relations smooth with Japan than they did about the fate of U.S. exports and U.S. industries being hurt by Japanese trade practices.

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Clyde Prestowitz is founder and president of the Economic Strategy Institute in Washington, D.C.

This article originally appeared in the Havard Business Review and is republished with permission.


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