The Sphinx in winter 

Posted on March 1, 2004 by Eamonn Fingleton

America’s burgeoning trade deficits threaten Greenspan’s legacy. (This article was first published in the March 1 , 2004 issue of the American Conservative.)

For those who watch the American economy, the Internet boasts few more useful resources than the web site of the Federal Reserve. In a few clicks you can mine data on everything from the level of interest rates on Black Monday to the growth of steel production under Eisenhower. Whether the topic is the trend in semiconductor prices, the impact of weather on retailing, or the most efficacious way for corporations to break bad financial news, someone at the Fed has studied it and has posted his findings.

Strangely, though, one crucial economic concern gets short shrift: international trade. Not only are there no trade statistics, but America’s perennially rising trade deficits have received virtually no attention from the Fed’s monograph writers in recent years.

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The silence of the laureates

Posted on August 13, 2001 by Eamonn Fingleton

Surprise, surprise — America’s  economics laureates are uneasy about the U.S. trade deficits. (As first published in the American Prospect on August 13, 2001.)

Are America’s trade deficits too high? Judging by the American intellectual establishment’s body language, the answer is no. The press continues largely to ignore the deficits, and so does just about everyone in Washington, D.C. The country’s economists have set this tone of complacency. Their view has long been based on the assumption that markets can do no wrong—that no matter how bad the trade numbers get, it’s simply an expression of the market’s wisdom. But now, we may be witnessing the first stirrings of a change of heart.

I tracked down the 10 U.S. economists who most recently won a Nobel Prize and put the same simple question to each of them: Was last year’s current-account deficit—which includes not just goods and services but also financial flows—too high? That deficit, I reminded them, represented a record 4.5 percent of gross domestic product. (Up until 1983, it had never exceeded 1 percent.)

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The anomalous position of Christopher LaFleur

Posted on April 25, 2001 by Eamonn Fingleton

When the history of American trade policy is written, people will ask what the U.S. State Department was doing. An insight into the answer can be gleaned in the career of Christopher LaFleur. At a crucial time for US-Japan trade relations, he has served in Tokyo not only as the effective head of the American embassy but, also reportedly, as the local chief of the Central Intelligence Agency.

TOKYO. For decades Americans have been told that the Japanese establishment is working as fast as it can to open the country’s markets to American exports. As far back as the 1970s, such apparently authoritative publications as the Economist magazine and the Wall Street Journal declared Japan to be already “one of the most open markets in the world.” Since then the U.S. government has negotiated dozens of “market opening” deals with Japan, each of them hailed (at the outset at least) as a famous victory for the American side. Yet the truth is that, as the $70 billion U.S.-Japan annual trade imbalance testifies, few American exporters even today have established anything more than a token foothold in Japan. Certainly, as a proportion of Japan’s total imports (meager as these are for an economy with a $4 trillion GDP), American goods represent an ever dwindling proportion.

A question arises: why on earth has America’s Japan trade diplomacy been such a failure? The plot thickens when you remember that Japan has constantly been portrayed as enthusiastically Americanizing its societal and economic arrangements.

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Political advantage: A classic article by Pat Choate

Posted on April 4, 2001 by Eamonn Fingleton

This classic article on the Japanese trade lobby by Pat Choate, which was first published in the September-October 1990 issue of the Harvard Business Review, is presented here with the permission of the author.

Political Advantage: Japan’s Campaign for America

By Pat Choate

Imagine a foreign country running an ongoing political campaign in the United States, as though it were running a third major political party.

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