The rapid growth of American foreign trade has transformed this country's economic life over the past decade. Exports and imports have almost doubled, in relation to the country's output, since 1970. As always, there have been winners and losers. The winners have been farmers, the coal miners and the high-technology industries like aircraft and computers. The losers have been, in generation, the industries with well-known, middle-range technologies that are now being widely disseminated throughout the world.
Expanding foreign trade has always created jobs for Americans faster than it has destroyed them. But the worker whose industry is threatened by imports is not necessarily ressured to hear that his job will be replaced by two others, in different kinds of work and in other parts of the country. To keep trade expanding over the next decade, with the prospect of slow economic growth for the whole industrial world, will be hard. The political friction is going to be ferocious, as governments get drawn increasingly into the world-wide struggles for markets, resources and investment.
The other day President Carter signed the executive order reorganizing the U.S. government's trade operations. The shuffle of offices and titles will mean little to most people. What counts is the new operation's success in a mission that is, unavoidably, ambiguous. Most members of Congress would probably say that they want a policy that will push exports, hold down imports, balance the trade account and create more jobs here. Since most other governments are trying to do precisely the same things, trade requires skillful diplomacy.
Mr. Carter's trade representive, Reubin Askew, has to deal with an American steel industry that is overbuilt and has lost most of its foreign customers to the new steel mills in the underdeveloped countries to which it used to sell. Should he encourage Toyota to manufacture cars here in the United States? (Answer: yes, he should.) And, by the way, how far is the United States prepared to go in giving the developing countries access to its market with products like shoes, textiles -- and steel?
In synthetic fibers, the United States is on the other end of the issue. American exports to Europe are booming -- and the European Common Market is suing. The synthetics are based on petroleum, and the Europeans claim that American oil price controls constitute an illegal subsidy. (They have a point.) Mr. Askew will now also preside over the negotiation of the codes to regulate and limit, among other things, government subsidies to exports.
Mr. Askew is in a terrible spot for a politician. The better he does his job, the less you are likely to hear about it. But American living standards aren't likely to rise if American trade doesn't keep expanding.