Ever since former vice president Walter Mondale started to proclaim the need to "get tough" with Japan and Europe on trade, he's had to defend himself against the charge he's abandoned his former liberal, free-trade views in favor of protectionism.
He vigorously denies that he's "a zero-sum, beggar thy neighbor protectionist. I've never been that. . . . . My whole policy here is to try to get America in a position where she can reassert her economic strength in (an) international competitive environment that's fair," he said on NBC's "Meet the Press" last Sunday.
If that said it all, Mondale's position would be beyond reproach. But it doesn't square with the specific things he's been recommending to deal with the problems of America's old-line industries -- notably steel, auto, textile -- which have been losing out to Japanese and other foreign competitors.
Here is a summary of the trade policy he's been advocating in speeches, letters to editors and on television in the last few days:
"Reciprocity." A main Mondale theme relates to Japan's denial of U.S. access to its markets. Therefore, he argues, the United States is justified in limiting Japanese access to this market: "We don't have to stand for markets closed to us while they have markets open to them in the United States."
But the unilateral "reciprocity" approach is a drift into the discredited tactics of the years preceding World War II. The real remedy for Japanese protectionist tactics lies in international, not in one-nation, responses, which focus only on bilateral merchandise deficits.
Mondale never mentions that the United States has a worldwide surplus in services and returns on foreign investment that is much larger than its worldwide deficit in trade. And the United States enjoys a huge trade surplus with Europe. What "reciprocity" should we expect from others if we follow Mondale's course?
Local-Content Legislation. Mondale flatly endorses this UAW-sponsored proposal, which would require car companies to incorporate a high percentage of American labor and materials in cars sold here.
"Local content" is a blunderbuss form of protectionism, certain to reduce imports, raise prices, lower quality, and invite retaliation. Says Mondale: "I have for many years resisted local-content legislation, but I've come to the point where I don't know what other defense there is."
Import Quotas. In a response to a Washington Post editorial, he wrote: "Additional selective restrictions on imports in these (basic industry) areas may well be necessary as part of an overall strategic program to restore the strength of those industries." But quotas only raise prices to consumers, and allow American factories to perpetuate inefficient operations. The existing "voluntary" quota on Japanese cars has been a notorious failure in terms of helping Detroit.
Limits on Capital Investment Abroad. Mondale says that to "rebuild the country that we all belong to" we must keep at home some of the money being invested abroad by American corporations, commercial banks, and pension funds. (He applies the same yardstick to American contributions to international lending institutions.) He fails to see the contradiction between controlling the outflow of American capital and his demand that Japanese companies invest money in auto plants here.
Mondale is right in diagnosing many issues. He's right that Reaganomics has exacerbated the problem by pushings the dollar too high. He's right that American corporations have dissipated resources through questionable mergers. He's right when he raises the issue of unfair export subsidies by other governments, mostly in Europe.
But Mondale comes up with some poor answers. He doesn't acknowledge what virtually every impartial expert in Japanese-American affairs knows: even if every unfair Nipponese trade practice -- and there are many -- were corrected, this country would still face an enormous trade deficit with Japan until it becomes fully competitive in price and quality.
An American response to the export-goods war it's losing to Japan can't be so narrowly focused as Mondale suggests -- on quotas, local-content rules, a preoccupation with dumping and other protectionist devices. Mondale is too wrapped up in a defense of traditional U.S. industries. He would be better advised if, in his drive for the presidential nomination, he abandoned a preoccupation with yesterday's America, and looked ahead.