Economic Policy: Rise of Nationalism

Helping many nations back to financial health, the U.S. throughout the postwar era has been able to put across most of its economic policies to the rest of the free world. Lately it has run into a high tide of economic nationalism that challenges the U.S. on matters as diverse as tariffs, money, and airport landing rights. Notably in a couple of major countries, and to a growing degree in other nations, U.S. economic policies are being criticized or rejected.

The chief economic antagonist of the U.S. is, of course, Charles de Gaulle, whose goal is to make Europe look to France instead of to the U.S. Largely because of France’s intransigence, the Kennedy Round of tariff-cutting talks in Geneva is deadlocked, dormant, and hopelessly behind schedule. The Common Market delegation in Geneva cannot complete its list of proposed tariff cuts because France has boycotted major meetings of the Six since July 5.

Money Maneuvers. In a direct maneuver against the U.S., France last week tried to undercut Treasury Secretary Henry Fowler’s call for an international summit meeting to reform the world’s monetary system (TIME, July 16). Said French Finance Minister Valery Giscard d’Estaing: “The suggested procedure of calling an international conference on this subject does not appear opportune.” Though many experts interpreted this politely phrased jab as a flat rejection, the fact was that Giscard d’Estaing said much the same thing that Fowler had said—that considerable negotiating has to be done before a summit can be convened. The Frenchman put it in a negative and scary way to remind the world that France has the power to obstruct a meeting. Conclusion: France probably will not prevent a conference but will hold out for a lot of preconditions, and a meeting may be a long time in coming.

France is hardly alone in questioning U.S. economic primacy. The continental nations generally would like to see the role of the dollar reduced in international finance. Policymakers in West Germany, The Netherlands and Switzerland have proposed or supported measures that would reduce the ability of U.S. businessmen to buy into their industries. Even the Common Market’s Eurocrats, who oppose De Gaulle, believe that by building a united Europe they can create an effective counterbalance to U.S. economic power.

An Equal Partner. Not all of the troublesome economic currents are transatlantic. In Washington two weeks ago, a delegation of Japanese Cabinet members jolted U.S. Cabinet members by demanding, in effect, that the U.S. begin treating Japan as an equal partner in economic matters. The visitors stiffly turned down U.S. requests for a lowering of Japanese tariffs against U.S. goods and restrictions against U.S. investments. They also declined a U.S. invitation to contribute to a billion-dollar aid program for Southeast Asia, rejected the U.S. suggestion that they withhold long-term credits from Communist China.

Instead, they demanded that the U.S. renegotiate fishing rights and airline agreements, which the Japanese feel were unfairly forced on them after the war. Asked the Japanese ministers: Why shouldn’t their commercial airlines be permitted to fly to New York and on beyond, just as U.S. lines are permitted to fly to Tokyo and on beyond? The U.S. was hard put for an answer, agreed to begin negotiating the question in August.