WORLD

From Berlin
A

Gerry van Houten

Huge U.S. deficit

BERLIN — A world trade war is looming on the horizon in the
new year.

In mid-December, the U.S. imposed import quotas on machine
tools from the Federal Republic of Germany and Switzerland. To
avoid similar action, Japan, and Taiwan ‘‘voluntarily’’ accepted
similar quotas.

On New Year’s Eve, the Reagan administration announced its
intention of increasing tariffs on a wide range of food products
from the European Economic Community by 200 per cent. White
wines, cheese, olives, endive, carrots and whiskey are among the
EEC products affected. In what amounts to blackmail, the U.S.
has set the end of January as its deadline: either accept the
U.S.-dictated terms or face the 200 per cent tariff hike.

Referring to the machine tools quota, FRG Economics Min-
ister Martin Bangeman retorted that ‘‘on the German side, we
have refused in all discussions to recognize upper limits on mar-
ket share as binding. I can also not accept such binding levels for
the future.”’

French Foreign Trade Minister Michel Noir called the threat of
a 200 per cent tariff increase “‘the Rambo method”’, and warned
that France would retaliate ‘“‘an eye for an eye, a tooth for a
tooth.’’ FRG Agriculture Minister Ignaz Kiechle remarked that
“‘the EEC simply cannot stand by without reacting.”’

The immediate reasons for the U.S. action are clear: the U.S.
trade deficit in November was the worst in its history. In only one
month, the U.S. trade deficit jumped from $12. 1-billion to $19.2-
billion — a 59 per cent increase.

Most of the deficit is accounted for by Japan, the EEC, Canada
and Taiwan. But even the U.S. deficit with developing countries
| increased by 40 per cent from October to November.
~The FRG, ren ‘Switzerland and Taiwan together have cap-

‘tured 43 per cent of the U.S. machine tool market. The U.S.
government, long an ardent proponent of allowing free market
forces to operate unhindered, even has to protect this industry
from competitors in Spain, Singapore and Brazil.

According to the International Herald Tribune, in the past the
uncompetitiveness of U.S. industry in the world market could
have been attributed to lower wages abroad or the high exchange
rate of the U.S. dollar. But this is no longer the whole story.
““Today the explanation seems to be simply that much of the U.S.
machine tool industry is obsolescent and cannot find the money
or the inspiration to recover,”’ writes that paper.

And the money is lacking because it has gone to finance the
arms race.

Although an arms control agree with the USSR would release

‘money for the renewal of the U.S. civilian economy, Washington
has chosen instead to follow a policy of protectionism and forcing
its allies to devote more money to the military at the expense of
the civilian econnomy. Both threaten the economic and political
stability of the U.S. trading partners and allies.

If the U.S. goes ahead with its planned 200 per cent tariff rate
hike on EEC agricultural goods, it may be extremely difficult, if
not impossible, to prevent a trade war from breaking out.

The EEC is in a very serious predicament. It has in excess 1.5
million tons of butter, half as much in beef, 17 million tons of grain
and 1.1 million litres of wine. To keep this surplus food in storage
costs so much there is even talk now that the EEC may be pushed
into bankruptcy. On the other hand, to reduce food stocks by
cutting back subsidies is almost the same as committing political
suicide in Europe where the farm lobby is very strong.

To get rid ofits food surpluses; the EEC has been compelled to
reduce prices. In a situation which is almost akin to dumping, the
EEC has been selling its food in the U.S. market and has under-
mined the profitability of U.S. agriculture.

In addition, the Reagan administration is angered by the fact
that when Spain and Portugal joined the EEC as of January, the
U.S. lost an important European grain market. To enter the EEC,
both Spain and Portugal agreed to buy EEC grain, in short, to
stop purchasing U.S. grain. This was good for the EEC, espe-
cially French grain producers, but bad for the U.S.

Ina sense, the U.S. is treating Spain in the same way it treated
New Zealand for the ‘‘crime’’ of making a sovereign decision in
the interests of their country and world peace.

Washington is particularly angry with Spain because not only
did the Gonzales government agree to buy EEC grain, but it also
rejected U.S. dictatorship in military matters. Spain has de-
manded withdraw] of one-half of the 14,000 U.S. troops stationed
there and closure of two of the four U.S. bases. The U.S. is also
unhappy with Madrid’s decision to prohibit nuclear weapons on
Spanish soil and to remain outside NATO’s military structure.

triggers trade war

Student demos ‘no cause
for alarm’ Says official

BEIJING — Student demonst-
rations which have occured in
several of China’s major cities
Since the beginning of December
were no cause for alarm, although
the government is paying great at-
tention to them, He Dongchang,
vice-minister of the State Educa-
tion Commission told a press con-
ference here.

He said the country’s overall
situation is ‘“‘excellent’’ and the
people do not want unrest. ‘‘So
the. possibilitiy of a major turmoil
does not exist’’.

He disclosed that a little more
than 1 per cent of China’s two
million university students had
been directly involved in last
month’s unrest in Beijing, Shan-
ghai, Wuhan, Hangzhou, Nanj-
ing, Guangzhou and Hefei.

Most of the demonstrators
were first and second year stu-
dents, the vice-minister said.

While the majority of the stu-
dents hoped to speed up the pre-
sent reforms, a small number
have been excessive in their acts
and opinions, he said, adding:
“‘this is quite understandable.”’
He drew a clear distinction be-
tween these students who, he

Students hope to speed up pres-
ent reforms. :

said, were patriotically showing
their enthusiasm for reforms and
a few non-students who had
committed offenses against the
constitution. He disclosed that
local public security authorities
had arrested several people who
broke the law.

He said that not one student
had been arrested for taking part
in demonstrations or putting up
posters, and admitted there was

need to strengthen ideological :
work in China’s colleges and uni-
versities. j

What these students are con-—
cerned about, he said, was
democracy and freedom, but
most did not raise concrete de-_
mands. It is the aim of the Com-
munist Party and the Chinese
government to build a socialist
country with a high degree of
democracy which will represent
the common interests and wishes
of the whole Chinese people, the
vice-minister said. ’

He added that the building of -
democracy in China should be
carried out under the leadership.

of the Communist Party and

through proper procedures, and
said the government had patience
with the students who were “‘in-
evitably inexperienced’. 4

The vice-minister said that the
Chinese-people needed time to get
accustomed to demonstrations”
because they were a rare event in|
China’s past except during the
“cultural revolution’’.

This information on recent events
in China is provided by the education
office of the embassy of the People’s”
Republic of China in Ottawa.

8 e PACIFIC TRIBUNE, JANUARY 14, 1987

World call issued for
reunification of Korea

HAVANA — Eight-four politi-
cal parties from North and South
America met here Dec. 11-13 in
support of the independent and
peaceful reunification of Korea.
They expressed concern over the
danger posed to international
peace and security by the con-
tinued division of the Korean
peninsula and its occupation by
40,000 U.S. troops, stationing of
nuclear weapons in the south and
the atmosphere of a permanent
war footing created by large-scale
military maneuvers.

In an effort to reduce tensions
and achieve the peaceful reuni-
fication of Korea, the participants
adopted a call to all parties,
governments and _ international
organizations containing these
proposals:

e To urge the holding of tri-
partite talks among the U.S.,
Democratic Peoples Republic of
Korea and South Korea that
could lead to the signing of a
peace treaty and the adoption of a
non-aggression declaration be-
tween North and South Korea;
that the U.S. withdraw its troops
from South Korea; that North and
South Korea completely elim-
inate military confrontation — all
of which would make possible for
the Korean peninsula to become a
nuclear weapons-free zone and a
zone of peace;

e To support the most rational
and realistic reunification pro-
posal: to reunify the country
through the establishment of the
Democratic Confederal Republic
of Koryo which will have full re-
spect for the ideology and regimes
of the North and the South;

e Toreject any efforts aimed at
creating “‘two Koreas’’ to per-
petuate the division of the Korean
nation;

e To reject U.S. and South
Korean maneuvers aimed at the
‘“‘simultaneous entry into the
United Nations,” which would
likewise perpetuate the division
of Korea;

e To urge that the 24th Sum-
mer Olympic Games (scheduled
for 1988) be shared by North and
South Korea;

e To strengthen international
solidarity with the South Korean
people’s struggle for indepen-
dence from U.S. domination and
the efforts of the youth, students
and South Korean National
Democratic Front in their fight
against dictatorship and war

under the banners of indepen-
dence and democracy, peace and
peaceful reunification;

e To promote information and
solidarity campaigns in support of
these aims.

The participants agreed that the
Reagan administration’s inclu-
sion of the Korean peninsula in its.
‘vital interests’ zone furthers its
aggressive policy in Asia and
serves as a cover for the alarming
military build-up there. Attending
the meeting as representatives of
the Communist Party of Canada
were Central Executive Commit-
tee members Val Bjarnason and
Bruce Magnuson.

GDR answers Kohl’s _|
election eve tirade |

The GDR Foreign Minister has issued a terse reply to West |

German Chancellor Helmut Kohl who charged Jan. 4 that the
GDR ‘“‘is holding 2,000 of our fellow countrymen in its jails and
concentration camps. ..’’ Kohl was speaking at a rally i in Dort-
mund of his right-wing. Christian Democratic Party in the final
stages of the FRG’s Jan. 25 general election.

The GDR reply said:

1. No FRG citizens are in GDR jails on political grounds.

2. GDR citizens are not Kohl’s countrymen.

3. There are no concentration camps in the GDR:

4. The only political prisoners in GDR jails are those sentenced
for war and nazi crimes, the murdering of Jewish citizens and
crimes against humanity.

5. FRG citizens jailed in the GDR for spying for West German
secret services are not considered political prisoners but, like in
any civilized country, are considered criminals.

In the FRG, the Social Democrats, Greens and Free Demo-
crats immediately distanced themselves from Kohl’s remark, and
SDP candidate for chancellor, Johannes Rau, charged Kohl was

relations.
—GVH

reaching out to the far right vote at the expense of east-west |