Issue 84: World trade, worried trade

Autarky, or national economic self-sufficiency, is a dead concept. Even so inward-looking a country as the Soviet Union is compelled to take an active part in world trade, and the Western industrial democracies all owe their relative prosperity to international trade.

Yet the spirit of autarky lives in America. Workers and industries perceive threats to their livelihood in foreign goods and have made their feelings clear to politicians who, in turn, have responded with oratory and proposed legislation to protect their constituents. Nor do broad political base or ideology make much difference: says Newsweek columnist Robert J. Samuelson, "Despite free-trade rhetoric, President Reagan has run the most protectionist administration since World War II."

Granted that the U.S. trade deficit last year grew to a daunting $148 billion, restrictions on foreign competition are unlikely to right the unfavorable trade balance or save net jobs. The United States exports as well as imports, and both are vital to the economy.

In this issue of Resources, we examine four critical commodity groups, beginning with food and fiber. With 40 percent of U.S. cropland now growing for the export market, U.S. agriculture depends on foreign sales, which have plunged 37 percent from their 1981 peak of nearly $44 billion. Fred H. Sanderson sees some hope for expanded U.S. exports despite a brewing agricultural trade war with the European Community.

Given the incendiary situation in South Africa, what are the prospects for continued U.S. imports of strategic minerals from that country? Interruptions in supply are possible and even probable, but Hans H. Landsberg and I believe that the long-run self-interest of any South African government will lead it to export its minerals to willing buyers.

The United States is the world's largest producer, exporter, and importer of industrial wood. I. J. Bourke details the tariff and non-tariff barriers to world trade in forest products, and Roger A. Sedjo addresses the special case of Japanese barriers to U.S. imports.

Oil prices may be down and OPEC in disarray, but who would bet that 1970s-style oil shocks will be impossible during the 1990s? Douglas R. Bohi and Michael A. Toman think it only prudent to plan for the next oil crisis, and they offer a strategy for the International Energy Agency.

Most of our authors are cautiously optimistic about world trade and the U.S. part in it. But worry persists, and not only because of protectionist sentiment in Congress. In our lead article, Stephen N. Marris foresees a hard landing for the dollar and the U.S. economy as the trade and budget deficits prove too much to handle. Still, Marris does not close the door entirely on optimism.

— Kent A. Price