Fortress USA - Capitol Ideas - United States; international trade and commerce - Brief Article

Chief Executive, The, April, 2002 by David E. Sanger

In the mid-1990s, visitors to the Commerce Department were often ushered into the frenetic "war room," established as a command post for American business at a time of intense international economic struggle.

From scores of computers, officials tracked the 100 largest commercial projects around the world--power plants, communications satellites, telecommunications networks--and assessed the competitive landscape for American bidders. Ambassadors were dispatched to persuade other nations to buy American. The CIA weighed in with intelligence on efforts by foreign governments and firms to grab the business by rigging their bids or bribing local officials. Bill Clinton once famously called the Saudis to help close a deal on Boeing aircraft and he regularly urged the Chinese to open their markets to American insurers or brokerage houses.

On the maps hanging in the war room, Asia loomed largest. By 1994, the region was all about opportunities for American businesses, farmers and entrepreneurs. The Treasury took over management of most China and Japan policy, and for the first time since the Vietnam War, the State Department and the Pentagon took a back seat.

It's remarkable how quickly that era has faded. The Commerce Department still makes the case for American companies, but the influence of Washington's economic bureaucracy has declined. The State Department has wrested back control of America's relationships with major Asian allies; these days when briefings are called on Indonesia, they are likely to be held at the Pentagon, not at the National Economic Council.

The shift's magnitude was clear when President Bush traveled through Asia in February. He talked about trade and economic revival, of course, but his observations about the coming "Asian century" seemed halfhearted. To the Bush White House, Asia is more likely a source of trouble than profit. Malaysia, Indonesia and the Philippines--the great "emerging markets" of the '90s--are viewed as Al Qaeda hideouts, current or future. In the l990s the big question about North Korea was whether it could be lured out of isolation with the prospect of joining the South in the pursuit of riches. Washington has since moved toward classic containment, making it clear that the North will have to change to suit U.S. terms.

Bush is compensating for what he viewed as Clinton's Pollyannaish approach to Asia. Security now rightly trumps economic initiatives. But if the Clinton team was so smitten by globalization's opportunities that it focused insufficient resources on security threats, the Bush team is in danger of making the opposite mistake.

Rarely has American economic growth been so dependent on an ability to sell to the world, but rarely has the world been so convinced that the U.S. is trying to rig globalization's rules for the benefit of its own profits. America's increasing fortress mentality isn't easing their fears.

That's the long-term danger in how Bush handled the steel crisis last month, when he imposed three-year tariffs of up to 30 percent on most types of steel imported from Europe. Asia and South America. Steelworkers and their employers are right to complain that foreign steel has surged" into the American market, notably during the Asian economic crisis in 1998, and kept the price low. But the surge ended in 1998, and since then steel imports have declined 27.5 percent. It's no wonder that the world believes Bush is protecting the market to pick up votes in West Virginia, Pennsylvania and Ohio, all critical to his efforts to win back the Senate and retain control of the House in November.

Our contention that America is a benign superpower, and that we keep our markets open to benefit workers worldwide, not just in the U.S., is sounding hollow. At a moment when Washington is cracking down on immigration and sending the FBI out to interview many foreigners living here, it is important to remind the world that even while new walls are erected to protect the homeland, America's markets remain as open as ever. The steel decision sends the opposite signal: Our economic policy shows tinges of an America First mentality, reinforcing the world's worst suspicions about our intentions.

David E. Sanger covers the White House for The New York Times. Previously he served as the Tokyo bureau chief.