Secretary of State George Shultz saidthe U.S. Would erase its large foreign trade deficit faster
than many predicted, and the consequences for its trade
partners might be traumatic.
    "The U.S. Economy will inevitably make the adjustment
necessary to move from a deficit to a surplus trade balance in
order to service our growing foreign debt," he told a conference
attended by the six members of the Association of Southeast
Asian Nations and their leading Western friends.
    "In my view, this will happen more rapidly than many
observers now predict."
    "The universal strategy of aggressive export-led growth is
becoming less effective," Shultz said.
    "It is not arithmetically possible for every country in the
world to be a net exporter at the same time. The U.S. Deficit,
which we all decry, has been in a sense the place into which
everyone's export-led strategy for growth has gone."
    "The huge surpluses of Japan and (West) Germany have fed on
this deficit, so something will have to give and it will be
possibly a traumatic experience," he added.
    "While you must keep up the pressure on us to eschew
protectionist policies, you must act too," Shultz said.
    "I can do a better job of convincing the Congress to leave
our door open to imports if more of our trading partners open
their doors wider," he told the group, which included
representatives from Australia, Canada, Japan, New Zealand and
the European Community.
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