Four trade ministers ended aweekend meeting with a frank confession that their governments
are losing credibility in world financial markets and will not
regain it until they back their promises over trade and
currencies with action.
    "Until today we have anounced policies, but when it came to
action required it was done in a way that satisfied nobody,"
Japanese Trade Minister Hajime Tamura told a news conference.
    "From now on, if a government comes up with a certain
policy, it must be followed by action," he said following two
days of informal talks with the trade ministers of the United
States, the European Community and Canada in central Japan.
    Last week, the dollar fell to a new record low below 140
yen, despite statements from the Group of Seven (G-7) leading
industrial powers that currencies should be stabilised to
underpin world trade.
    "We need credibility to gain confidence. When we have
confidence, then we can have an impact," said Tamura.
    His colleagues agreed that when major trade nations fought
over trade issues while calling for each other to honour free
trade rules in general, it was not a sight which inspired
confidence in the markets.
    "The time has come now to act in step with the talk. If you
belong to a club, you have to act in concord with the rules, if
you want to be credible," said EC external trade chief Willy de
Clercq.
    Pat Carney of Canada said "We are meeting in a time of great
trade tension. What the world needs to see is that we have the
political will to deal with these problems we face."
    She said that next month's meeting of the Organisation of
Economic Cooperation and Development and the meeting of leaders
of the G-7 nations in Venice in the summer would be a forum to
show this will existed.
    U.S. Trade Representative Clayton Yeutter reminded the news
conference that the results of such high level meetings could
lead to action which would only have an effect on smoothing out
world trade imbalances perhaps years later.
    "The media typically has a tendency to evaluate meetings
like this in terms of tangible results. That is not the way it
should be pursued," he said.
    "What is achieved in an intangible way almost always exceeds
what is achieved in a tangible way," he said.
    Progress in personal contacts and understanding each
others' positions and policies was just as important toward
reducing trade tensions, he said.
    Tamura read out an agreed summary of the joint talks:
    Currency stability was now essential, but currency
movements alone would not correct a U.S. trade deficit with
Japan which hit 58 billion dlrs last year, an 18 billion dlr EC
deficit with Japan in 1986, and a Japanese global trade surplus
of almost 90 billion, he said.
    Trade retaliation, protectionism, and forcible export
restraints which lead to a shrinkage in world trade flows were
most dangerous, he said.
    The imbalances can only be solved by coordinated policies
over a whole range of fiscal, monetary, trade and industrial
measures, and in line with a body of internationally agreed
rules, he said.
    In this regard, the policing role of the Geneva-based
General Agreement on Tariffs and Trade world trade body must be
strengthened, he said.
    The ministers reconfirmed their individual promises to
solve the problem. The United States will try to reduce its
large budget deficit and restore competitiveness within its
industries.
    Japan will introduce early and effective measures to expand
its domestic growth and rely less on exports.
    The EC must continue efforts for balanced growth and
reduced unemployment. All felt satisfied at the new progress in
the Canadian economy.
 Reuter
