CHAPTER 13 - Whither America?

Summary

In the past half-century or so, the United States has done a great deal for East Asia. By supplying ideas, money and markets, it has played a critical part in the transformation of that region from one of the poorest in the world to one of the most dynamic and prosperous. Freed from the threat of Soviet attack, the United States is now attempting something more. It is trying to give Asians the benefits of human rights and democracy. At the same time, it is trying to reduce its bilateral trade deficits with Asian countries by pressing them to open their markets. It hopes to achieve these goals peacefully. President Clinton says he wants an Asia-Pacific region that is ‘united, not divided’ (International Herald Tribune, 22 Nov 93). Yet he has put heavy pressure on a number of Asian governments, including both China and Japan. He supports the liberalisation of international trade, and succeeded in bringing the Uruguay Round to a successful conclusion. But he is using unilateral measures to force Asian countries to buy more from America. Are these policies calculated to bring about an Asia-Pacific that is ‘united, not divided’? Or are they more likely to bring the United States into confrontation with Asian countries, perhaps even into conflict?

The United States is reasserting its strength. A few years ago it looked as if America's power was beginning to decline. Like other great powers in the past, the United States had devoted so much of its resources and energies to defence that it had weakened its own economy and was in danger of losing its leadership of the world economy. In the mid-90s, that danger seems to have receded. America's productivity, which has always been higher than that of Germany or Japan, is now rising faster than theirs too. The American economy is growing at a rate of about three per cent a year. Unemployment has come down, as growth has created new jobs. Inflation is low; the Federal Reserve raised interest rates in time to prevent overheating. America's prosperity is highlighted by the stagnation of the Japanese economy.