In Europe the impediments include efforts to hold on to obsolescent
or inefficient industries, wages that are unresponsive to the market
and social policies that impede growth. These help account for Eu-
rope’s inability to adjust quickly to changing economic conditions
and for a persistently high unemployment rate now averaging more
than 11 percent in the EC. In contrast, the U.S. rate is less than 7
percent and the U.S. economy has created 11 million new jobs since
1982.
Regarding Japan, which ranks as the biggest market for U.S.
agriculture, Allen Wallis, under secretary of state for economic and
agricultural affairs, has said:
Japan’s success as an exporter has created the appearance of a
miraculously efficient economy. Notwithstanding that popular
view, much of Japan’s economy is still quite backward. The
complications of the distribution system are legendary and its
intricate web of obstacles to imports is a serious obstacle to its
own full prosperity.
With small plots and many part-time farmers, Japan’s agricul-
tural sector is one of the least efficient and most heavily subsi-
dized of any major industrialized country. This support,
combined with the tax treatment of capital gains, limits the
land available for residential purposes and generates a ripple
effect throughout the Japanese economy. It contributes to weak-
ness in the consumer goods market and in imports. It particu-
larly limits agricultural imports, though in spite of that Japan
is the largest buyer of U.S. agricultural products (Wallis).
Wallis added that structural adjustment is now a key element of
U.S. economic policy in relation to Japan and “complements our
other efforts to secure greater internationalization, deregulation,
freedom and openness throughout the Japanese economy. We hope to
see Japan becoming an importing superpower, not just an exporting
superpower.”
U.S.-Canadian Talks
I would like to turn your attention to the U.S.-Canadian trade
talks. Both our countries are working hard for a US--Canadian
agreement that would open up trade along our mutual border—the
longest border anywhere in the world that is open, unguarded and
friendly. A lot of trade already crosses that border—and it is in the
interest of both countries to expand that trade further.
Negotiations—even agreements—between the United States and
Canada on free trade date back more than one hundred years. The
first move in this direction came in 1854 when our two countries
signed an agreement that permitted each to fish in the other’s waters
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