The Clinton administration, like those of other new presidents in the past, has initially placed an emphasis on domestic policy, particularly policy to correct economic problems. Thus, foreign policy issues have low priority, and other nations, particularly the industrialized ones, grow impatient waiting. Indeed, the federal budget deficit and the national debt are the most widely discussed issues in U.S. politics. But Europe has the same problem, and in several countries, the problem is much worse.
The Maastricht Treaty establishes as criteria that the budget deficits of European Community (EC) members be no greater than 3 percent of their gross domestic product (GDP) and their national debt no larger than 80 percent of the GDP. Only Denmark meets the first criterion, and over half fail to meet the second.
Great Britain, Germany, France, Spain, Portugal, (and the United States) are all in the 5-6.5 percent range of budget deficit to GDP, but Italy is at nearly 12 percent and Greece at 13 percent.
Belgium, which is at about 7 percent of deficit to GDP, has the dubious distinction of having the highest national debt to GDP relationship in western Europe--134 percent. Italy is at 108 percent, Ireland at 98 percent, and Holland at 82 percent, about the same as that of the United States. Britain, France, Germany, and Spain are between 40 and 50 percent.
The EC hopes to resolve its financial problems through economic integration of its members and cooperation with its trading partners, the most important being the United States. With trade at the top of the list, there are several issues that are of concern to the European economies, but to their dismay these have a low priority on Clinton's agenda.
The Uruguay Round of GATT talks began several years ago with the stated purpose of resolving trade issues between the United States and the EC. The Bush administration pushed unsuccessfully to complete the talks before leaving office. President Clinton appointed Mickey Kantor as the new U.S. trade negotiator. Although characterized a fast learner, he had little background in the subject and the EC was in no mood to break him in. His appointment was not greeted enthusiastically and consequently trade problems remain unresolved.
Europe, however, is not alone. Japan also has grown weary of being charged with unfair trade practices. Responding to a similar charge by President Clinton, the Japanese countercharged that the United States also was guilty of unfair trade practices. These exchanges take place at a time when Prime Minister Kiichi Miyazawa, involved in political turmoil over
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