MICHAEL Delaney, diplomat in residence at the East-West Center, makes opaque economic issues transparent enough that even myopic newspapermen can see through them. His specialty is trade and his resume includes serving with the U.S. Trade Representative on the Uruguay Round of GATT. Asian crisis’ impact on U.S.
This particular newspaperman can't quite remember what GATT stands for without looking it up (it's the General Agreement on Tariff and Trade). Still, I can grasp Delaney's diagnosis of the impact of Asia's economic crisis on our country where, he says, one in five jobs today depends on foreign trade.
Before its banks teetered and currencies tumbled, Asia accounted for 34 percent of all U.S. trade, $231 billion a year. Now, it's dipped to $193 billion. We're selling less, buying more -- 10 percent more -- from Asia than a year ago. With $20 billion worth of Asian goods a month flowing in, our trade deficit has doubled to $16 billion a month. We actually export more to Mexico than Japan.
So far we're toughing it out, raising no trade barriers. With luck our strong economy might pull us all through. Meanwhile, Delaney says, expect corporate earnings and the GDP (Gross Domestic Product) to drop along with prices of stocks, commodities and both luxury and commercial real estate.
''It's not as bad as it could be, and it's not as bad as it's going to get,'' he says. Enjoy the ride.
John Flanagan is editor and publisher of the Star-Bulletin.
To reach him call 525-8612, fax to 523-8509, send
e-mail to publisher@starbulletin.com or write to
P.O. Box 3080, Honolulu, Hawaii 96802.