Japan Urges U.S. to Narrow Its Budget Gap --- Trade Report Also Expresses Concerns Over New Shift Toward Regional Groups
TOKYO -- Japan's Ministry of International Trade and Industry urged the U.S. to slash its budget deficit so global savings can be redirected toward developing countries and the war-torn Middle East.</br></br>In its annual "white paper" on international trade, MITI also raised concerns about the trend toward regional trading groups, warning that "economic integration may end up significantly reducing the world economy and world trade if the wrong method is employed."</br></br>The annual report serves to articulate the ministry's views on the world economic situation, providing a reference point for Japanese policy makers and industrialists.</br></br>While Japanese officials have been calling on the U.S. to cut its budget deficits for the past decade, the white paper warns that the task has taken on new urgency because more funds are needed to rebuild the former East Germany, to help the Soviet Union and Eastern Europe move toward market economies, and to repair the Gulf region's infrastructure.</br></br>The U.S. budget deficit of $220.4 billion in fiscal 1990 "is equivalent to about 5% of the gross savings of the entire world," the paper said. By tapping global capital markets to fund that deficit, the U.S. creates "pressure to raise interest rates."