Bush Adviser Says That U.S. Punishment Of Trade Partners Could Cause Recession
WASHINGTON -- Michael Boskin, chairman of the president's Council of Economic Advisers, warned that U.S. efforts to retaliate against its trading partners could cause a "world-wide recession."</br></br>Mr. Boskin's strong comments, coming in the midst of an administration debate over trade policy, seemed to be aimed at other administration officials as well as at members of Congress and business groups pushing for tough trade action.</br></br>"While there are some unfair trading practices out there and those need to be rooted out," Mr. Boskin said, "they are not the cause of our trade deficit, other than a small part of it. And it is my view that if we wind up with a series of these retaliatory measures with our trade partners . . . it will not only cause a recession in the United States, it will cause a world-wide recession."</br></br>Trade Representative Carla Hills announced on Friday that the U.S. may retaliate against Japan for limiting U.S. access to its telecommunications market. In addition, taking the first step in a new trade process that eventually could lead to retaliatory action against a number of major U.S. trading partners, the trade representative released a review of foreign trade barriers.</br></br>Mr. Boskin has argued within the administration to tone down attacks against foreign trading practices. "I think we are starting to see an immense amount of bashing of our allies and trade partners," he said yesterday. "I think far and away the biggest danger to the economy is the incredible gathering momentum that could well produce a trade war," he said.