WASHINGTON - If the biggest trade dispute going these days is a food fight between the United States and Europe over bananas and cheese, it must be a sign that globalization has, in fact, brought peace at last to the traditionally testy automotive sector.
Not really, says David Aaron, the U.S. Commerce Department's top international trade official.
'I'd like to work myself out of a job in this area but, I'm sorry, I don't see it,' Aaron said in a lengthy interview here.
Aaron, undersecretary for international trade and head of the department's International Trade Administration, made clear that a deteriorating relationship with China has become a top concern for U.S. trade officials.
'We are in the process of making one more, maybe one last, attempt' to bring China into the World Trade Organization, the international body created in 1995 to resolve international trade disputes, he said.
'If not, then I think we are going to have to look at alternatives to deal with our growing trade deficit (with China), and the fact that they are going backwards on trade.'
In the automotive sector, he said, the front-burner topics are trade in auto parts, worldwide overcapacity and the ongoing strain in U.S.-Japan relations.
Here's the official American view on these potential trouble spots:
Auto parts: Because of the trend toward modular assembly in manufacturing, trade discussions and disputes increasingly will be about parts rather than vehicles.
'One of the things I think we have to focus on very firmly is making sure that what is now called the auto parts sector, but which increasingly will become the modular sector of the industry, is free from barriers,' Aaron explained.
U.S.-Japan automobile trade: The 1995 agreement is not working very well, he said.
While acknowledging that the Japanese economy is in recession, Aaron insisted that Japan still could be taking active steps to open its market under terms of the 1995 auto trade pact, such as deregulating its auto parts market.
'They're selling a lot of cars here, and they are shipping an awful lot of parts to the transplants,' he said.
Aaron would not speculate on what the options will be when the current agreement expires in two years, but he said he sees no justification for just dropping it.
The Asian economic crisis: 'It's not the beginning of the end, but the end of the beginning,' he said, quoting Winston Churchill. Growth in the region should be positive for much of this year, Aaron said.
But he said he is concerned that too many Asian nations will be unable to resist the temptation to try to 'have the entire automobile sector replicated in their country.'
Aaron suggested that Asia's developing nations cooperate among themselves to develop unique manufacturing specialties for each country, rather than duplicating one another's industries.
'It's quite clear that some countries will simply be passed by if they insist on having an entire automobile industry, like Malaysia,' he said.
'These countries think of themselves as export platforms. But that's not easy to do. And I think the Korean automobile industry has proved that.'
Aaron said he's optimistic about a new automotive-sector dialogue that is about to begin among the 18 member nations of the Asia Pacific Economic Cooperation forum, or APEC.
He said member governments and industries first will deal with issues related to standards, certification, safety and the environment and then try to tackle some of the economic questions they face.
U.S. automotive investment in China: Although beneficial to both countries, Aaron said, it has not prevented U.S.-China trade relations from getting worse.
'It's not a positive picture. It's a negative picture,' he said.
While declining to discuss specific alternatives, Aaron said the problems have become significant enough to demand some kind of bilateral action or agreement.
'I think our relationship with China is strong enough now that we can be frank with them,' he said.
'I think it's important that we be frank with them because, if we don't see improvement in the trade relationship ... that would be very unfortunate.'
General Motors, Aaron said, will sell $500 million in goods this year to China to support its new Buick plant in Shanghai, and 'that's not a trivial consequence.'
Reminded that China has resumed cracking down on dissent and sentencing people to prison for political, journalistic and commercial activity that in the United States would be legal, Aaron said some of those actions are 'inexcusable.'
But, he also said, it is wrong to portray China as 'the big world bogeyman' or 'the new bear in the woods.'
'I think they have a long way to go, but they are not thirsting for world domination the way the Soviet Union was. And we have a much more balanced relationship with China within the limits of dealing with a regime that clearly is not doing right,' Aaron said.
On other trade topics, he said President Clinton was in a 'consciousness-raising' mode when, in a speech in Detroit, he suggested that some controls might be needed on international currency flows, which now exceed $1 trillion a day.
Clinton said the ability of banks, businesses and speculators to move billions of dollars into or out of national markets and economies instantly has contributed to the economic problems of Russia, Asia and now Latin America.
On the other hand, international trade depends on the free and speedy movement of capital around the world.
'I think (Clinton) was in the mode of raising the issue and asking, `Is there some way to have the good and not the bad?'' Aaron said.
The issue, he said, is in the lap of Treasury Secretary Robert Rubin.