Newspaper article The Christian Science Monitor

US on Fast Track to Competitiveness

Newspaper article The Christian Science Monitor

US on Fast Track to Competitiveness

Article excerpt

BY the mid-1990s, some United States companies will bring back the manufacture of consumer electronics goods to this country.

That may be hard to believe. But this is what Edward Miller, president of the National Center for Manufacturing Sciences (NCMS) in Ann Arbor, Mich., predicts. Indeed, he sees this nation on a fast track to world-class manufacturing standards.

"It is not an easy task," he concedes. "But the US has taken very dramatic strides in upgrading its competitiveness."

At the moment, almost all the TVs, VCRs, videocameras, and other consumer electronic items that Americans buy are made in Japan, South Korea, Taiwan, or other foreign nations.

Those products plus automobiles are major factors in Japan's 1991 trade surplus with the US of around $100 billion and a current account surplus (which includes investment flows, tourism, and insurance as well as trade) of more than $80 billion. When President Bush and an entourage of American businessmen arrive in Japan next Tuesday, they will push for trade concessions aimed at trimming that export surplus.

But the efforts of Mr. Miller's Center to boost American competitiveness in manufacturing could well be more important in the long run for the US trade balance. This year NCMS, an organization with a membership of more than 150 top US manufacturers, will be farming out between $150 million and $200 million in research and development in manufacturing technologies, up from $90 billion in 1991.

C. Fred Bergsten, director of the Institute for International Economics, holds that Mr. Bush can do a great deal immediately for US competitiveness by getting Japan to revalue the yen. At present, 125 yen buys $1. Mr. Bergsten would like the finance ministers of the Group of Seven industrial democracies to get together, as they did in New York's Plaza Hotel in 1985, and decide to raise the value of the yen to 100 to $1. That would likely involve major intervention in the foreign exchange markets. Bergsten figures such a yen upgrading would make US products 10 to 15 percent more price competitive against Japanese products. This, he adds, would create far more new jobs in the US than minor Japanese trade concessions. …

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