Flying Blind Across the the Pacific : Geopolitics: Asia seethes with change, but Clinton reappoints the Carter Administration and shuns those with area expertise. : If President Clinton does not do these things soon, he risks seeing his own party go the way of Japan’s Liberal Democrats.

The aftershocks of the end of the Cold War roll relentlessly through Asia:

In Japan, the Liberal Democratic Party--America’s chosen instrument for keeping Japan in the Western camp--finally collapses under the weight of its own corruption and irrelevance. In Korea, a genuinely democratic regime comes to power and, for the first time in 30 years, gets the Korean army, long allied with the United States, back into its barracks. In Singapore, the foreign ministers of the Assn. of Southeast Asian Nations create an exclusively Asian caucus, which Japan supports even though the United States has been opposed. And China, the world’s biggest society, finally achieves its own approximation of the East Asian developmental model--authoritarian politics and market economics--and starts to grow at more than 10% a year, thereby posing major new problems for the environment, the global trading system and the balance of power.

What is the United States doing in response to these fundamental changes? Almost nothing. Even though the Americans invested great hopes in the reformist government of President Clinton, it is doubtful they anticipated that in foreign policy he would return to office almost every living member of the Carter Administration--including the secretary of state, the head of the National Security Council and his deputy and the ambassadors to Japan, Germany and the European Community. Even more inexplicably, the President named as his assistant secretary of state for Asia and the Pacific George Bush’s former ambassador to China.

The United States has a trade deficit with Japan of around $50 billion. Part of our economic reform therefore must include coming to grips with Japan’s economic challenge. Nevertheless, President Clinton named as the U.S. trade representative and as secretary of commerce men who freely admit they know nothing about either Japan or international commerce. Just as was the case in President Bush’s disastrous visit to Japan last year, President Clinton went to Japan in July without a single high official accompanying him who had substantial knowledge and experience of Japan and who could read the Japanese language.

Does this lack of expertise make a difference? Yes. The Americans are now missing a big opportunity to take advantage of Japanese events. With much of the Japanese Establishment under indictment for taking bribes from the construction industry, this would be a good time to push Japan to open its domestic construction to American firms. Instead, the U.S. trade representative withdrew his threat of retaliation under U.S. trade law, and on July 26 the State Department awarded a $7.1-million contract to a Japanese construction firm, the Obayashi Corp., to rebuild the residence of the American ambassador in Japan. (The State Department claims it had to take the lowest bid; has it never heard of deliberate underbidding and subsequent cost overruns?)

What should the United States be doing about Japan and the changing environment in the Pacific? Three things:

First, embrace results-oriented trade. We must recognize that every single effort to negotiate acceptable trade rules with Japan has failed and that the new coalition coming to power in Tokyo will be too weak (and perhaps too short-lived) to change this pattern. It is now necessary for the United States to negotiate, or simply adopt a trade policy based on acceptable outcomes. Trade must no longer be a vehicle for destroying American industries or exporting low-value jobs to this country.

Second, we must adopt an industrial policy. Japan and the other high-growth economies of East Asia have demonstrated that the state can be a critically important contributor to the success of market economies. These contributions include the things that Adam Smith specified--education, investment in infrastructure, incentives to save--but also public measures to provide American citizens with good jobs in high-tech industries.

Third, we must staff our government with people qualified to understand, monitor and shape new policies toward the countries of Asia. Such policies might include recognizing Vietnam, and making less saber-rattling speeches about North Korea, a regime on the ropes that is using its nuclear potential as a bargaining chip, not a realistic threat. We must also put some teeth into laws against our own officials working for foreign interests.