As a first impression, the rumblings from Washington are worrying. In his State of the Union speech last week, President Bill Clinton indicated his readiness to mount an aggressive defense of the U.S. steel industry and singled out Japan as a prime offender among countries "dumping" steel in U.S. markets. To deliver on that threat, Mr. Clinton is threatening to revive "Super 301" authority with which he can punish countries that his administration decides are unfair traders. At the same time, the United States is involved in a nasty dispute with the European Union over the EU's banana import regime. Trade officials, economists and Washington watchers warn that the slowdown in the U.S. economy that is projected for this year will increase pressures on the administration to go on the offensive on trade issues. But dire predictions of a return to the rancorous trade disputes of the past are overblown. If the U.S. exercises restraint and its chief trading partners --including Japan -- show some leadership, we might even be able to put the world trade system on a firmer foundation than ever before.

The pressure on the U.S. administration is understandable. The U.S. trade deficit in the first 11 months of 1998 reached an all-time high of $153 billion, and it is projected to swell by another $50 billion when the December figures are announced. At the same time, Japan's trade surplus with the world swelled 40 percent in 1998, to 13.9 trillion yen ($121.8 billion), and its surplus with the U.S. leaped 33.4 percent to 6.7 trillion yen, or $58.3 billion.

There are ready explanations for those figures. The U.S. economy continues to grow, and in the process it is sucking in imports. While America is chided for living beyond its means, more sober minds note that U.S. demand is one of the few drivers in the global economy. Japan, in contrast, lolls in the doldrums. Its bulging surplus is the result of a steep drop in demand for imports more than anything else.