China won’t repeat Japan’s Plaza Accord mistake
2018-03-29 09:58:14 source：Global Times
March 28, 2018
A trade war is looming as US President Donald Trump signed an executive memorandum on March 22 that would impose tariffs on $60 billion in Chinese imports. When coming to the analysis of the trade conflict, some compare it with the situation in 1985, the year the Plaza Accord was clinched. Despite differences between Japan then and China now, Beijing can learn some experience from Tokyo.
The Breton Woods System was founded, soon after the end of World War II. The US, with its super economic power, put the blame on countries suffering from a trade deficit for causing trade imbalance. It was because the US was the largest trade surplus country. Decades later in the 1970s, massive capital outflow and migration of manufacturing turned the US into a trade deficit nation. Washington started to shift the blame to surplus countries.
The Plaza Accord was signed in September 1985 by the US, the UK, France, West Germany and Japan in a move to shrink Washington's budget and trade deficit. Prior to the agreement, Japan had become the world's biggest surplus and creditor country. Products made in Japan were seen everywhere across the world.
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