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U.S. Senator Paul Tsongas, a Democrat from Massachusetts, pointed out that there was no consensus behind the Administration's Central American policy in the U.S. either. Iklé nonetheless firmly warned the European panelists that "if you have a succession of 'Cubas' in Central America, then I predict that much of our resources would be diverted from the Atlantic Alliance."
Economic Concerns. Clearly mindful of the forthcoming annual Western Economic Summit to be held in Williamsburg, Va., later this month, the participants called for greater coordination of Western economic policies in order to avoid what U.S. Special Trade Representative William Brock aptly described as "international dyslexia, where we have a disconnect of various components of policy." The West, said Brock, must act to "reduce barriers to trade and reinforce growth. That requires a substantial improvement of communication and coordination of policy." Achieving that will be difficult, yet if the allies fail to do so, Hormats pointed out, "the deterioration of economic cooperation within the West will almost certainly weaken the alliance."
European complaints about the management of the U.S. economy focused on the large U.S. budget deficits that are keeping real interest rates high. West Germany's Steger summed up the European case by warning, "As long as you stick to this policy of high deficits, an overvalued dollar, capital sunk in for the health of the New York stock market but not industry, then there will be pressure for protectionism." U.S. Senator Charles Mathias, a Republican from Maryland, also took the lead in voicing concern over protectionism, referring specifically to rising U.S. public pressures for import restrictions. "Protectionism is a serious problem that needs a high degree of understanding by the American people," he said. "We need all the help we can get from other countries of the alliance not to take protectionist measures that would feed the flame [in the U.S.]."
East-West trade provided less divergence than expected—though it is likely to lead to sharp disputes at Williamsburg if President Ronald Reagan persists in trying to force Western Europe to curb trade with the East bloc for political reasons. Louis Kawan, the European Commission's director for foreign affairs, reported that European governments agreed that nothing should be done to reinforce the military capacity of the Soviet Union. At the same time, he pointed out that the European Community conducts 60% of the industrialized world's East-West commerce and that such trade "provides stability for European economies and thus strengthens the alliance." There was no proof, he argued, that East-West trade had "any impact" on Soviet decision making. That assertion was contested by Sonnenfeldt, who defended the U.S. Administration's position that "the Western industrialized countries who also happen to be allies in the security sense cannot give up at least trying to think about the implications of economic relations with the Soviet Union."