The global economy is in the midst of upheaval and radical change. In the wake of Soviet collapse and a shift in economic emphasis from the Atlantic to the Pacific, a new balance of power is emerging. Managing Trade Relations in the New World Economy analyses the impact of this development for international trade. Thomas Andersson examines how East Asia has advanced in manufactured exports while the western economies have accrued major current account deficits. He identifies the key factors in East Asian success as human capital, the application of new technology and foreign investment. The experience of Japan and the East Asian newly industrialised countries is contrasted with that of North America and western Europe. The US has lost its economic hegemony and become pre-occupied with its domestic problems. The European countries have had similar difficulties in meeting the East Asian challenge and are now struggling with their own transformation. Andersson warns against the danger of protectionism, and stresses the need for a European agenda of openness. The ability to adjust and co-operate will be vital for success in the new world economy.