Bill to Force Reagan’s Hand on Trade Gains

The Senate Finance Committee today approved, 12 to 4, a bill giving President Reagan 90 days to either negotiate increased access for U.S. products in Japan or take action to reduce U.S. imports from that country.

The House Ways and Means Committee, meanwhile, approved a non-binding resolution similar to one unanimously approved by the Senate last week, urging Reagan to restrict imports from Japan unless it opens its markets.

Sen. Bob Packwood (R-Ore.), chairman of the Senate panel, said his committee will try to attach its proposal to some future trade bill coming from the House where, under the rules, such legislation must originate.

The Senate measure is much stronger than the non-binding House resolution. In effect, it would require the President to improve the U.S. trade deficit with Japan by $3.5 billion during the next 12 months. If he could not do so by increasing U.S. exports to Japan, he would be forced to limit Japanese imports.

The $3.5-billion figure was arrived at by calculating that Japan’s decision to relax its voluntary controls on auto exports to the United States would result in $4.5 billion in increased Japanese sales here. In a normal year, U.S. exports to Japan would rise by about $1 billion. The difference of $3.5 billion is what the committee says the President must somehow make up.

Even that would be only a small part of the U.S. trade deficit with Japan, which totaled $37 billion last year.

Reagan is closely watching developments in Japan on the trade controversy and has “great faith” in Prime Minister Yasuhiro Nakasone’s promises to push for concessions, a spokesman said today.

White House spokesman Larry Speakes said that two American envoys who met with Nakasone last weekend were persuaded by “positive signs” that Japan will move to open its markets to U.S. products.