Baker Blasts 3 Democrats’ Trade Bill as Protectionist

Three prominent Democrats introduced legislation Wednesday aimed at forcing Japan and three other nations with huge trade surpluses to lower their barriers to imports.

The bill, which Treasury Secretary James A. Baker III blasted in a television interview as protectionism in “its rankest form,” would require Japan, Brazil, South Korea and Taiwan to pay a stiff 25% duty on all imports to the United States if they fail to reduce both their world trade surpluses and their U. S. surpluses.

House Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.), calling the measure an effort by moderates to head off a protectionist stampede in Congress, insisted that the bill itself is not protectionist.

Rostenkowski, whose panel handles trade legislation, appeared at a news conference with two other prime sponsors, Sen. Lloyd Bentsen (D-Tex.) and Rep. Richard A. Gephardt (D-Mo.). Bentsen is the second-ranking Democrat on the Senate Finance Committee, while Gephardt is a member of the Ways and Means panel and chairman of the House Democratic Caucus.

The bill quickly attracted numerous co-sponsors, all Democrats. That signaled that it may not go far legislatively but that it may be ridden hard as a political vehicle by Democrats, who say the Reagan Administration has done little to cut the huge U.S. trade deficit.

The U.S. trade deficit was $123 billion last year and may reach $160 billion this year, according to the Commerce Department.

The Democrats’ legislation takes aim at countries that have “excessive” trade surpluses--that is, world exports that exceed imports by 50% and exports to the United States that exceed imports from this country by 65%--and trade barriers that violate trade pacts.

Targeted countries would have a year to reduce their surpluses by 5% or face a 25% duty on all imports to this country. To escape the duty thereafter, the surpluses would have to be cut by 10% a year until they were no longer excessive.