The powerful chairman of the House Ways and Means Committee, offering a direct challenge to President Reagan, warned Thursday that the Administration must enforce “retribution” against countries that keep out American products or else face a “crippling fight with Congress.”
Rep. Dan Rostenkowski (D-Ill.) vowed to finish a major trade bill in the House this year, declaring at a news conference: “I am a tough trader who believes we should retaliate against unfair trade practices on a country-by-country basis . . . .”
In the Senate, Republicans avoided the partisan, accusatory tones of Rostenkowski but indicated that they, too, are reluctantly moving to take the management of trade policy away from the Reagan Administration.
President Reagan has not been “nearly aggressive enough” in opening foreign markets to American products, Sen. Slade Gorton (R-Wash.) told a hearing of the Senate Finance subcommittee on trade.
Moreover, Sen. Arlen Specter (R-Pa.) told the subcommittee that “blacks and women did not get justice” until the issues of their rights were removed from the executive branch and given to independent federal judges carrying out laws written by Congress.
Seeks Court Orders
Specter is seeking legislation that would provide for fast court orders to block the importation of goods being “dumped” in the United States at unfairly low prices.
Subcommittee Chairman John C. Danforth (R-Mo.) said that “all action is shifting” to Congress since Reagan recently refused to impose quotas on shoe imports.
The domestic footwear firms followed the trade laws, winning their case before the independent International Trade Commission, only to learn, “after years of effort, that they were suckers” when the President ignored the commission’s call for quotas, Danforth said.
But “I don’t like what we’re doing here--I don’t like the idea of Congress’ taking over the business of managing trade policy,” Danforth added. In many industries, he said, “large groups of people are waiting” for assistance from Congress because they are discouraged by the failure of the shoe industry to obtain help from Reagan.
The White House generally has followed a free-trade policy and the President strongly opposes restrictions on imports that could invite retaliation by other nations. In an effort to stem the protectionist tide in Congress, the Administration has agreed to work on trade legislation.
1986 Election Issue
But the effort may fall short of satisfying Congress, where Democrats believe that they can use trade as a winning issue in the 1986 elections and Republicans warn that they may be forced to oppose Reagan. A bill to roll back imports of textiles and apparel appears to have support from overwhelming majorities in both chambers--despite bitter opposition by the White House.
“I had hoped to resist the textile quota bill,” but pressure for it is much greater since the shoe industry was rebuffed, Danforth noted at the hearing, where several witnesses discussed the measure to cut back imports from China, South Korea and other textile suppliers.
Also worrying the White House is a general trade bill, promoted by Rostenkowski, that could slap 25% surcharges on imports from Japan and other nations that are running big trade surpluses with the United States.
“They can reduce their barriers and allow more U.S. imports” or else face the drastic tariff, Rostenkowski told a news conference.
Political, Economic Reality
“Two months ago, the Administration attacked our bill as protectionist,” he said. “Now, political and economic reality has forced the Administration on a wide U-turn. The Reagan White House finds its trade policy of benign neglect now defunct.”
But Administration officials insist that Rostenkowski’s bill, if enacted, could touch off a virtual trade war as other countries retaliate with tariffs against such vital American exports as wheat, lumber and computers.
Unless the President “comes up with a plan that brings retribution against countries who keep out, or unfairly drive up the price of, U.S. products, he’s guaranteed a crippling fight with Congress,” Rostenkowski said.
The Ways and Means Committee will begin writing a trade bill “as soon as we finish our work on tax reform--sometime in October,” he said, adding: “Congress should not quit this year before we pass a tough bill that finally sets a national trade policy.”