House Committee Votes for 35% Slash in Textile Imports

The House Ways and Means Committee, moving Congress a long step closer to its first direct showdown with President Reagan over trade policy, voted Thursday to slash textile imports from the Far East and Brazil.

Meanwhile, Japan--worried about the U.S. political furor over trade--promised decisive action by the end of the year to open its markets for billions of dollars worth of American goods, a senior U.S. government official said Thursday after a meeting at the United Nations between Secretary of State George P. Shultz and Japanese Foreign Minister Shintaro Abe.

In Washington, the Ways and Means Committee approved by voice vote a measure to reduce textile imports by 35%, in the words of Rep. Ed Jenkins (D-Ga.), the bill’s author, to save a domestic industry “on the verge of going under.”

For President Reagan, the bill in its current version is “intolerable” and will “almost assuredly” be vetoed if it clears Congress, Clayton K. Yeutter, Reagan’s special trade representative, said. If imports are curtailed, China and other affected nations would quickly retaliate against American products, Yeutter told reporters. The bill would slap quotas on textile imports from 13 countries, with particularly deep cuts in shipments from China, Brazil and Taiwan.

Moving Rapidly

Of the 300 bills introduced in Congress to deal with the nation’s soaring trade deficit, the textile measure is moving most rapidly. The full House is likely to consider the bill in the next week or 10 days, and Senate sponsors are trying to dispense with committee action and attach the bill to other legislation being debated on the Senate floor.

Because it is first on the legislative track, the measure has taken on political meaning far beyond its impact on the textile industry. Its fate is being closely watched by other domestic industries, such as shoes and steel, that are deeply concerned about the flow of imports and by U.S. trading partners worried about their continued access to markets here.

The Reagan Administration, contending that the worldwide system of free trade is working well despite a merchandise trade deficit that could reach a record $150 billion this year, says it is moving aggressively to deter occasional unfair trade practices by other countries.

(Meanwhile, the Washington Post reported that the Reagan Administration is considering a major policy shift to support a program that would impose a fee of up to 1% on imports to provide about $250 million in job-training aid for workers who lose jobs because of foreign competition.

(Senate and House committees have approved measures that would extend--and significantly expand--the Trade Adjustment Assistance program beyond its current expiration date of Monday. President Reagan had called for scrapping trade-adjustment aid because of its cost and because of criticism that it fails to provide useful retraining.)

The Administration says that the trade deficit is primarily caused by the dollar’s strength in relation to other currencies, a relationship that makes imports relatively cheap for Americans and U.S. goods costly overseas.

A bipartisan group of congressional leaders, worried about the strong dollar, said that it had asked President Reagan to convene an international conference to consider ways to stabilize currency exchange rates.

Japan, aware that its $37-billion trade surplus with the United States last year provoked outrage from its chief trading partner, moved to calm the waters. Foreign Minister Abe told Schultz that Japan wants to complete unresolved trade negotiations this year.

The United States has been trying to persuade Japan to dismantle trade barriers and accept more American telecommunications gear, medical equipment, drugs, electronics goods and forest products.

If tariffs and other barriers are removed, U.S. sales to Japan could increase by $4 billion to $10 billion a year, said a senior U.S. official at the United Nations who asked not be identified.