The Wrong Solution
A study by the Congressional Budget Office has confirmed earlier reports that proposed legislation to limit textile and apparel imports will hurt American consumers, provide only short-term relief to American manufacturers and weaken the U.S. economy.
These findings by the respected and bipartisan office may help cool the reckless mood in Congress, where legitimate constituent concerns are being translated into counterproductive, extreme legislative responses sure to do more harm than good.
The textile bill, now moving ahead in both House and Senate, is not the only dangerous piece of legislation making its way toward final congressional action, but it dramatizes why an increased wall of protection will only weaken the American economy. The textile and apparel industries already are heavily protected. Some of the unemployment being blamed on imports is actually the result of automation and modernization of American factories. The remedies being proposed in the bill would punish nations of great importance to the United States, among them Thailand and China, while imposing on American consumers price increases for clothing and textiles measured in millions of dollars, creating an unwelcome inflationary pressure. Some uncompetitive manufacturers might find protection, and some jobs might be saved, but only temporarily, according to the budget office analysis, which concluded by noting that “these benefits do not continue to be realized in the long run.”
The goal of Congress should be the goal already articulated by President Reagan, addressing and correcting unfair trading practices and promoting American exports.
Far more constructive than any quick-fix offering pending in Congress is the firm insistence of the Administration that obstacles to American sales abroad be eliminated. Japan now has until the end of the year to clear away the barriers that are depriving Americans of fair access to the Japanese market.
Far more crucial to world economics and the future role of American businesses in that economy is the agreement, won Wednesday by the Reagan Administration, to move ahead in organizing a new round of negotiations within the General Agreement on Tariffs and Trade.
There is something that Congress and the Administration could do that they are not doing adequately. That is to bring down the inflated value of the dollar that places American exports at a singular disadvantage in world trade. The international agreement to bring down the dollar value may help. But the most important element is to reduce the federal deficit, something that can be accomplished only by a combination of budget restraint and new taxes. Until now, the restraints have been inadequate and the new taxes have been nonexistent.
Neither the nation nor the affected industries will be well served by protection that would only retard American competition in world markets, provoke retaliation and unfairly burden American consumers.
