House Democrats Unveil Plan, Similar to Reagan’s, to Cut Trade Deficit

House Democrats, dismissing President Reagan’s trade policies as too little and too late, unveiled their own plan Thursday for reducing the nation’s massive trade deficit--and revealed a package similar in many ways to proposals the Administration has already put forward.

Backing away from the strongly protectionist position embraced by a number of top Democrats, a 21-member task force produced a package that contained none of the tariffs and quotas included in several trade bills under consideration by Congress.

“This is an alternative to protectionism,” Rep. Bill Alexander (D-Ark.) told reporters at a Capitol Hill news conference.

A Broad Mixture

The task force offered a broad mixture of proposals designed to weaken the exchange value of the dollar; encourage U.S. exports through subsidies and credits; obtain tougher international trading rules under the General Agreement on Tariffs and Trade, and retrain workers displaced from industries damaged by foreign competition.

In contrast, three key congressional Democrats have sponsored a drastically protectionist bill that would impose a 25% tariff on all imports from Japan, South Korea, Taiwan and Brazil unless those countries reduce large trade surpluses with the United States.

Rep. Don Bonker (D-Wash.), co-chairman of the task force, insisted that the more moderate proposal announced Thursday “represents (Democrats’) views on trade issues.” The protectionist bill, he asserted, “is not the Democratic Party’s bill.”

Criticism of Reagan

As for the Administration, its actions to date “remain too little and too late for a problem that requires bold, determined leadership,” the task force said in its 10-page proposal. Moreover, several members charged that Reagan’s domestic budget and tax policies of the last five years were directly responsible for the overvalued dollar and record trade deficit.

But since last summer, when trade emerged as a potential vote-winner for Democrats, the Administration has slowly begun to move in the same direction on many of those points--even while threatening to veto the protectionist legislation some Democrats favor.

On Wednesday, the Administration announced actions against the Common Market and South Korea and disclosed an 11th-hour agreement with Taiwan to let some U.S. products into that protected market. A month earlier, it took similar action against Brazil, Japan and South Korea.

‘A Political Problem’

Nevertheless, Bonker said in a statement, “it is hard to believe that (Reagan’s recent trade actions are) anything more than posturing to deflect what has become a political problem for the Republican Party.”

One task force member, Rep. Don J. Pease (D-Ohio), declared: “We’re trying to compose a responsible course between the free-trade-at-any-social-cost policies of Ronald Reagan and protectionism.”

Last week the House Republican leadership unveiled its own legislative proposal that likewise followed many of the same strategies as those proposed Thursday.

The Democratic task force recommends an international conference to stabilize exchange rates and urges Congress to withhold authority for a new round of GATT negotiations until such a conference is convened. In addition, it seeks a $500-million mixed-credit program to help finance U.S. exports.

Calls for Reciprocity

Although it calls for reciprocity against any unfair trading practices by other nations, the package does not list any specific remedies such as the 25% surcharge recommended by the protectionist bill.

No action is expected until next year on the Democratic package, which must still be approved by the party caucus before it can be introduced as legislation.

Meanwhile, a top Administration trade official told reporters Thursday that a newly appointed inter-agency “strike force” that is trying to identify and combat unfair trade practices abroad will recommend a trade action plan to the White House by early next month.

Bruce Smart, undersecretary of commerce for international trade, hinted that the recommendations would focus on industries in which the United States has a competitive advantage because of superior technology.