President Vetoes Bill Curbing Shoe, Textile Imports

Moving to block a protectionist surge in Congress, President Reagan Tuesday night vetoed a controversial bill that would have curtailed imports of shoes and textiles.

The legislation had been passed by Congress by substantial margins after months of angry complaints about the loss of American jobs because of imports. But, despite the bill’s easy passage in both the House and Senate, an immediate congressional effort to override the veto was considered highly unlikely.

Reagan called his veto an outgrowth of “my firm conviction that the economic and human costs of such a bill run far too high.” He pledged “to do everything possible to combat unfair trade practices” and added that “we must take wise and positive steps to redress wrongs. To do otherwise would be counterproductive.”

Warning that the legislation would have invited costly foreign retaliation, Reagan offered the battered textile industry some hope by ordering an investigation into whether textile imports exceed agreed-upon limits. He also said that he would direct the Labor Department to provide an additional $100 million to help retrain and relocate displaced workers in the industry.

‘Well Aware of Difficulties’

“I am well aware of the difficulties of the apparel, textile, copper and shoe industries,” he said, “and deeply sympathetic about the job layoffs and plant closings that have affected many workers in these industries.”

Bill Klopman, chairman of the Fiber, Fabric and Apparel Coalition for Trade, an alliance of domestic companies, vowed Tuesday that “this issue will not go away.” Noting that the White House had received more than 3 million letters in support of the legislation, he added: “The American public and the overwhelming majority of the U.S. Congress demand a real solution.”

The bill, which would have curtailed textile and apparel shipments from Hong Kong, Taiwan and South Korea by 30% and established import quotas for non-rubber footwear, had a political importance far beyond its offer of relief for hard-pressed domestic companies.

From the time Congress returned after its summer recess, trade had been a hot issue as legislators worried that the continuing loss of U.S. jobs would translate into voter anger next year.

Strongest Momentum

The textile bill had the strongest momentum of any trade bill, with advocates for other U.S. industries watching its fate to gauge their chances for congressional help.

The measure was approved 255 to 161 in the House and 60 to 39 in the Senate--substantial margins, but short of the two-thirds majority needed to override a presidential veto.

With Congress scrambling to finish its work and recess for the Christmas holiday, “I don’t think there’s time for an override vote now,” said Jack McDonald, political coordinator for the textile and apparel industry coalition. “But I don’t see the trade situation getting any better.”

In fact, the Commerce Department reported Tuesday, the trade situation worsened during the third quarter, when the United States suffered a $30.5-billion deficit in the balance of payments--the difference between the value of goods and services bought from other nations and U.S. sales to those countries.

$2.8-Billion Increase

The deficit, which increased by $2.8 billion over the previous quarter, was the second-biggest splash of red ink ever, surpassed only by the $31.8-billion shortfall recorded during the final quarter of 1984.

The nation is headed for a record trade deficit this year as the strong dollar makes imports relatively cheap for Americans, while U.S. products are costly for foreign buyers. The comparative value of the dollar fell 7% during the third quarter, the Commerce Department said--and although this decline should help American firms in the worldwide competition for sales, it will drive up prices of imported goods for U.S. consumers.

Indeed, the political sensitivity of the trade issue is expected to persist as long as the United States imports so much more than it exports.

Although sponsors of the textile bill said they could not immediately amass enough votes to override the veto, “one can never tell what will develop as the election approaches, and therefore we have to be on our guard,” said Roger Bolton, spokesman for Special Trade Representative Clayton K. Yeutter. The override effort could be brought to a vote any time during next year’s congressional session.

Optimistic on Legislation

But Administration officials said they were optimistic that Congress “will not erect any quotas or tariffs or surcharges which would be protectionist,” Bolton said. Instead, he predicted, Congress is more likely to work on general legislation to strengthen the trade laws--an effort the Administration would welcome as long as it did not dilute the President’s final authority to make trade policy.