Asking for Trouble

Efforts of at least three committees in the House of Representatives to erect protectionist walls around the United States and impose mandatory retaliation in trade disputes will be brought together in a “mega-bill” by the House leadership on Tuesday and rushed to floor action. The result threatens to disrupt international trade, poison efforts to establish a freer flow of goods among nations and invite trouble for U.S. exports.

For all its appalling consequences, however, the package is gaining support from a coalition of special interests, each mistakenly assuming that its economic problems of the moment can be resolved by banning foreign competition and legislating how other nations behave. The Democratic Party, apparently thinking it can exploit the complex problem to advantage in this year’s elections, is leading the way.

The most dangerous aspect of the legislative package is that it will discourage important reform movements at the very moment that these reforms are gaining international acceptance. The establishment of the Group of Seven at the Tokyo Economic Summit last week, the agreement on a new round of negotiations for a greatly expanded General Agreement on Tariffs and Trade and the new agreements with Japan and the European Community to move from confrontation to conciliation on outstanding issues all would be jeopardized by the protectionist package.

While the details will not be known until Tuesday, it is already clear that the legislation will embrace mandatory retaliation which would undermine the widely-accepted concept that international trade agreements cannot be negotiated on a product by product basis but must reflect overall trade. The package is expected to include specific cuts on imports from Japan, Germany and Taiwan in ways that would tear apart existing agreements and standards for settling disputes over unfair trade.

America’s own farm exports would be at risk through a loosely written ban on so-called resource subsidies that seeks to punish any product that benefits from alleged below-market inputs, including oil, water and power. Automatic penalties imposed on imports judged to be products of places without due respect to workers’ rights would open the way to endless challenge and unresolvable dispute.

Unemployed steelworkers in Pittsburgh, dislocated textile workers in the Southeast, surplus-suffocated grape growers in Fresno and farmers fighting over-production and depressed prices are being told that this protectionism will resolve their problems. It will not. It will only make them worse.

The Administration already has adequate legislative tools to move ahead in the constant struggle to overcome unfair practices and to gain more access for American exports. It has been working effectively. That effort should be encouraged, not sabotaged.