Reagan Praises Agreement With Japan on Microchips, Denounces House Trade Bill

President Reagan, defending his trade policy in a speech to businessmen, praised “the framework of an agreement” that would open Japanese markets to American-made computer chips and prevent Japan from “dumping” lower-priced chips in U.S. and other foreign markets.

Reagan conceded, however, that “the precise details still have to be hammered out” before the agreement can be put into effect. Asked later for a timetable on the final agreement, White House spokesman Edward Djerejian said he could not provide one.

“There is a lot of give-and-take that has to take place,” he said.

In his speech, the President also denounced a House-passed trade bill as “kamikaze legislation” that could “send our economy into the steepest nose dive since the Great Depression” and throw millions of Americans out of work.

Little Applause From Businessmen

But Reagan’s remarks attracted little applause from the audience of businessmen affiliated with the National Assn. of Manufacturers as he warned “how dangerous it is to play a game of chicken with our trading partners--because it won’t be long until we’re both driving over that cliff.”

Reagan has long warned of the dangers of protectionism, casting himself and his Administration as champions of free trade. Yet he has taken a number of steps to align himself with those who favor limited protectionism for imperiled American industries.

U.S. and Japanese negotiators have been discussing semiconductor trade since late March and reached a basic accord Wednesday, when Japanese news agencies first reported that the agreement had been reached after a bargaining session that lasted nearly 14 hours.

American semiconductor manufacturers have been seeking greater access to Japan’s computer chip market, claiming that a cartel backed by that country’s government has held U.S. sales to about 10% of consumption.

Canadian Criticism

The President made his speech only a day after he was assailed by Canadian Prime Minister Brian Mulroney for imposing a 35% duty on imports from Canada of cedar roof shingles and siding. Mulroney, who has prided himself on his personal relationship with Reagan, appeared particularly incensed by the action, which he said violated a longstanding agreement to impose no protectionist penalties on Canada.

However, Djerejian defended the import duty Thursday as “a very considered judgment.” The industry had brought “a very strong case for import relief,” he said, adding that the restrictions were temporary in nature and would have a declining impact over five years.

Djerejian said Vice President George Bush would travel to Ottawa on June 10 for discussions with Mulroney on a range of issues, including trade.

Although the trip is clearly designed to soothe the ruffled Canadians, a spokesman for Bush said no change in policy is being contemplated.

“His main function will be to listen,” said Marlin Fitzwater, Bush’s press secretary. “We are not going there to negotiate.”

Reagan, in trying to steer a free-trade policy through an increasingly protectionist environment in Congress, has made a number of compromises under the rubric of “fair trade.” In a fact sheet distributed to reporters, the Administration noted that it has taken nearly two dozen actions in the last nine months to protect U.S. industry against allegedly unfair foreign competitors.

Declining Value of Dollar

The President also pointed out in his speech that the steps taken by the Administration to bring down the value of the dollar in relation to other currencies have helped increase U.S. exports.

The declining dollar was a particularly sticky subject earlier this month at the Tokyo economic summit, during which Japanese Prime Minister Yasuhiro Nakasone protested that the changing currency relationship could throw his country into a recession.

The Administration has been pressing the Japanese government on a number of trade issues, and Reagan claimed credit for opening up markets previously shut to American exporters of telecommunications and medical equipment, pharmaceuticals, electronics and forest products. Moreover, he promised, “we’re going after transportation equipment.”