U.S. Signs Pact Letting It Curb Textile Imports

The United States signed a textile trading agreement offering “the maximum possible protection” for American workers, the Reagan Administration said Friday, warning that a more restrictive congressional measure would increase clothing prices by $44 billion over the next five years.

But the agreement failed to satisfy congressional critics, who accused the Administration of weakening under pressure from foreign exporting countries. They intensified their drive to override the President’s veto of a much more restrictive bill calling for a 30% reduction in textile and apparel imports.

The override vote is scheduled for Wednesday. It is a key test of political will between the Reagan Administration, fearful of the dangers of trade wars with friendly nations, and a protectionist-minded Congress, worried about the loss of U.S. jobs to imports.

Instead of reassuring Congress, the textile agreement announced Friday “will only have the effect of throwing gasoline on a smoldering flame and will ultimately build support for a vote to override the President’s veto and save the jobs of thousands of our citizens,” Sen. Strom Thurmond (R-S. C.) said.

With pressure building as the vote nears, U.S. Trade Representative Clayton K. Yeutter denounced Thurmond’s comments as “complete nonsense,” a strong rebuke for one of the Administration’s strongest supporters in Congress.

Restricting Imports

The new textile pact--formally called the Multi-fiber Arrangement--will allow the United States to restrict imports of such products as ramie, a fiber used in making sweaters, and linen and silk blends, which previously had been free of all controls. The Multi-fiber Arrangement provides the general terms for imports but the United States must negotiate specific limits with each exporting nation.

When disputes arise, the United States has the authority to cut back imports from a particular country for as long as two years while an agreement is being negotiated. This should prevent “import surges,” the White House said.

The new pact, adopted in Geneva Friday morning by the United States and 53 other nations, requires also that exporters cooperate with the United States in combatting fraud and other illegal practices.

But domestic producers scorned the agreement, which will run for five years. It is “an absolute failure; it has so many loopholes, it is totally meaningless,” said Dewey L. Trogdon, president of the American Textile Manufacturers Institute.

Imports Up 17% Annually

Textile imports have risen at a 17% annual rate during the last five years, wiping out 300,000 U.S. jobs, according to the domestic industry. The new agreement should hold growth to a much lower level, Yeutter said at the White House.

“We’re very pleased with the results,” he said. “We’ve been saying for months and months that the right way to handle the problem is through negotiation, not legislation,” Yeutter said.

By contrast, the textile and apparel enforcement act passed by Congress and vetoed by the President is a “sledgehammer” that could invite retaliation by other countries against U.S. farm products and high-technology goods, White House spokesman Larry Speakes said. And prices for clothing would jump by $44 billion if consumers were denied access to imports, he said.

The industry says that prices charged to retail stores would rise but that the domestic economy would have an overall net gain through the creation of 140,000 U.S. jobs.

Political Trading

The vote to overturn the veto is likely to be quite close and will hinge on last-minute political trading.

The White House won some wavering farm state members Friday when it backed a subsidy plan that would allow farmers to sell 4 million tons of surplus grain to the Soviet Union at cut-rate prices.

House Minority Leader Robert H. Michel (R-Ill.) said that farming area members were asking themselves: “What have I been waiting for (from the White House) that I haven’t gotten?”

Michel delivered the message of concern in a morning meeting with President Reagan and later told reporters that the vote count is very tight. “When you’re working on the margins, even absentees can make a difference,” he said.

Rep. Sam Gibbons (D-Fla.), a leading Democratic spokesman on the trade issue, predicted that a bipartisan coalition would uphold the President’s veto.

“I think we’re going to win this vote; it’s going to be close,” he told reporters. “It’s do-able, but we can’t let up.” The other side also predicted victory. “The so-called ‘free-traders’ who believe this new agreement will forestall support for the override vote are sadly mistaken,” Thurmond said.