Reagan Demands Progress by Allies to End Trade Curbs
President Reagan criticized the trade policies of unnamed allies Saturday, warning that the United States will seek an end to “intolerable” curbs on sales of farm goods and other products when a 92-nation trade meeting opens Monday.
In a radio talk addressing one of his party’s sorest political spots, Reagan demanded tangible progress from allies on freer trade when a meeting of the General Agreement on Tariffs and Trade convenes in Punta del Este, Uruguay.
He several times blamed allies for adding to the nation’s projected $175-billion annual trade deficit, saying Americans are “some of the hardest hit” by foreign farm-export subsidies, “victimized” by foreign thefts of patents, and injured by foreigners who “cordon off” exports of American services such as telecommunications.
Reagan repeated, however, that he rejects demands to retaliate by raising similar trade barriers in the United States. Legislation to place quotas and tariffs on a range of foreign goods has been pushed in Congress for almost two years by members of both political parties.
Advocates Opening Markets
“The answer to our trade balance problem is not to close our markets, cut imports or collapse trade,” the President said. “Millions of American jobs are tied to imports. The way to a better life is to open markets now closed, improve trading conditions and to expand our exports.”
Agriculture Secretary Richard E. Lyng, Commerce Secretary Malcolm Baldrige and Trade Representative Clayton K. Yeutter will be “fighting hard” to ease foreign trade barriers at the Uruguay talks, Reagan said.
The so-called GATT talks were advocated primarily by the United States, which hopes most to lower trade barriers in areas where Americans are most competitive, including agricultural goods and business services. Some experts also say the talks will allow the White House to score political points for its pro-trade efforts before November’s congressional elections, aiding Republican candidates who are being harassed by Democrats over the U.S. trade problems.
The Democrats, in their broadcast response to Reagan’s address, said Saturday that the President’s refusal to crack down harder on foreign trade practices has forced American manufacturers to move factories abroad, leaving low-paying jobs in their wake.
“We’re losing our decent-paying jobs in manufacturing, oil and gas production and in heavy industry,” Sen. Jeff Bingaman (D-N.M.) said. “The new jobs are for people serving Big Macs.”
Import Record Expected
For the first time in history, Bingaman noted, United States imports in 1986 are expected to total twice the value of its exports.
In laying out a tough American stance for the GATT talks, Reagan hit hardest at foreign farm subsidies, a “mutually destructive” practice in which nations artificially lower the price of their farmers’ exported goods and sometimes raise tariffs to discourage imports as well. The United States has been especially critical of European Economic Community nations for subsidizing farm exports in competition with American goods.
“Friendly nations trying to help domestic producers are undermining the well-being of farmers all over the world,” Reagan said in his speech. “And American farmers are some of the hardest hit. The situation is intolerable, and we expect to have it corrected.”
While many experts agree that stiff trade barriers injure some American industries, the Reagan Administration’s own record on subsidies and restrictions is less than pure.
The United States last month signed a new agreement limiting 53 nations’ textile imports in an effort to fend off harsher trade curbs demanded by domestic manufacturers and their congressional representatives. Turkey grudgingly reached a separate agreement in July to limit its textile exports to the United States.
Sugar Dumped on Market
Last year, the Administration lent American sugar farmers the equivalent of 17.72 cents per pound of sugar to finance the planting of their crops. After farmers defaulted on the loans, the government has dumped almost 300,000 tons of the sugar on the world market at prices as low as 3 cents a pound.
Caribbean sugar-producing nations warned in August that the plummeting price of the product, as well as growing barriers to sugar imports in the United States, are having a “devastating” impact on their economies.
The United States outraged its Australian allies last month when it agreed to sell wheat to the Soviet Union at federally subsidized prices that not only undercut wheat prices in America, but those of Australian farmers as well.
Trade barriers and subsidies erected by a number of allies are often “more flagrant” than those erected in the United States, said William R. Cline, an expert at the Institute for International Economics in Washington.
But the array of American trade restrictions imposed in recent months in areas such as farming and textiles--industries vital to less developed nations--"make it pretty unlikely” that trading partners will lower their barriers without American concessions, Cline said.