Trade Proposals by Reagan Could Backfire, Aides Say

The decision by top Reagan Administration officials to propose trade legislation next year--a move designed to defuse pressures from Congress for a strongly protectionist measure--could backfire unless the White House can develop a number of concrete proposals aimed at boosting U.S. economic competitiveness in world markets, the officials say.

But, so far, Administration officials conceded Thursday, they have few specific trade plans to offer as the centerpiece of President Reagan’s State of the Union message next month.

“We are determined to present a number of new ideas, but the cupboard is practically bare,” said one Administration aide. Most of the plans being considered in the White House, officials said, represent little more than a recycling of previous proposals--such as a loosening of antitrust laws, further government deregulation and changes designed to shield business from product liability suits.

The absence of any specific Administration proposals could lend momentum to congressional efforts to impose automatic tariffs on imports from countries that run large trade surpluses with the United States. That approach is vigorously opposed by the Administration, which contends that such protectionist measures invite retaliation.

Perhaps the most specific Administration proposal, which is being pushed by Labor Secretary William E. Brock III, is aimed at establishing new forms of assistance for workers forced out of their jobs by foreign competition. But the plan faces an uphill struggle inside the White House, because most such programs were eliminated during Reagan’s first term and several senior officials consider them incompatible with the Administration’s commitment to free markets.

Other proposals under consideration include the Administration’s request for negotiating authority to permit the United States to continue global trade-liberalization talks set to begin in January and expanded authority for the Commerce Department to enforce rules against unfair trade practices by foreign governments.

Earlier this week, in a reversal of its longstanding strategy of opposing any trade legislation, a group of senior Administration officials informally agreed that the White House should offer its own trade bill early next year.

Approval Awaited

But the Cabinet-level Economic Policy Council has not yet approved the decision, officials said, and Reagan has not personally given the green light to the plan to sponsor such a bill. Officials insisted that the new trade proposal is moving forward, though, and is unlikely to be stopped.

The new approach, advocated by U.S. Trade Representative Clayton K. Yeutter and Commerce Secretary Malcolm Baldrige, represents the Administration’s attempt to play a larger role in shaping the trade bill that officials now acknowledge is all but certain to emerge from Congress next year.

Key lawmakers, such as Sen. Lloyd Bentsen (D-Tex.), who will become chairman of the Senate Finance Committee next year, have been urging the Administration to bow to the political reality of a Democratic-controlled Congress and cooperate in drafting trade legislation.