Reagan Urges Congress Not to Retaliate Over Foreign Trade : Says Relationships With Friends Could ‘Crash Into Sea’
President Reagan today urged Congress not to require retaliation against U.S. trading partners, saying it was a “dangerous” policy that would risk sending economic relationships with friendly countries “crashing into the sea.”
In a speech, Reagan said it may be necessary at times to impose sanctions and other punitive steps against other countries to resolve trading disputes, but he argued that the President should have the leeway to use “the full range of tools available under the law to work for more open markets.”
Reagan addressed the U.S. Chamber of Commerce as the House prepared to open debate Tuesday on an omnibus trade bill. It includes a proposal to force countries with large trade surpluses with the United States as a result of unfair trade practices to reduce the imbalances by 10% a year or face retaliation.
Preparing for Nakasone
The speech also sets the stage for a visit later this week by Japanese Prime Minister Yasuhiro Nakasone, who today criticized the United States for failing to carry out its “commitment” to Japan to reduce the federal budget deficit to help curtail the massive U.S. trade deficit with Japan. (Story, Page 4.)
“I hope that before long we can lift these (tariffs) and that this episode will be recorded as a small incident in the building of our relationship,” the President said.
“But we will do what is necessary to see that other nations live up to their obligations and trading agreements with us. Trade must be free. It must also be fair.”
Sending a Message
He said the punitive steps taken in the semiconductor case “sends one message--it’s time to get down to finishing work on the trade bridge that unites our countries.
“The final answer to the trade problems between America and Japan is not more hemming and hawing, not more trade sanctions, not more voluntary restraint agreements--though these may be needed as steps along the way--and certainly not more unfulfilled agreements.
“The answer is genuinely fair and open markets on both sides of the Pacific. And the sooner, the better.”
Taking aim at the trade bill, Reagan said that “some trade legislation now before Congress is dangerous.”
He said the plan before the House “would make us use a steamroller against unfair practices every time, no matter whether the steamroller would open the trade doors or flatten the entire house.
“A particularly bad proposal would require retaliation against trading partners who have large trade surpluses with the United States,” Reagan said. “It’s better policy to allow for Presidents--me or my successors--to have options for dealing with trade problems.”
