Gephardt Trade Amendment Voted : Measure Requiring Sanctions Squeaks by House 218 to 214

The House, angry over the rising trade deficit and lost American jobs, today narrowly approved the controversial Gephardt amendment that would require sanctions against leading U.S. trading partners who maintain large trade surpluses with the United States.

Hours before Japan’s Prime Minister Yasuhiro Nakasone arrived in Washington for a state visit, the House voted 218 to 214 for the amendment to a trade reform bill offered by Rep. Richard A. Gephardt (D-Mo.) that would designate nations like Japan for trade sanctions.

It marked a defeat for President Reagan, who met with about 15 waivering Republicans before the House vote. During the meeting, Reagan warned them that the Gephardt amendment “moves in precisely the wrong direction by closing our markets rather than opening foreign markets.”

The House action added the Gephardt provision to a wide-ranging trade bill expected to be approved Thursday. The Reagan Administration has threatened a veto if the bill becomes law containing the Gephardt measure.

The United States posted a record $170-billion trade deficit last year reflecting a loss of foreign markets and with it, the loss of American jobs.

Reagan Sees Danger

The provision would require nations like Japan that have excessive trade surpluses with the United States and engage in unfair trade practices to agree to change their practices and reduce their surpluses. If negotiations fail, the offending nation would be forced to cut its exports to the United States by 10% a year for four consecutive years.

Reagan called the measure “dangerous” and warned that it would invite retaliation against U.S. exports. The amendment is not expected to be included in a Senate version of the trade bill that has yet to be considered.

Gephardt said his provision would serve as a warning to U.S. trading partners that “unless they open their markets, there will be definitive action by the United States.” He added: “It’s a question of whether you want a standard of accountability that we will ask the President to back.”

Rep. Hank Brown (R-Colo.) argued that the Gephardt provision, which he co-sponsored, “was not a protectionist measure . . . (but) an opportunity to open foreign markets, to give Americans jobs and opportunities.”

Rep. Jack Kemp (R-N.Y.), speaking in opposition, said the amendment “repeats one of the most tragic mistakes of history” in reference to the 1930 Smoot-Hawley tariff act that sparked international retaliation and helped plunge the world into a depression.

‘Too Draconian’

“America needs more growth, more jobs and more trade, not recession, tariffs and trade wars,” Kemp said.

Although the majority of Democrats, including House Speaker Jim Wright of Texas, supported the Gephardt amendment, several Democratic leaders fought against it.

“The Gephardt amendment is too Draconian to be effective,” House Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.) said. “I would rather see us pass a bill that is so tough the Japanese can’t ignore, but so fair the President has no choice but to sign it.”

Before grappling with the controversial Gephardt provision, the House overwhelmingly approved, 398 to 19, an amendment that directs U.S. trade negotiators to agree to open American markets to foreign nations only if the other countries agree to give equal access to U.S. products.

“My amendment would not fence off America,” Rep. Marcy Kaptur (D-Ohio) said. “It would just require other nations to open their gates.”