President Reagan, fresh from the economic summit meeting in Venice, warned Saturday that pending Democratic-backed trade legislation "would damage our own prosperity and that of virtually the entire world" by stifling trade at a time when U.S. competitiveness is improving.
In his weekly radio talk, the President said the U.S. economy is "outperforming those of our trading partners" and maintained that "because of our policies of low taxes and deregulation, the world economy is better off and America is already becoming more and more competitive."
Warning against efforts to "make America more prosperous by putting up barriers and imposing tariffs," he said he wanted to "work with Congress on a competitiveness package" that he linked to negotiations to remove foreign barriers to U.S. imports, but did not detail.
Reagan also promised to give "a full report" on the three-day economic summit that adjourned Wednesday in Venice in a nationally televised address scheduled for 5 p.m. Monday.
As Reagan accentuated the positive side of the U.S. economic picture in his broadcast, the weekly Democratic response, delivered by Michigan Sen. Donald W. Riegle Jr., raised the negative issue of deficits--the shortfall between federal revenues and spending, estimated at about $170 billion in fiscal 1987, as well as the imbalance in foreign trade, which also reached $170 billion last year. Riegle cited a Federal Reserve estimate that U.S. overseas debts will reach $1 trillion by 1990.
It was because of such deficits, Riegle maintained, that allied nations felt free to "give America the brushoff at the summit." Despite U.S. hopes, he said, "they said 'no' on trade fairness, they said 'no' on defense-burden sharing in the Persian Gulf and 'no' to our ideas on economic cooperation."
'No. 1 Debtor Nation'
Now that the United States has become "the No. 1 debtor nation in the world," Riegle argued, "America needs a tough trade strategy," which he said is embodied in the Democratic-sponsored bill that is expected to reach the Senate floor within a few days. He contended that it will "put a stop to the unfair trade practices used by some nations against the U.S." He referred specifically to Japan, South Korea and Taiwan.
The legislation, which has passed the House, would impose import quotas on those countries that restrict U.S. goods and services.
Reagan said his address on the summit Monday also will deal with the endorsement by North Atlantic Treaty Organization foreign ministers meeting in Reykjavik, Iceland, of a proposal to ban American and Soviet short-range missiles.
Because of "NATO's firmness and unity," he said, the foreign ministers reached "a crucial consensus on our arms reduction proposals that could move us closer to a historic agreement bringing about for the first time real and equitable reductions in U.S. and Soviet nuclear arms."
Sanctions on Japanese
Arguing for his Administration's trade policies, Reagan cited the $300 million in sanctions he imposed on Japanese electronic exports in mid-April in retaliation for Japan's failure to enforce an agreement limiting its exports of computer chips. After Japan "started showing positive movement in one area," he said he was "able to lift a proportional share of the sanctions." The figure, announced during the Venice meeting, was $51 million.
Making no mention of deficits, Reagan observed that the U.S. economy, since late 1982, has shown an average growth rate of 4% a year, which he said was "the same rate as that of Japan and a much better performance than that of Europe."
In the same period, he said, the United States developed 13 1/2 million new jobs--more than Europe and Japan combined--and averaged less than 4% annual inflation.