Formula for Decay

The trade bill that has won overwhelming support in the Senate is a disappointment, and President Reagan’s veto threat is a welcome alternative. Whether the veto will be required will depend on what the House and Senate conference committee does with the bills that have emerged from the two houses.

Both the House and Senate bills contain elements that would weaken the negotiating strength of the nation just as another round of global trade negotiations is beginning in Geneva, and would sour the international climate with a heightened risk of trade wars and retaliation. The House bill is fatally flawed by the amendment of Rep. Richard A. Gephardt (D-Mo.) mandating trade sanctions as a response to trade deficits, but the Senate bill, while lacking anything quite as blatantly negative as the Gephardt amendment, is also fatally flawed by its concessions to special interests, including a quota on lamb imports, and its restraints on presidential discretion that is essential to implementing an effective trade policy.

There had been an expectation that the Senate would demonstrate more restraint than the House, but in 13 working days over four weeks it has adopted no fewer than 115 amendments. They run the gamut of relevant and irrelevant issues, including a ban on imports of Toshiba products to punish the Japanese company for illegal exports to the Soviet Union. Some elements are only tangentially related to trade, including a requirement that any enterprise with more than 100 employees give 60 days’ notice of closing that would involve a mass layoff of workers.

The conferees will be under enormous pressure to preserve all of the victories won by particular groups. That could be the ruin of the bill. What is needed in fact is very little. The main requirement is to renew the President’s world trade negotiating authority that will expire next January--including a provision for the fast-track congressional approval of trade agreements, which means an up-or-down vote on trade agreements without amendment by Congress. Beyond that, existing law gives the President adequate tools to respond to unfair trading practices and to accelerate global negotiations that in themselves can open new markets to American goods and services.

Protectionism lurks near the surface on Capitol Hill. That was evident last week when the trade subcommittee of the House Ways and Means Committee approved, in action separate from the omnibus trade bill, legislation limiting footwear and textile imports. This legislation, like the bulk of the House and Senate trade bills, is a formula for protecting American enterprises from foreign competition. That in turn is a formula for national economic decay and decline.