Trade Bill Conferees Vote Stiff Sanctions on Toshiba

House and Senate conferees, ignoring Administration warnings that their action could sink the omnibus trade bill, voted Thursday to impose tough trade sanctions on Toshiba Machine Co. and its huge Japanese corporate parent for selling technology of military value to the Soviet Union.

But Administration officials softened their earlier threats to veto the gigantic trade bill over the Toshiba issue.

“We’re not signaling a final veto . . . “ said White House spokesman Marlin Fitzwater. “We’re still trying to influence the bill and make changes that will work in our favor.”

Although the congressional conferees finally resolved the Toshiba matter, they failed to reach agreement on the myriad of other controversial issues that have stood for months in the way of enactment of comprehensive trade legislation.

Meetings continued into the night, but conferees appeared to have lost all chance of completing action on a compromise bill before the Easter recess, scheduled to begin today.

Among the unresolved issues:

--A demand by House Democrats that foreign investors in U.S. companies and real estate be subject to extensive disclosure of their holdings.

--Efforts by both houses to mandate retaliation against foreign countries deemed to engage in unfair trading practices.

--A Senate-passed provision to strip the President of authority to decide how to handle disputes over unfair trade practices by foreign competitors.

“We haven’t gotten much out of this conference, and I’m awful disappointed,” said Rep. Sam Gibbons (D-Fla.), an original architect of the huge bill. The House passed its version of the trade bill last April and the Senate followed in July. A conference committee from the two houses has been working ever since on a compromise.

The Toshiba issue has been one of the most difficult. As recently as Wednesday, a letter signed by Secretary of State George P. Shultz, Commerce Secretary C. William Verity Jr. and Deputy Defense Secretary William H. Taft IV was delivered to Congress, threatening a veto if the final bill included Senate-passed language punishing Toshiba.

The Senate bill would have banned most imports from Toshiba’s entire manufacturing empire for two to five years because Toshiba Machine Co., along with a defunct Norwegian company, sold computer-run milling technology that is believed to have enabled the Soviet Union to make virtually noise-free submarine propellers.

Passed Before Disclosure

The House bill, which was passed before disclosure of Toshiba’s sales to the Soviets, would have left the Administration with the discretion it sought to decide on sanctions against companies that sell high technology to the communist bloc.

The Administration officials who threatened a veto earlier this week in their letter argued that the Senate-passed bill would have a “chilling effect” on U.S.-Japanese relations and undermine multilateral efforts by Western governments to stem the flow of militarily valuable technology to the Eastern bloc.

The compromise would ban imports from Toshiba Machine Co. for up to five years. It would bar the huge parent corporation, whose products include computers, consumer electronic goods and vacuum cleaners, from sales to the U.S. government for three years.

The provision would also ban imports for two to five years from any company that sends militarily useful equipment to communist countries in defiance of an agreement among Western nations that is designed to control the flow of such goods.

Possible Veto Bait

Even if the Administration decided to accept the Toshiba compromise, other unresolved provisions of the trade bill loom as possible veto bait.

Treasury Secretary James A. Baker III has threatened that the bill would be vetoed if it included House-passed language that would impose what he described as intrusive disclosure requirements on foreign investors.

Treasury officials were reportedly unhappy with a proposal under discussion by the conferees to require the Commerce Department to turn over to Congress all existing records of foreign investment in the United States.

On another contentious issue, House conferees had all but abandoned the so-called Gephardt amendment, which would mandate retaliation against countries with large trade surpluses with the United States.

Unhappy With Senate Bill

But the Administration has said it is equally unhappy with the Senate-passed alternative, which also would mandate retaliation against foreign competitors deemed to be unfair.

Late Thursday, the conferees also had failed to decide:

--Whether to set up a new agency to train workers who have lost their jobs as a result of competition from imports.

--Whether to impose punitive duties on subsidized imports from foreign industries that are restricted to U.S. investors.

--Whether to repeal the windfall profits tax on the oil industry.