Crazy Christmas Tree

There is no question that the omnibus trade bill has been improved in the weeks of negotiations by the 199 Senate and House members of the conference committee that is seeking to reconcile the separate bills passed by the two houses last year. But it is still far from what it should be. President Reagan is right to hold in reserve the threat of a veto.

The basic problem is that no omnibus measure is needed. All that is needed is the authority for the President to get on with the critically important new General Agreement on Tariffs and Trade that is now being negotiated in Geneva. That authority is contained in the conference legislation, a good and appropriate element. Would that it stopped there.

There is a sense of relief among the supporters of freer trade that much of the extremism of the separate House and Senate bills has now been removed. Unfortunately, that sense of relief increases the possibility that the present measure, however imperfect, will be accepted when what is needed is a new commitment to pursue a more balanced and constructive bill.

The removal of the Gephardt amendment is a major improvement. Its automatic retaliation formula, based on foreign nations’ trade surpluses with the United States, was a prescription for massive global retaliation and a breakdown of the trading system. Most of the outrageous proposals for responding to alleged dumping--that is, exports sold at below market prices--also have been eliminated. But the bill would still narrow the President’s discretion unnecessarily, and would transfer some additional authority to the special trade representative that would make it politically more difficult to negotiate agreements benefiting both U.S. and foreign traders.

Japan-bashing remains in the bill. It would likely do more harm to the United States than to Japan. The provisions to punish Toshiba, for the deplorable action of one of its subsidiaries in selling submarine technology secrets to the Soviet Union, have been softened; better they had been eliminated. The provisions demanding absolute reciprocity in licensing primary dealers in American government securities is clearly targeted at three Japanese firms in ways that could hurt the sale of U.S. government securities more than it might help the expansion of Wall Street to Tokyo.

The bill remains a Christmas tree of irrelevant ornaments--like a patent extension for a pharmaceutical manufacturer on a single prescription drug, a billion-dollar expansion of the already disruptive farm-export subsidy program, a requirement of 60 days’ notice on layoffs and plant closings, and the creation of a Third World debt facility study.

Final action on the bill is now thought to be at least a fortnight away. Congress will be in recess until April 11. The failure to reach agreement on Thursday, as originally planned, will now delay action on the next major trade business--the U.S.-Canada free-trade agreement.

Congress remains committed, nevertheless, to an up or down vote on the legislation to implement the historic U.S.-Canada agreement this year. That legislation, combined with an appropriately refined omnibus bill, would give useful impetus to the GATT negotiations in Geneva.