Japanese See Racial Bias in U.S. Trade Bill

As the House-passed omnibus trade bill moved to the Senate floor Friday, it drew widespread condemnation in Japan as a protectionist measure that would stifle worldwide economic growth.

“The measure would adversely affect not only U.S.-Japanese relations but also developments in the world economy,” said Keizo Obuchi, chief spokesman for Prime Minister Noboru Takeshita.

“It seems the measures taken are not only aimed at the trade problem but are also based on racial discrimination against the Japanese,” said Hajime Tamura, the minister of international trade and industry.

Japanese government and business officials took comfort from President Reagan’s avowed intention to veto the bill, primarily over a provision requiring most manufacturers to give 60 days’ notice of plant closings and major layoffs.

“Put simply, on key provisions in the trade bill, the Democratic leadership in Congress has caved in to pressure from organized labor,” Reagan said in an address before the Legislative Exchange Council. “If this bill is unloaded on my desk, I’ll stamp it ‘reject’ and ship it back to where it was made.”

As debate began on the Senate floor, Majority Leader Robert C. Byrd (D-W.Va.) put Reagan on notice that Congress would enact no trade legislation at all this year if Reagan successfully vetoes this bill, which runs nearly 2,000 pages and took Congress three years to write.

The Senate, which debated the bill only briefly Friday, may cast its final vote as early as Tuesday. The House passed the bill Thursday by 312 to 107, more than the two-thirds’ majority that would be necessary to override a presidential veto, but an earlier vote to keep the plant-closing provision in the bill succeeded by only 253 to 167.

The bill, the product of a House-Senate conference committee, is considerably less protectionist than the bills originally passed separately by the two chambers. The conference committee, for example, eliminated the House-passed amendment by Rep. Richard A. Gephardt (D-Mo.), which would have mandated retaliation against Japan and other countries with large and persistent trade surpluses with the United States.

See Closing of U.S. Markets

That was not enough to satisfy the Japanese, who said that the bill would still close U.S. markets to their goods. They cited a provision that would give the U.S. trade representative authority to decide what constituted unfair trade practices by another country and to take retaliatory steps.

Eishiro Saito, head of the Federation of Economic Organizations, called on the Reagan Administration to recognize that U.S. prosperity is intimately linked to the worldwide economy--and that worldwide economic growth would suffer if the bill became law as passed by the House.

Particularly nettlesome to the Japanese is the bill’s three-year ban on purchases by the U.S. government of Toshiba Corp. products as punishment for the illegal sale by a Toshiba subsidiary of militarily sensitive technology to the Soviet Union. Toshiba President Joichi Aoi said that “it would be grossly unfair to punish Toshiba Corp.” for the actions of a subsidiary.

Tamura and other Japanese officials said that they expect the bill to be blocked in its House-passed form. Although most Senate leaders disputed that assessment, they conceded that the Senate is less likely than the House to provide sufficient support to override a veto because Republicans constitute a larger minority of the Senate than the House.

Backers Sing Bill’s Praises

The bill’s leading authors sang its praises as floor debate opened. Senate Finance Committee Chairman Lloyd Bentsen (D-Tex.) said that the bill would enhance America’s ability to thrive in the increasingly competitive global marketplace.

“We haven’t had a trade policy . . . since World War II,” Bentsen said. The nation may not have needed one when the United States stood alone as the world’s economic superpower, he said, but “that time has since changed, and now we’re in tough competition.”

Sen. John C. Danforth of Missouri, the ranking Republican on the finance subcommittee on trade, stood behind the bill despite his opposition to the plant-closing provision. “This bill is worth saving,” he said.

He called on Democrats to abandon the plant-closing provision but he said that he would vote to override a veto if the provision remains in the bill.

Reagan, in his remarks to the conservative state legislators, repeated his wish that Congress send him a trade bill he can sign. But he insisted that “the plant-closing restriction in the bill would make American industry less competitive, (which is) not the way to go if you want to redress the trade imbalance and save jobs. In fact, the restriction would cost jobs.”

Reagan quoted an unnamed Washington lobbyist as saying of his veto threat: “I think he’s crying wolf.” Replied Reagan: “Try me.”