Wrong Direction on Trade
Congress is about to send a battering ram overseas to do work that Americans once reserved for clipper captains and sharp-trading merchants.
Even if Congress changes its mind about the battering ram--as it should--it still could do great damage to the agreement between the United States and Canada that shows the world how free trade can and should work.
By daring President Reagan to veto the omnibus trade bill and its 1,000 pages of big and little print, Congress may push the calendar to a point where it cannot ratify the U.S.-Canada trade bill. That would be a tragedy perhaps exceeding passage of the omnibus bill itself.
Some parts of the omnibus trade bill now before the Senate have real merit--a program to retrain workers who through no fault of their own lose jobs to foreign competition; a clause that requires companies to give at least 60 days’ notice of closing, and presidential authority to negotiate new international trade terms. It is a shame to urge that they be sacrificed.
What is most often written about the bill also is true: It is less protectionist than it was before some of the worst ideas of Rep. Richard Gephardt (D-Mo.) were taken out.
But it still sends wrong signals everywhere--to industrial nations abroad, to industries at home and to American workers who politicians hope will not examine the so-called jobs-protection bill closely enough to see that over the years it will have an opposite effect.
The same goes for manufacturers. The smart ones know that the measure will hurt more than it helps to the extent that it interferes with free and competitive trade. But the smart ones are not the problem for the U.S. trade balance. The rest may get the idea that it is still possible to bully other industrial nations into making America competitive again when in fact the only way to reach that goal is to compete.
For example, presidential authority to use the battering ram against nations that close markets to U.S. products has been watered down, but it remains bad news. Instead of restricting retaliation to specific product lines, everything a competing nation manufactures could be shut out.
A section that increases agricultural subsidies goes directly in the wrong direction for world agriculture.
But the main problem is not the flawed sections of the bill in themselves, it is the emphasis that Congress puts on punishment, as though the United States were in a better position to call the shots on trade than any other industrial nation these days. This country is still very powerful, but it shares that power, particularly in economics, as it has not been forced to do since World War II.
To succeed in international commerce, America must compete with other nations and negotiate rules and regulations that make competition possible. It is not a situation that the United States can change with a law, and it should not even try.
