Omnibus Trade Bill Passed by Congress : Reagan to Sign Measure Stiffening Ability to Retaliate Against Unfair Actions Abroad

The omnibus trade bill, three years in the making and buffeted for months by legislative controversy, cleared the Senate by a vote of 85 to 11 Wednesday and will become law with President Reagan’s promised signature.

The bill will strengthen the government’s ability to retaliate against unfair trading practices abroad and establish a new program of unemployment relief and job training for workers thrown out of their jobs by import competition. The House passed an identical version of the bill by a vote of 376 to 45 on July 13.

Bill 1,128 Pages Long

Reagan promptly announced his intention to sign the legislation. “While this bill is not perfect--no bill 1,128 pages in length ever is--on balance, it will strengthen American’s international competitiveness,” he said in a statement.

Republican Sen. John C. Danforth of Missouri, a key author of the bill, praised it as “designed to enforce the rules of international trade. . . . It is a very big step forward toward a more competitive America.”

Critics, including Republican Sens. Phil Gramm of Texas and Ted Stevens of Alaska, warned that the bill would lead the nations feeling its brunt--particularly Japan, West Germany, South Korea and Taiwan--to retaliate by curbing imports from the United States.

Reagan vetoed a similar bill in May, largely because it included a provision that would have required businesses with more than 100 employees to provide 60 days’ notice of plant closings and major layoffs.

The House and Senate then turned the plant-closing provision into a separate bill, which gained support as November’s congressional elections neared, and Reagan said Tuesday that he was allowing that bill to become law without his signature.

The trade bill cleared the Senate after a strong bipartisan majority beat back several amendments.

Any changes in the bill, the majority argued, would have forced the creation of a House-Senate conference committee to iron out differences with the House-passed bill. A similar committee needed nearly two months last spring to hammer out a compromise version of the bill that Reagan ultimately vetoed, and fewer than 30 working days now remain before Congress adjourns for the year.

“If we start down the road with these amendments . . . I don’t know how long we are going to be here,” said Sen. Lloyd Bentsen of Texas, a major sponsor of the bill and the Democratic vice presidential candidate. “We are not going to accept any amendments. At some point we have to say enough is enough and move forward.”

The amendment with the greatest support would have stripped from the bill a provision, quietly inserted by last spring’s House-Senate conference committee, to increase the amount of ethanol that may be imported duty-free from the Caribbean.

An array of farm state senators, including Bob Dole (R-Kan.), J. James Exon (D-Neb.), David Karnes (R-Neb.) and Charles E. Grassley (R-Iowa), protested the threat to American ethanol, which is made from corn and other grains.

After extensive negotiation, the farm state senators withdrew their amendment, and the bill’s sponsors agreed to let them offer a separate resolution retroactively amending the bill to strip it of the ethanol provision. That resolution was adopted by a 62-34 vote and sent to the House, which also must approve it before the ethanol provision is deleted.

Bill Called Protectionist

In its final form, the trade bill has already been labeled in other countries as protectionist, although it does not contain some of the tougher provisions that at one time had been approved by either the House or the Senate.

Gone from the bill, for example, is the House-passed provision sponsored by Rep. Richard A. Gephardt (D-Mo.) to impose strict curbs on imports from countries that run large trade surpluses with the United States and fail to reduce them according to a fixed schedule.

As Reagan had sought, the bill will expand his authority to negotiate bilateral and multilateral trade agreements in the current round of world trade talks in Geneva and to proclaim tariff reductions of up to 50% without congressional approval.

However, the bill will also require the government to retaliate against trade practices by foreigners that are held to violate existing trade agreements.

Presidential Powers Curbed

Under present law, the President may waive retaliation on grounds of “national economic interest.” The new bill will strip him of his authority to forgo retaliation except “in extraordinary cases, where action would have an adverse impact on the U.S. economy out of proportion to the benefits of action,” or on grounds of national security.

The bill will also make it marginally easier for companies to get temporary protection from foreign competition in the form of tariffs and quotas.

The International Trade Commission, which establishes such protection, will be required to consider only U.S. operations of a company claiming injury from foreign competition, even if that company is multinational. In addition, temporary protection for injured companies will be extended to eight years from five.

The bill hands the authority to waive mandatory retaliation against unfair trading practices to the U.S. trade representative, an executive branch official appointed by the President.

Timetable for Complaints

The trade representative will operate under a strict timetable in judging the merits of complaints by U.S. companies about unfair foreign trading practices. The bill adds new grounds for “unfairness,” including “export targeting” by Japanese companies and alleged violation of “worker rights” abroad.

The bill will also set up a new program for supporting and retraining workers who lose their jobs to foreign competition. This entitlement, whose estimated first-year cost is $400 million, will be partly financed by a new 0.15% duty on all imports.