Reagan Vetoes Bill Restricting Textile Imports

Branding it “protectionism at its worst,” President Reagan on Wednesday vetoed controversial legislation that would increase quotas on textile imports, saying it would threaten American jobs, raise prices and jeopardize prospects for increasing U.S. exports around the world.

White House spokesman Marlin Fitzwater said that the President is confident Congress will not override the veto. The bill, which would restrict imports of clothing and shoes as well as textiles, was passed in both the Senate and the House by majorities well short of the two-thirds needed to overturn a veto.

Even industry strategists are pessimistic about prospects for an override.

Fodder for Democrats

However, the veto could provide fodder for Democrats in congressional races, particularly in the South. Democratic presidential candidate Michael S. Dukakis has not taken a position on the bill, and Dukakis campaign spokesmen refused to comment. Like Reagan, Republican candidate George Bush had opposed the measure.

The action is the second time in three years that Reagan has rejected textile quota legislation. The President vetoed a less stringent bill in December, 1985, and Congress eventually sustained his action.

Reagan noted in his veto message that the United States already maintains almost 1,500 quotas covering about 80% of textile and apparel imports, with tariffs that average almost 18%, making textiles “the most protected sector of our economy.”

“There is no need for further protection from imports,” the President declared.

At the same time, the President signed legislation to put into effect the free trade agreement that the Administration signed with Canada last January. The pact, the most sweeping negotiated with any U.S. trading partner, would eliminate most trade barriers in 10 years.

However, the pact will not take effect until Canada formally approves it. And Liberal Party leaders in Canada are trying to sidetrack it by forcing the Conservative government of Prime Minister Brian Mulroney to make it an issue in a nationwide election.

Although Mulroney is a prime backer of the trade accord, he is expected to bow to Liberal demands later this week and call an election for Nov. 21. Opponents argue that the agreement would make Canada too economically dependent on the United States.

The textile industry reacted angrily to the President’s veto. Daniel K. Frierson, chairman of the Fiber Fabric and Apparel Coalition for Trade, the chief lobbying group for the bill, said that the veto “shows a callous disregard for workers whose jobs are being wiped out by imports.”

“We would have preferred that the (textile bill) become law with President Reagan’s help; now, it is in the hands of Congress to enact,” Frierson said. He asserted that the legislation “meets every test. It is fair. . . . It keeps American jobs in America.”

No ‘Justification’

However, the President--backed by most outside economists--contended Wednesday that there is “no economic justification” for the bill.

Reagan noted in his veto message that textile and apparel mills in the United States are enjoying high production levels, profits and export sales, growing employment and reduced import competition.

Tightening present quotas would only raise prices of apparel even more than they have jumped so far this year, he said, and “would break the clothing budgets of many American families.”

The bill, which cleared the House last Friday, would freeze imports of all categories of textiles and clothing this year at 1% more than their 1987 levels and limit future increases to 1% a year. Shoe imports would be held permanently at 1987 levels.

U.S. trade officials have warned that imposition of the quotas prescribed by the bill would violate international trade rules and would break up the Multi-Fiber Arrangement, the system of global textile quotas that the United States and 41 other nations have maintained for years.

The House passed the textile bill by a vote of 248 to 150. Approval in the Senate was 59 to 36.