House OKs Bill to Fight Trade Barriers Against U.S. Goods : Legislation: The measure directs the White House to negotiate a yearly cap of 1.65 million Japanese auto imports. President Bush threatens a veto.
In an attempt to get tough with Japan, the House on Wednesday overwhelmingly approved a bill that would give the President renewed power to crack down on unfair trade practices and to pry open markets now largely closed to American goods. The vote was 280 to 145.
The measure includes a directive to the White House to negotiate a yearly cap of 1.65 million Japanese auto imports as part of an effort to lower Japan’s $43-billion annual trade surplus with the United States and to preserve American jobs in the auto industry. That provision was adopted on a 260-166 roll call.
The legislation--the most far-reaching trade measure considered by Congress in almost four years--also would restore “Super 301” authority for the President to investigate unfair trade practices, to negotiate the removal of foreign trade barriers and to take retaliatory action if negotiations fail to produce results.
While the President had these powers for two years after the 1988 Trade Act, the authority expired in 1990. The bill would give him those powers for a five-year period.
President Bush, however, has threatened to veto the legislation, if it also is passed by the Senate, on grounds that it would undercut world trade discussions and invite retaliation against U.S. exports.
Japan’s auto industry agreed last spring to a voluntary ceiling of 1.65 million exports to the United States this year, compared to 1.7 million cars and light trucks in 1991 and an average 2.3 million per year from 1984 through 1990. The legislation would make that voluntary cap mandatory.
“Enough is enough--trade has to be a two-way street,” Rep. Marcy Kaptur (D-Ohio), a leading supporter of the bill, said in debate on the House floor. Rep. Duncan Hunter (R-Coronado) agreed, saying: “You can’t pull out of this recession with a 62% operating ratio in the auto industry.”
Opponents of the legislation, however, called it an extreme measure that would interfere with free markets. They also said that the bill failed to recognize Japan’s move toward production of cars at U.S. plants--production that could be jeopardized by heavy-handed government interference.
“It’s largely a Japan-bashing effort, organized by the protectionists,” protested House Minority Leader Robert H. Michel (R-Ill.). If the bill becomes law, argued Rep. Phil Crane (R-Ill.), it will raise car prices and disrupt U.S. negotiations with Japan on a variety of trade issues. “We can’t afford to intimidate foreign investors in the United States,” he declared.
But advocates of the bill contended that the auto provisions--including a requirement that Japanese cars produced in the United States contain 70% American parts by 1994--would simply write into law an agreement that President Bush reached during his visit to Tokyo last January.
The bill also would require the U.S. trade representative to report to Congress once a year either that substantial progress has been made to reduce unfair trading practices or list steps that would be taken to resolve them. The executive branch would have broad discretion on whether to retaliate and what measures would be used, including tariffs and quotas on imports.
Another provision would require the trade representative to start investigations to see whether other nations are abiding by bilateral trade agreements when asked to do so by any interested party, such as an exporter or producer affected by the agreement.
While the bill is aimed primarily at the disparity in auto and auto parts trade between the United States and Japan, it also contains these provisions:
* Authority for a two-year extension of import limits on machine tools made in Taiwan until another bilateral agreement is reached on the issue.
* Requirement for an annual report on the agreement between the United States and the European Community limiting European government subsidies to Airbus, a manufacturer of commercial aircraft.
* Stronger restrictions against “dumping” of foreign goods by selling them in the United States for less than the cost of production.
The most emotional debate, however, centered on the depressed U.S. auto industry and Japan’s 30% share of the American car market.
Rep. Sander Levin (D-Mich.) disputed claims by U.S. Trade Representative Carla Anderson Hills that the United States is making progress with Japan on trade issues.
“The jobs are slipping away,” Levin said. “The U.S. should stop quivering in its boots.”
House Majority Leader Richard A. Gephardt (D-Mo.) said the European Community had imposed a ceiling on Japanese car sales unilaterally, rising from the current 11% of their market to 16% over the next five years. There are no limits in the U.S. market, he said, even though Japan virtually makes it impossible to sell American cars on its territory.
Taurus Gaining on Accord
The Honda Accord, the best-selling car in the U.S. both for 1990 and 1991, retained that spot through the first half of 1992, according to industry figures. However, Ford Motor Co.’s Taurus, fueled by fleet sales and generous retail rebates, is catching up. Here are the nation’s 10 best-selling cars and trucks:
Rank Make Number sold 1. Ford F-series pickup truck 224,068 2. Chevrolet C/K pickup truck 215,163 3. Honda Accord 191,684 4. Ford Taurus 181,189 5. Ford Explorer sport/utility 151,973 6. Toyota Camry 137,907 7. Ford Ranger pickup truck 136,956 8. Dodge Caravan minivan 128,415 9. Ford Escort 124,212 10. Pontiac Grand Am 120,059
Source: Bloomberg Financial Wire
