A federal task force has identified most of the problems but has not yet come up with many proposals to revitalize a program designed to help industries, workers and communities hard-hit by imports, administration economic officials will be told today.
The re-examination of so-called trade adjustment assistance was prompted by the problems of the shoe industry, which has claimed unfair competition from abroad - mainly South Korea, Taiwan and Brazil.
In an effort to avert a trade war, President Carter rejected an International Trade Commission recommendation to put high tariffs on shoes, and instead said he would try to work out voluntary quotas with South Korea and Taiwan. His program is due by July 1.
He also called for a complete re-examination and re-working if necessary of the adjustment assistance program. Industry and labor contend that it is a farce, calling it essentially "funeral payments" to industries and towns already too far gone to be helped.
The re-evaluation and reworking of the adjustment assistance program is being carried out under an inter-agency task force headed by Sidney Harman, Assistant Secretary of Commerce.
It is not only focusing on the general questions surrounding adjustment assistance, but it also trying to devise specific solutions for the shoe industry, informed officials said.
The shoe industry remains unsold on both the workability of Carter's voluntary quotas - called orderly marketing agreements in trade jargon - and on the effectiveness of whatever adjustment assistance program his administration devises.
If Congress does not like the solution, it can override the President and impose the high tariffs recommended by the International Trade Commission, a six-member body set up in 1974 to administer trade laws. It is a successor to the Tariff Commission.
Officials in the Office of the Special Trade Representative have been in South Korea and Taiwan in recent weeks trying to negotiate voluntary quotas on shoes. Trade officials said that Taiwan has been cooperative and that South Korea, which at first resisted any export agreements, has recently begun to talk seriously.
Shoe imports account for about 46 per cent of the U.S. market.Most of the large increase in recent years - 100 million pairs between 1974 and 1976 - came from Taiwan and South Korea. If the United States could not negotiate a voluntary agreement with South Korea it could impose a unilateral import limit.
Adjustment assistance - which provides financial aid to workers, communities and firms hurt by foreign trade - has long been considered ineffective by labor, business and many government officials.
Often the criteria by which firms or workers can be "certified" for help have proved so stringent that by the time they qualified any hope of recovery was gone. Because administration of the program has been far from perfect, critics contend, certification procedures took too long even when companies or employees qualified for aid.
Furthermore, business and labor have resisted adjustment assistance, always preferring the more direct route of import restrictions.
Officials said the task force - which will present its status report today to the loose-knit economic policy group headed by Treasury Secretary W. Michael Blumenthal - has yet to come up with many of the "nitty-gritty" solutions required by such a revamping.
For example, an official said, the report remarks the need for an early warning mechanism to identify troubled industries before they are badly hurt, but presents no proposals for constructing such a system.
Labor Department economists and officials from the Office of Special Trade Representative are also on the task force.
An official familiar with the status report said the group hopes to come up with a "customized approach to the shoe industry to determine to what extent, for example, improvements in technology may ease their import problems" by making the industry more competitive.
This official said that one approach to improving shoe industry efficiency might be adaptation of laser technology to cutting leather. Adjustment assistance funds might enable companies to add such technology and to train workers in using it.
But the task is far away from the specific proposals that will be needed to solve all the great difficulties in making adjustment assistance work.