The Reagan administration will release a long-awaited trade policy statement today supporting a survival-of-the-fittest philosophy toward ailing industries except when national security is at stake.
The statement will mark the administration's first attempt to outline a trade policy following its controversial decisions urging quotas on imports of Japanese cars to help U.S. automakers and providing assistance to the domestic shoe industry.
On numersous occasions the administration had said its supports a free-trade philosophy despite the Japanese auto decision, and the trade policy expected to be announced today primarily relies on market forces rather than bailouts to help financially crippled industries competing with imports.
But two Republican senators said yesterday that the policy is vague enough to permit the administration to get around its free-trade stance when it is politics as usual?" one of the senators asked. An administration source characterized what two senators called vagueness as "flexibility."
An advanced text of the policy was made available to reporters yesterday, and the policy is expected to be announced in congressional testimony today by U.S. Trade Representative William E. Brock. But ground rules set by congressional sources prevented the document from being quoted directly.
Brock is expected to say the new trade policy will take into account the economic vitality of some domestic industries when national security is at stake. However, where other countries have a natural competitive advantage, the domestic industry either must improve on its own or shift to something else, the Brock statement said.
While the administration will continue to review regulations that hamper business and to provide some assistance to severly affected firms and workers, for the most part ailing industries will have to rely on market forces, the statement said.
The two senators said yesterday that the administration had followed an inconsistent trade policy, but its new attitude is that "if an industry is dying, let the free market take care of it."
The senators, both from large shoe-industry states, denied that they lambasted the report because Reagan last week refused to extend quotas on shoes imported from Korea and Taiwan while urging the Japanese to restrict their car exports.
But they said the two decisions showed the administration's confused trade policy. For example, the International Trade Commission, charged by law with advising the president on specific trade issues, recommended paths the president did not follow -- partial extension of the shoe quotas and no relief for the auto industry.
Import restrictions, subsidies and other meausres contrary to free trade should be avoided, Brock is expected to say.
Little was said in the Brock statement about East-West trade. Administration sources have said that subject will be discussed later. The policy paper said U.S. officials will continue trade with controlled-market economies and develop ways to deal with them.
Another priority will be developing responses to foreign governments subsidizing their industries, following up recent warnings by several high-ranking administration officials against what they called an impending export-subsidy war.
The adminstration will attempt to renegotiate existing international rules on exports credits, reduce subsidies and bring export credit rates up to market levels, the Brock statement said.
In other areas, the administration said a high priority will be to reduce or end export disincentives such as the taxation of Americans employed abroad, the Foreign Corrupt Practices Act and other export regulations and controls. The Commerce Department also will attempt to strengthen the foreign commercial service, the statement said.