Senate Democrats tried yesterday to tie an industrial policy wing to President Reagan's trade reorganization bill, asserting that creating a new trade department does not go far enough.
"Major changes are needed to meet the challenges of an increasingly competitive world," said Sen. Thomas F. Eagleton (D-Mo.) at a Senate Government Affairs Committee meeting in which he pushed for "equal recognition between trade and industrial health in the bill."
"The industrial side has been somewhat ignored," said Eagleton, the ranking minority member, who requested the added hearings before the bill creating a new Department of International Trade and Industry (DITI) is passed on to the Senate floor later this month.
But the committee chairman and prime sponsor of the bill, Sen. William V. Roth (R-Del.), appeared unwilling to accept industrial policy as a function of DITI. "Industrial policy is a political decision that will be resolved in the next presidential election," Roth said.
Industrial policy has become a buzzword for Democratic presidential candidates as a way to solve what they see as major structural problems in the economy. The Reagan administration has opposed the concept, labeling it an excuse for government intervention in what should be a free-market economy.
Nonetheless, Rep. Don Bonker (D-Wash.), chairman of the House Foreign Affairs subcommittee on international economic policy and trade, is likely to rewrite the White House bill to include an industrial policy component.
Eagleton said the DITI bill should include some tripartite mechanism--such as an Economic Cooperation Council or a National Industrial Strategy Board--to institutionalize cooperation between labor, business and government to replace the current competitive atmosphere.
Former senator Adlai E. Stevenson, now a Chicago lawyer, agreed in testimony yesterday that DITI needs industrial policy. But he warned that a tripartite organization could work against the public interest by providing a mechanism for labor and industry to use their joint political clout to push through quick-fix protectionist or bail-out measures.
Stevenson suggested instead an institutional way to shelter politicians from that kind of pressure, and said any trade relief in the form of tariffs or quotas should include requirements for improving the efficiency of an industry. He also said an industrial policy should include antitrust law changes to allow cooperative research and development--which the Reagan administration favors--as well as government loans to help industries modernize.
He said he opposes government targeting of industries--picking winners and losers--which he said hampers industrial development and trade competitiveness.