House and Senate conferees remained stalled yesterday on the highly contentious issue of controlling strategic exports to Soviet bloc nations after accepting a provision banning bank loans to the government of South Africa because of its racial policies.
If the conferees succeed in melding the two versions of export bills and the result is accepted by both houses, it will be the first time Congress has imposed economic sanctions on South Africa for its strict policies of racial separation.
Although marathon sessions Monday and yesterday erased major differences between the House and Senate versions of legislation extending the Export Administration Act, it remained unclear whether the conferees could agree on increasing the Pentagon's power to review overseas sales of strategic materials. The conferees will try again today.
The Senate has stood firm behind Sen. Jake Garn (R-Utah) in insisting on increasing the power of the Defense Department in export licensing and the Customs Service in enforcing export controls. The House has rejected that view in at least two votes during the conference.
"It's a game of chicken," said Rep. Don Bonker (D-Wash.), head of the House conferees. Garn, who did not attend yesterday's conference, sent word that he would not budge, while Bonker said he was holding firm to retaining Commerce Department authority over licensing and enforcing export controls.
Despite the gridlock on that issue, conferees hopes some compromise can be achieved before the session ends this week.
The Reagan administration opposes Garn, preferring to control export authority within the executive branch without legislation. The president already has used an executive order to increase the Defense Department's licensing authority on strategic exports. The Commerce Department, which would lose power to Customs and Defense under the Garn measure, has been working actively against the Senate bill.
Commerce Undersecretary Lionel H. Olmer said another section of the legislation approved yesterday that would restrict the president's power to apply export controls for foreign policy reasons "threatens" to draw a veto by the White House.
The conference on renewing the Export Administration Act, which expired Jan. 30, has dragged on since April. With adjournment just ahead, the conferees began to deal with some of the most contentious issues and reach agreements that could lead to a revised bill going back to the House and Senate for final approval.
Among the major sticking points were House-passed provisions setting sanctions on dealing with South Africa, which even one of their major supporters, Rep. Stephen J. Solarz (D-N.Y.), acknowledged were "extraneous" to the main thrust of the bill.
The Senate had no South Africa provisions in its bill, but Sen. John Heinz (R-Pa.), chairman of the Senate conferees, was under intense pressure by blacks in his home state of Pennsylvania to support some sanctions.
Solarz called the final agreement, which he and Heinz stitched together and got passed late Monday night, "a significant step forward."
"It's not as far as I would like, but way further than many of us thought possible," Solarz said.
Rep. William H. Gray III (D-Pa.), who led the fight for stiff sanctions on South Africa in the House, called the compromise "thin and slight," and said it omitted the most powerful economic and political penalties that the House wanted to impose.
The compromise agreement would ban all future U.S. bank loans to the government of South Africa and corporations it controls, including the country's national airline. Heinz said these loans currently amount to $350 million to $400 million, and 80 percent are short-term. Total U.S. loans to South Africa amount to about $4 billion, but most would not be affected by the sanctions.
Dropped from the legislation in the conference were bans on importing Krugerrands and other South African gold coins, a prohibition on all new investment by U.S. firms doing business in South Africa and the requirement that American It remained unclear whether the conferees could agree on increasing the Pentagon's power to review overseas sales of strategic materials.companies operating in South Africa adopt fair employment practices for blacks.
Instead of requiring fair employment principles, the conference agreed that the State Department should issue a yearly report detailing how American firms in South Africa treat their black employes.
Meanwhile, the conference softened provisions in both the House and Senate proposals that would have made it harder to export nuclear technology and services to countries that have refused to sign the Nuclear Nonproliferation Treaty. The bill also rolled back parts of the House bill that would have extended U.S. authority to control sales of American-made goods by foreign companies.