The International Trade Commission yesterday recommended a sharp limit on shoe imports for the next five years and proposed for the first time that businesses be forced to bid for a share of the new quotas.
Four of the five commission members supported the recommendations, which would cut shoe imports by 35 percent, from 726 million pairs in 1984 to 474 million.
The ITC plan, intended to protect the domestic shoe industry, will be sent to President Reagan July 1 for final action.
The import restrictions would have the greatest effect on Taiwan, Korea, Brazil, Italy, Spain, Hong Kong and the Philippines.
Sales of quotas had been proposed in the past by some commission members to protect the beleaguered U.S. sugar industry. But yesterday's vote marked the first time that a majority of the ITC called for quota sales, which were authorized by the 1979 Trade Agreements Act, to help defend an endangered segment of U.S. business, said ITC counsel William W. Gearhart.
ITC Vice Chairman Susan Liebeler, the lone opponent of the commission's recommendation, said that consumers would wind up paying an additional $1.3 billion for shoes each year the quotas are in effect. She said that most of that money would flow out of the United States to foreign shoe companies, which would benefit from higher prices caused by scarcities.
Shoe retailers contended the quotas would cost consumers several billion dollars a year and save only a few thousand jobs in U.S. shoe manufacturing plants.
Opposing commissioners disagreed with Liebeler's figures but conceded that quotas would drain money from the U.S. economy. The auction plan is meant to return some of that money to the U.S. Treasury, but is not meant to benefit consumers per se, those commissioners said.
White House officials yesterday declined comment on the ITC vote. Under federal law, the president has 60 days from the time of receipt to act on the commission's recommendations. The proposals would be implemented within 15 days after presidential approval.
U.S. import quotas on shoes were last imposed in 1981 to limit the number and kinds of footwear products coming into this country from Taiwan and South Korea. Those quotas, in effect since 1977, ended after the Reagan administration declined to renew them.
But domestic shoe manufacturers and their supporters were confident yesterday that the Reagan administration is ready to accept import restraints on shoes. A U.S. trade deficit that could reach $150 billion this year -- including a 77.4 percent import penentration into the U.S. shoe market -- all argue for relief from foreign competition, the U.S. shoe manufacturers said.
The ITC's unanimous vote last May 22 that the domestic shoe companies were being hurt by foreign competition and the commission's majority vote yesterday recommending a remedy also bode well for favorable administration action, supporters said.
"The stronger the recommendations, the better the chance for victory at the White House," said Fawn Evenson, national affairs vice president for the Virginia-based Footwear Industries of America, which represents most of the nation's non-rubber footwear manufacturers.
Three of the five commision members asked that the proposed remedy be made retroactive to June 1. It would be in effect for five years.
The proposal does not affect shoes valued at $2.50 a pair or less -- a provision meant to keep low-cost imported footwear available for low-income consumers.
During the first two years of quotas, foreign manufacturers would be limited to annual U.S. sales of 474 million pairs of shoes. That ceiling would rise by increments of 3 percent for each of the remaining three years of quotas.
President Reagan, assuming that he approves the concept, would have to determine how the auction would work. For example, the president would be responsible for choosing a federal agency to conduct the auction.
"The licensing of quotas is an appropriate idea because it keeps the quota rents in this nation," said George Q. Langstaff, Footwear Industries of America president. But Langstaff and FIA vice president Evenson said that they are concerned that the commissioners may have given foreign manufacturers a big loophole by not placing a limit on the number of low-cost foreign shoes that can be sold in this country.
"The U.S. Customs people don't open up boxes and crates. This is all done with bills of lading. It's paperwork. If the paperwork says that this box contains $2.50 shoes, Customs accepts that. Almost anything can get through," Evenson said.