Congress launched its bipartisan fall offensive on trade yesterday as the Senate Finance Committee approved legislation to open foreign telecommunications markets to American products and the House Ways and Means Committee attacked the Reagan administration for failing to bring down record trade deficts.
The vote by the Republican-controlled Finance Committee was the first congressional action since the lawmakers returned from their August recess determined to force the trade issue with the White House.
The bill, sponsored by Sen. John C. Danforth (R-Mo.), threatens stiff trade retaliation to Japan and other countries that fail to give American telecommunication companies the same opportunities to sell in their market that their companies have in the United States.
Danforth described the bill as a corrective measure to the opening of the massive U.S. telecommunications market caused when the court-ordered breakup of American Telephone & Telegraph Co. allowed foreign suppliers to pour telecommunications equipment into a market that had been the near-exclusive preserve of AT&T's manufacturing arm, Western Electric Co.
Meanwhile, at the opening of hearings on legislation targeted at four nations that have large surpluses in trade with the United States, House Democrats blamed the trade deficit squarely on President Reagan. Rep. Richard A. Gephardt (D-Mo.) attacked the president's "reckless borrow-and-spend economic policy" fostered by a "bystander president" who "winks at the high dollar and refuses to take the lead on bringing down his budget deficit."
Committee Chairman Dan Rostenkowski (D-Ill.) said congressional pressure has forced the White House to take a more aggressive stance on trade, including possible new legislation and tougher action against other nations' unfair trading practices.
The administration got little comfort from Republicans on the committee, who largely echoed the Democratic complaints. "I am embarrassed that the administration does not have a trade policy," said Richard T. Schulze (R-Pa.).
"I am concerned that the administration does not know what is going on," Schulze added.
He predicted that Congress would pass legislation, opposed by the administration, imposing a 25 percent surcharge on imports from four countries with large trade surpluses -- Japan, Korea, Taiwan and Brazil -- if they don't buy more American-manufactured products. Schulze said passage would be by a large-enough margain to override a presidential veto.
Gephardt denied the bill is protectionist, describing it as an "alternative" to free-trade or protectionist approaches that no longer work. He called the legislation "tough and pragmatic" and said "it seeks not to protect open markets but to open protected markets abroad. It demands that our trading partners open their markets to us as we open ours to them."
Before acting on that bill -- sponsored by Rostenkowski, Gephardt and Sen. Lloyd Bentsen (D-Tex.) -- Ways and Means is likely to approve legislation to sharply curtail textile imports. The textile bill is expected to be reported out this week by the Ways and Means Committee's trade subcommittee and to receive full committee approval next week.
The textile bill has a substantial majority of Senate and House members as cosponsors, and congressional leaders have predicted it will pass both houses this fall. It remains unclear, however, whether its support is strong enough to override an expected veto -- especially in view of the intensified interest in trade now being shown by the White House, which could win the president needed votes against an override move.
House trade specialists said the Rostenkowski-Gephardt-Bentsen measure is likely to move at a slower pace, held in reserve for broader action on trade after the textile issue is resolved and the administration has a chance to demonstrate the seriousness of its three-week-old trade policy.
"I think this Congress is going to develop a trade bill," Rostenkowski said. "There is a groundswell on the floor. I can't move anywhere in the chamber without somebody getting on my case about the trade imbalance."
Clayton Yeutter, the U.S. trade representative, said the administration's tougher stance on unfair trade practices should begin showing results within six months and predicted that the trade deficit, which is expected to reach a record $150 billion this year, is near its peak.
Also testifying at the Ways and Means hearing, AFL-CIO President Lane Kirkland supported the trade bill and welcomed intensified congressional interest on trade. But Eugene Milosh, president of the American Association of Exporters and Importers, said surcharge legislation invites retaliation from trading partners and will hurt the U.S. economy, business interests and workers.