High-level administration trade officials yesterday said they support the spirit of a House bill aimed at opening foreign markets to U.S. telecommunications equipment, but oppose provisions forcing the president to retaliate if talks aimed at persuading other countries to remove barriers fail.
Bruce Smart, undersecretary of Commerce for international trade, said that a House telecommunications trade bill introduced this summer is helpful to the extent that it focuses on opening markets in other countries rather than protecting U.S. industries. But Smart said other provisions in the bill "pose significant problems."
"International trade negotiations usually require a subtle mixture of incentives, as well as threats, to be successful," said Assistant U.S. Trade Representative S. Bruce Wilson, who also testified. The bill "could lead us down a dangerous path, without the ability to extricate ourselves," he said.
"A major concern is that the bill would, in effect, require the president to take retaliatory action of some kind regardless of other factors that may come into play," Smart said.
The administration's viewpoint was attacked by the bill's cosponsors, Rep. Timothy Wirth (D-Colo.) and Rep. James Florio (D-N.J), and other members of Congress, who said it reflected the administration's policy of inaction in the face of a mounting telecommunications trade imbalance.
A telecommunications trade surplus of $1 billion in 1980 has been transformed into a current deficit of $608 million.
"Tension over trade continues to grow," said Rep. Edward J. Markey (D-Mass.), a cosponsor of the Wirth-Florio bill who also has introduced his own trade legislation. "By now, the Reagan administration's record on trade is a well-publicized disaster . . . U.S. policy is out of control," he said.
"We've known about trouble in trade for five years -- yet nothing new has been suggested by the administration," said Rep. John Bryant (D-Tex.). "This is inadequate for those of us who go to our districts and find people without jobs. Ask whoever is not making policy to make some."
The Wirth-Florio bill, which enjoys broad bipartisan and industry support and 21 cosponsors, aims at opening foreign markets to U.S. telecommunications goods and services through negotiation. The bill does not specify which countries are its targets.
Under the provisions of the bill, the secretary of Commerce would be required to identify foreign countries that deny the United States the same access to their markets that the foreign countries enjoy in the United States. If a country denied access to U.S. products, the president could remedy the problem under existing trade law. A period of 18 months would be allowed for successful negotiations before any sanctions were imposed.
Both administration officials said any presidential action to increase duties or impose other trade restrictions could invite retaliation or a requirement to offer compensation under the General Agreement on Tariffs and Trade, a Geneva-based body that sets rules for world trade.
Smart said the administration could address trade problems through the plan unveiled by President Reagan on Sept. 23. The plan sets up a $300 million war chest to counter export assistance by other governments and toughens enforcement against unfair trade practices by U.S. competitors.
As part of the plan, President Reagan directed U.S. Trade Representative Clayton Yeutter to move against countries that illegally subsidize exports, dump products at below-market prices in the United States and close their markets to American goods.