House Democrats, claiming a large measure of credit for pushing President Reagan to attack the large trade deficit, yesterday proposed the broad outline of trade legislation that attacks unfair trade practices and ties a new round of global trade talks to an international monetary conference.
In an apparent attempt to avoid being labeled the party of protectionism, the proposal avoids offering trade relief to specific industries.
"We are happy, as Democrats, that we have made the president stop sitting still and got him to do something on trade," said Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.) as he unveiled a "Democratic Program on Trade."
Rep. Don Bonker (D-Wash.), chairman of the special Democratic trade task force appointed by O'Neill and House Majority Leader Jim Wright (D-Tex.), called his party's initiative "far more detailed and comprehensive" than trade packages put forward by either the White House or House Republicans.
"We're trying to compose a responsible course between the 'free trade at any social cost' policies of Ronald Reagan and protectionism," said Rep. Donald Pease (D-Ohio).
Rep. Tony Coelho (D-Calif.) said the proposal is certain to win quick approval from the House Democratic Caucus, which is trying to develop trade as a political issue for the 1986 congressional elections. Coelho, head of the House Democratic Campaign Committee, said O'Neill has put trade legislation on a fast track, which means an actual bill following the outlines of the task force's program will be drawn within weeks. But Bonker said he doesn't expect any action on the proposals until next year.
In a Capitol Hill press conference, the House Democrats laid the blame for record trade deficits, expected to reach $150 billion this year, on Reagan's economic policies, which they said caused a $200 billion budget deficit and a vastly overvalued dollar. They said the trade deficit has cost 350,000 U.S. manufacturing jobs this year.
They also accused the president of ignoring the trade issue until it became a political hot potato that threatened Republican control of the Senate.
The president "panicked" and embraced trade only after it became a political issue in Congress, said Coelho.
"The White House is dealing with the politics of the problem, not the substance," added Bonker.
The Democratic initiative is broad enough to encompass a bill introduced this summer by Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.) and Rep. Richard A. Gephardt (D-Mo.) that would impose a 25 percent surcharge on countries with large trade surpluses who maintain barriers to U.S. products.
A key portion of the Democratic proposal is its emphasis on lowering the value of the dollar so American products will be more competitive abroad and foreign goods will cost more in this country. The Democrats said Reagan's request for negotiating authority for a new global round of trade talks should be linked to a requirement that he call an international monetary conference, which has support from France and among developing nations.
"We strongly feel there is a need for a new Bretton Woods," said Rep. Stan Lundine (D-N.Y.).
The Democratic initiative also embraces the concept of a balanced budget within five years to ease pressure on interest rates. "There's no easy way to address the trade problem without addressing the budget deficit," said Rep. Bill Alexander (D-Ark.). The leaders said, however, that this was not an endorsement of the Senate-passed proposal requiring a balanced budget in five years.
While the proposal offers no trade relief to specific industries, it increases the president's powers to deal with trade practices such as all-out efforts to dominate a U.S. market; expands the definition of subsidies to include natural resources sold at a lower price to domestic manufacturers than internationally, and insists on reciprocal access.
"There's something about America's sense of fairness that makes this a political imperative" even though unfair trade practices account for a small proportion of the total U.S. trade deficit, Bonker said.
Other parts of the proposal call for increased adjustment assistance for workers who lose their jobs because of imports, which the Reagan administration consistantly has opposed, and the establishment of a $500 million fund -- $200 million more than the president wants -- to combat subsidized export financing.
In another development yesterday, wheat industry officials said a 50 percent drop in exports will cost 46,000 jobs on top of 43,000 jobs that have been lost since 1981 in farm-related industries.