The House Ways and Means Committee defied the Reagan administration yesterday and approved a tough trade bill that would enlarge the scope of unfair trade practices and force presidential action on trade complaints.
The bill, which was passed on a party-line vote, also would impose quotas on imports from Japan, West Germany and Taiwan unless they end trade restrictions on U.S. sales or show sharply decreased trade surpluses. The provision, sponsored by Rep. Richard A. Gephardt (D-Mo.), passed by a 24-to-11 vote, with the support of one Republican.
The Gephardt amendment was a watered-down version of legislation he introduced last summer with Chairman Dan Rostenkowski (D-Ill.) and Sen. Lloyd Bentsen (D-Tex.) that would have included Brazil and Korea in the list of affected countries.
House Democrats hailed passage of the bill, which could go to the House floor within two weeks.
But Republicans, whose "gutting" amendments were beaten down throughout the three-day committee markup, attacked their Democratic colleagues for playing politics, and said the bill faces an almost certain presidential veto.
Just before the committee's Democratic majority approved the bill, it rejected a Republican substitute supported by Minority Leader Robert Michel (R-Ill.) by a 22-13 straight-party-line vote.
U.S. Trade Representative Clayton Yeutter and Commerce Secretary Malcolm Baldrige stopped short of threatening a Reagan veto, but said in a letter to Rostenkowski that the administration considers 15 major provisions of the bill "unsupportable."
An administration official at the markup said House Democrats have latched on to trade as the only possible issue they can use in the November congressional elections.
House Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.) has given trade priority and scheduled House action by mid-May on major trade bills, including the one that cleared Ways and Means yesterday and another passed Wednesday by the Foreign Affairs Committee.
The Republican-controlled Senate, meanwhile, may begin moving on trade legislation next week, taking up two bills aimed at Japan's growing trade surplus and other countries' closed telecommunications markets.
Rostenkowski challenged the Senate to move on trade so Congress can "awaken the administration to the fact that America now has no concerted trade policy."
Continued increases in the trade deficit, which was $2 billion higher in March than in February and which totaled a record $148.5 billion last year, are likely to fuel Democratic attacks on the trade issue.
Rostenkowski defended his committee's trade bill, which he said will "give the president some timely backing" at next week's economic summit in Tokyo. "It both warns our allies that the nation is serious in demanding free trade and stiffens the president's negotiating hand in the future," he said.
A leading Republican trade specialist, Rep. William Frenzel (Minn.), called the bill "a legislative joke" that is unlikely to ever become law.
"This is not a serious attempt at legislation," he said. "It's quite clear the Democrats chose to include by largely party line votes as many things as they could to infuriate this administration and subsequent ones."
Although committee staff members insisted the aim was not to produce protectionist legislation, the bill as approved would broaden the definition of unfair trade laws to make it easier for American companies to win inport relief from tariffs or quotas.
The bill, for instance, added the denial of "internationally recognized labor rights" to the list of unfair trade practices.
Among these labor rights are the right to organize and bargain collectively; acceptable work conditions, including a minimum wage and occupational safety standards; a minimum age for child labor; and bans on slave labor.
Another new unfair-trade tactic would be the practice by a country of targeting a specific industry to win export shares in the United States.
The committee also passed a natural-resource provision aimed at products made from natural gas and oil from Mexico and Saudi Arabia and timber from Canada. That provision allows trade remedies by U.S. companies if a government-regulated natural resource is sold to domestic industries at less than its fair-market value.
At the same time, the bill would force the president, with limited exceptions, to accept recommendations of the International Trade Commission for trade relief in unfair-trade complaints or cases where an industry says it has suffered injury from imports.
The Ways and Means Committee accepted provisions proposed by Rep. Robert T. Matsui (D-Calif.) mirroring legislation sponsored by Sen. John C. Danforth (R-Mo.) that is likely to be considered by the Senate next week.
The provision calls for trade retaliation against countries that limit sales of U.S. telecommunications equippment while selling their own products here.
On Wednesday, the House Foreign Affairs Committee completed its part of the trade package by approving legislation to increase export promotion and financing and to reduce restrictions on technology sales overseas. Rep. Don Bonker (D-Ore.) called the measure "an effective alternative to the president's inaction on trade."
Last week, the House Banking Committee passed its portion of the trade package, including a measure sponsored by Rep. Stan Lundine (D-N.Y.) to make it easier for debt-burdened Latin American nations to pay their bills by increasing the amount of money available for World Bank loans.
The committee also called for coordinated efforts to stabilize exchange rates and for a new system to keep them in balance.
All these measures are expected to be stitched together by the House Democratic leadership, headed by Majority Leader Jim Wright (D-Tex.), for presentation to the Rules Committee.