The Reagan administration yesterday warned the Senate on the eve of its debate on sweeping trade legislation that major sections of the 1,000-page bill would hurt the economy, cost American jobs and provoke retaliation.
The 34-page administration analysis, signed by 14 Cabinet members, landed on senators' desks as they were about to begin what promises to be a long debate on a bill designed to end five years of record trade deficits. Majority Leader Robert C. Byrd (D-W. Va.) said the bill will be brought before the Senate this morning.
But the Cabinet members argued that the trade deficits have begun to turn around as a result of administration policies over the past two years.
They said the deficit is starting to shrink from its high near $170 billion last year "and should continue to do so."
U.S. Trade Representative Clayton Yeutter, calling the Senate bill about 900 pages too long, said that many provisions of the legislation attack past trade problems instead of focusing on major causes of the imbalance, such as the high U.S. budget deficit and America's competitive position in the world.
"The legislation is designed for the economic situation that prevailed two or three years in the past and is no longer applicable to the situation today," Yeutter said in a breakfast meeting with reporters.
He called many of the provisions "unhelpful," and added, "they may even be harmful."
"Congress is closing the barn door when the horse is trying to get back in," added Deputy U.S. Trade Representative Alan Woods.
But Sen. Max Baucus (D-Mont.), a member of the Finance Committee that drafted key sections of the bill, called the legislation "very important," even though "it's not going to solve the entire problem." He said the bill signals a national awakening to a major problem and should be seen "as the first step among many that we are going to have to take as a country" to regain international competitiveness.
Despite their opposition to large parts of the Senate bill, administration officials maintained a low-key tone in the letter. Yeutter said this was part of a "conference strategy" designed to get the best possible bill out of both houses of Congress and to eliminate the worst provisions of both during the conference to reconcile the two versions. Yeutter said this makes it especially important to assure that the most objectionable parts of the House bill are not repeated in the Senate version.
"This bill will be written in conference," agreed Baucus.
The administration took particular aim at parts of the bill that force retaliation in unfair trade cases, limiting presidential flexibility to negotiate with trading partners. Sections to provide trade relief to industries hurt by import surges could provoke retaliation that would hurt U.S. overseas sales, the administration said.
The officials added that that the president should be allowed to consider "national economic interests" in refusing to give industries trade relief through either tariffs or quotas.
Other sections of the bill the administration finds objectionable would:Provide additional adjustment assistance for workers thrown off the job because of imports, with part of the financing coming from a tax on imports that Reagan officials said violates international trade rules. Change the definitions of unfair trade practices to make it easier for domestic industries to obtain relief, which officials said violates international trading rules and could provoke retaliation. Establish an oil-import ceiling that could lead to rationing or an import tax. This provision, sponsored by Senate Finance Committee Chairman Lloyd Bentsen (D-Tex.), has met with great opposition within the Senate -- including from key members of the Finance Committee such as Bob Packwood (R-Ore.), the ranking minority member, and Bill Bradley (D-N.J.) -- and is likely to provoke a major floor debate.