The Senate agreed last night to force the president to impose import restraints to help U.S. industries injured by surges of foreign products.
By a 55 to 41 vote, the Senate defeated an amendment to its 1,000-page trade bill that would have retained the president's power to overrule recommendations of the International Trade Commission calling for either tariffs or import quotas to help domestic industries.
"We are not talking about trade policy. We are talking about the presidency," said Senate Minority Leader Robert Dole (R-Kan.), a candidate for the Republican presidential nomination.
He said "the bottom line in this debate" is that it is "wrong to curb presidential power."
The action puts the Senate into direct confrontation with President Reagan. Presidential trade advisers have said that the amendment's inclusion in the trade bill would likely draw a veto.
The action came after a long day and night of debate that produced just one vote on a major issue. Nonetheless, Senate Majority Leader Robert C. Byrd (D-W.Va.) tried to push the chamber into completing action on the trade bill by the end of the week.
The amendment, spearheaded by Sen. Bob Packwood (R-Ore.), had the strong support of export-oriented industries and farm groups, which feared they faced retaliation from countries whose sales in the United States were curtailed as a result of trade relief for U.S. industries.
But industries hurt by imports -- especially shoe manufacturers, steelmakers and textile companies -- opposed Packwood's changes.
The debate concerned Section 201 of U.S. trade law, which allows industries hurt by fairly traded imports to gain temporary import relief so they can regain their strength and become competitive. This kind of import relief is sanctioned by the international compact the governs world trade, the General Agreement on Tariffs and Trade.
Reagan has granted relief to the motorcycle, specialty steel, carbon steel, and shakes and shingles industries. But in 1985, he refused to follow an ITC recommendation to grant import relief to domestic shoe manufacturers. This led to congressional and industry pressure to remove presidential discretion to overrule an ITC recommendation for trade relief.
"The current law is dead, and I think this amendment would bury it," said Senate Finance Committee Chairman Lloyd Bentsen (D-Tex.).
But his fellow Texan, Sen. Phillip Gramm (R), called the current law "raw, simple, rotten protectionism," and said the Senate faces "a choice between the raw political power of the past and the economic promise of the future."
The issue pitted Bentsen, who said the legislation couples the cut in presidential power with tougher standards for industries to qualify for import relief, against Packwood, the ranking minority member of the Finance Committee. Packwood said the committee-passed bill "risks our most competitive industries... in order to protect industries that cannot compete."
Packwood criticized the legislation for "taking away the president's right to decide if granting trade relief is not in the general public interest. Without that escape clause, there could be retaliation against some of America's most efficient industries."
Under the committee-passed bill, the president can decide against allowing trade relief if it would hurt America's national security or make other industries that depend on the protected product less competitive.
But Sen. John Heinz (R-Pa.), who opposed the Packwood amendment, accused the Reagan administration of encouraging foreign governments to threaten retaliation.
Bentsen argued that the bill will lead to less protectionism, not more, as its critics have charged, because "it helps smooth the transition for less-competitive industries."