An alliance of U.S. business and farm organizations yesterday called on Congress to tone down a trade bill that is nearing final vote, saying its tougher measures could touch off a cycle of retaliation that would worsen the nation's economic troubles.
The healthy growth in U.S. exports in recent months is the key to reversing the country's trade deficits, members of the "Pro Trade Group" told a news conference here yesterday. They said the trade bill as worded could cut deeply into that growth by prompting angry foreign responses.
"We are very anxious that Congress avoid the kind of legislation that would legitimize countries closing the markets where our exports are penetrating," said William Lilley III, president of the American Business Conference.
Timothy L. Elder, manager of governmental affairs for Caterpillar Inc., the Peoria construction equipment maker, said his company is enjoying a boom in foreign sales and has added 2,200 jobs at U.S. plants in the last six months. "The factories in Peoria are humming," he said at the news conference. "We're just beginning to wonder if ... now is the time to change the rules of the game."
U.S. companies that sell foreign goods and those that rely on foreign suppliers for manufacturing components are also active in the group. They worry that the bill would disrupt the flow of imports they need to prosper and, in some cases, to produce goods for export.
The bill, now in conference between the House and Senate, would broaden the White House's authority to get tough with trade practices perceived as unfair, tighten penalties and, in some cases, require retaliation against offending countries. With trade a major issue in the presidential race, the bill is receiving broad support.
But critics contend that however politically appealing action of this sort might be, unfair practices are not the real issue. By most estimates, they note, only a small amount of the total U.S. trade deficit, which was $159 billion in 1987, is traceable to them. (Some estimates run as high as about 20 percent).
The bill, they say, could spark a storm of litigation in this country that could paralyze trade and goad governments abroad into action against U.S. goods in their markets. That would cut into U.S. exports which, with the aid of the dollar's drastic decline since 1985, surged 12.2 percent in real terms in 1987. It would also deny needed imports in this country.
Even American-made steel is selling better abroad these days. The American Iron and Steel Institute recently reported that exports of steel mill products rose to 1.129 million tons in 1987, compared to 929,000 in 1986.
The National Grange, an agricultural organization active in the group, argues that the bill could disrupt farm exports, which is one of the few trade sectors in which the United States has continued to export more than it imports. "Retaliation is real," said National Grange legislative representative Mark Nestlen. "It's not a wolf cry."
The Pro Trade Group praised elements of the bill that would increase negotiating authority in international talks, promote exports and tighten protection of U.S. patents and copyrights.