Clayton Yeutter, President Reagan's point man on trade issues, is in Washington's hottest seat. As U.S. trade representative, it is his task to yield just enough to satisfy Congress' demand that the administration "do something" to slow the loss of jobs as a result of import competition -- and still maintain free-trade principles.
It may be Mission Impossible. Confesses another Reagan official: "We promised Congress to send up some legislation of our own, but I don't know what we can give them that will change their minds. They know that our heart's not in it."
Leading congressional critics -- Republicans and Democrats alike -- agree: this Congress, for the first time since before World War II, will depart from a free-trade course. But they lay the blame on the president. "The administration just doesn't have a policy on trade, and Congress is acting in frustration," said Rep. Richard Gep- hardt (D-Mo.), coauthor of a bill that would slap a 25 percent charge on imports from Japan and other trade-surplus countries.
While home during the recent congressional recess, Gephardt said, "We had to talk to real live human beings who said to us, 'What are you guys doing (about the trade deficit)?' We just can't sit here and watch Rome burning."
Rep. Ed Jenkins (D-Ga.), the main author of the Textile and Apparel Enforcement Act of 1985, argues that by refusing to limit textile imports in the way that Europe and Canada have done, "they (the administration) left me no maneuvering room as a politician." Jenkins' bill, with 300 supporters in the House and 54 in the Senate, would slap more restrictive quotas on textiles than is now the case. It is an odds-on favorite to survive a veto.
Yeutter, who has been in the job only a few months, acknowledges that to stem antiprotectionist sentiment, the administration must give a higher priority to dealing with "unfair" practices of our trading partners than it has in the recent past.
"It is incumbent upon the administration to confront (unfair practices)," Yeutter said in an interview, "and confront them aggressively, decisively and comprehensively." This should be done because it is the right policy, not merely one to defuse protectionist sentiment in Congress, he insists.
On the Hill, the general view is that the administration -- as it did in the case of economic sanctions against South Africa -- has come forward with too little too late, seeking only to avoid an embarrassing political defeat in Congress. The real Reagan policy, Gephardt said, still is one of inaction.
The big question facing Yeutter is whether the protectionist damage can be contained with the Jenkins textile bill or whether -- having in effect conceded that the trade deficit has gotten out of hand -- the administration will be unable to stop a congressional roller coaster toward further and more generalized trade restrictions. These might precipitate a global depression, just as the Smoot-Hawley Tariff Act did in 1930.
The Congressional Budget Office says in a new study that the 25 percent surcharge bill that Gephardt, House Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.) and Sen. Lloyd Bentsen (D-Tex.) are pushing won't correct the deficit problem, but will damage U.S. and global economies.
In a conversation last week, Gephardt conceded that a surcharge is a crude weapon. He listed as the real causes of the trade deficit the inability of some American companies to match competition from abroad; faulty labor-management cooperation; an inadequate educational system in this country, and a $200 billion budget deficit that has resulted in an overvalued dollar that accounts for at least half of this year's projected $150 billion trade deficit.
But Gephardt says there is no other way of getting Reagan and his ideological advisers to focus on these problems: "Reagan is not leading the country (on the issue of the budget deficit). Now, Congress was not meant to lead the country on this kind of issue. If you think Congress will go for higher taxes, knowing that he will veto higher taxes and then say that 'it made my day' -- well, we're not going to do it."
But when Democrats focus on the trade issue, Gephardt said, it brings home "the failures of Reaganomics" in terms of jobs lost as a result of imports.
Republicans on the Hill don't doubt that, in these terms, the Democrats have latched onto an effective political weapon for the 1986 campaign. It's so potent that congressional leaders such as Senate Majority Leader Robert Dole are putting distance between themselves and the White House.
So even if Reagan and Yeutter are belatedly willing to make the effort to batter down other nations' unfair trade practices, it is doubtful that the protectionist steamroller on the Hill can be stopped.
I see a danger that to avert the worst legislation on the Hill, the Reagan administration -- whose actions have over the past four years been less pure than its rhetoric -- will itself drift further into protectionism. The rhetoric may be all that's left, if it doesn't tackle the budget deficit forthwith.