On March 18, President Carter received a letter from an impressive but rather unusual coalition of senators that included George McGovern and Jesse Helms, Strom Thurmond and Edward Kennedy, Hubert Humphrey and James O. Eastland.
They appealed to Carter to impose restrictions on the importation of shoes, saying the foreign products are causing the American shoe industry to "bleed to death."
The letter carried 48 signatures, representing every ideological pigeonhole in the two political parties, every geographical region, and both the old boys and the new boys of the Senate establishment.
Carter rejected their advice but that is not necessarily the end of the matter. The elements for a new "protectionist" movement are present in the Congress today which, if they coalesce, could force the administration to get off the free trade bandwagon. The New Englanders have their shoe industry to preserve. Sugar interests stretching from Florida to Hawaii share similar concerns. Textiles and electronics are likewise threatened by a flood of imports.
Carter's special trade representative, the politican Robert Strauss, recognizes the potential problem and the dilemma it creates for the President.
"I have a bias," Strauss had said, "against anything that hits free trade, but I also have a bias against unfair (import) trade practices."
This conflict goes far beyond the immediate political concerns of Carter and Congress.It engages the great corporations and law firms, labor unions and farmers, retailers and consumer lobbies. It has divided the federal bureaucracy and has caused serious concern in capitals around the world.
The stakes are enormous. About $233 billion changed hands last year among the United States and its trading partners. For some sectors of the American economy, this trade wa s highly profitable business. Agriculture, aircraft makers, computer factories, heavy machinery and chemical plants ran up a $30 billion trade surplus. But for other industries, the reverse was true. Imports of automobiles, steel products, textiles, footwear and electronic products exceed exports by more than $10 billion.
Foreign manufacturers now monopolize the American market for radios and tape recorders. They produce 90 per cent of the black and white and more than 40 per cent of the color television sets sold in this country.
Nearly half the shoes sold in the United States are produced abroad. Textile and steel imports are rising.
There is a very significant human side to all this. Exports create jobs for a substantial part of the American labor force; Strauss puts the number at 9 million. But the flood of imports has wiped out thousands of jobs as well, 150,000 in textiles, according to union estimates.
Most of the displaced shoe workers were women in rural areas, many of them middle-aged. Their earnings were modest - an average of $123 a week. But most of them had no other skills, no other job opportunities.
"Talk to a 59-year-old Franco-American shoe worker in my state who has lost his job," says New Hampshire's Sen. Thomas Mclntyre. "What do you say to him, that he's got to become a plumber now?"
Hundreds of companies have simply disappeared. In the electronics industries for example, there were 27 producers of television sets in the United States in 1960. Today there are only [WORD ILLEGIBLE] and four of those are foreign-owned.
Allen W. Dawson of Corning Glass, which makes parts for U.S.-made TV sets, speculated about the future in an interview with a writer for Saturday Review: "When you superimpose the color-television curve (of imports) on previous curves, it doesn't take much imagination to realize that in a very short time there won't be any color television (production) in the United States at all.
". . . . When we lost radios, television was coming on. When we lost black and white TV, color was there. Now there's nothing else left."
It is concerns of this kind that have brought together the Kennedys and Thurmonds of the Senate in an effort to provide some kind of protection for American companies and American workers. The issue unites labor and management in affected industries and has become a major crusade of the AFL-CIO.
Lane Kirkland, the federation's secretary-treasury, denounced Carter last week for his decision, saying "the shoe industry was served up on that holy altar of free trade. The President rejected a recommendation by the International Trade Commission that shoe imports be restricted following a unanimous finding of serious injury to the industry.
"As the lead case, this decision raises the question of others: if the gross and compelling problems of the shoe industry fail to draw a sympathetic response from the President, what will? Or is there a new criterion whereby an industry which has suffered so long and so badly and lost so many workers as to become politically as well as economically cripped, may be pushed all the way down, the chute, while others with more voting and lobbying strength still intact may receive more favorable attention?"
From Kirkland, from his allies in industry and the Senate and from the International Trade Commission (five of whose six members came out of the congressional mileu), a picture emerges of an embattled American economy faced with substantial damage or destruction from foreign competitors paying low wages (47 cents an hour in Korea) and enjoying the fruits of their own governments' restrictive trade policies.
From other principals in this struggle, however, quite a different picture is drawn. Strauss talks of the 9 million jobs created by the export trade. Sears, Roebuck and other huge retail chains talk of the savings to consumers from imported goods. Retailers, for examples, estimate that import restrictions recommended by the trade commission and the 48 senators would cost consumers - especially in low income groups - about $500 million a year. Sugar import quotas, according to the commission, would produce $660 million to $880 million annually in added consumer costs.
From his perch in the Treasury Department as assistant secretary for international affairs, C. Fred Bergsten is a major influence on the Carter administration's trade policies. He is lyrical on the virtues of free trade.
"Our trade potential to the rest of the world," he says, "is frightening.
We are incredibly competitive. Without our oil payments ($35 billion to $40 billion anuually to foreign producers) our trade surplus would be so huge it would be embarrassing."
The numbers, as he says, are impressive. U.S. sales abroad last year were valued at about $114 billion. Imports were valued at about $119 billion but that included $30 billion for oil. So the favorable balance on agricultural products and manufactured goods was more than $25 billion.
That is why Bergsten and virtually all economists think a protectionist policy would be foolhardy for the United States. They concede that some industries - shoes, for example - are imperiled and may need transitional help in the form of temporary import restrictions or government financial assistance. But they are freetraders to the core, and their philosophy is dominant the Carter administration today.
They are supported in that view by the major financial institutions and by giant industrial concerns, even in "threatened" industries in some cases. Some of the major U.S. television producers have faced the new facts of life by building plants in countries with low labor costs to produce "imports" for the U.S. market. RCA, Zenith an dPhilco-Ford, for example, are all building TV sets in Taiwan. Plymouth builds its Arrow cars and Dodge builds its Colts in Japan.
The result is that the shoe makers, some of the textile companies, some of the electronic firms and sugar producers are out of the mainstream of American business thought. They must seek allies among the labor unions and in Congress in an effort to put together a coalition of votes to force Carter to give them relief in the form of higher tariffs or import quotas or both.
McIntyre of New Hampshire will make an effort this month to create that coalition.
"We shouldn't take this lying down," he says. "We've got to count noses. We've got to get together."
Bergsten, on the other hand, sees political forces at work in the country that transcend Senate coalitions. The biggest of these, he says, is an American public opinion that is more concerned about inflation than about unemployment, an opinion that equates imported goods with lower prices, an opinion which, in the final analysis, is strongly supportive of free trade.