All was sanguine on April 20, when U.S. Trade Representative William E. Brock assured key staff members at a luncheon that a major reorganization of America's trade apparatus was not imminent.
Two days later, Brock learned how wrong he was. On the eve of a European trip to prepare for the western economic summit in Wllliamsburg, Va., Memorial Day weekend, he found out President Reagan had made his long-awaited decision on trade reorganization: the Office of the U.S. Trade Representative (USTR) that Brock heads would be merged with more than half of the Commerce Department to form a new Department of Trade. Many of Washington's trade specialists fear the reorganization would sound the death knell for the USTR as a small, elite organization of experts in foreign trade.
To say the presidential decision upset the trade office, established by Congress in 1962 in an effort to weaken State Department control over trade policy, is an understatement.
Its staff is not complaining publicly, and has been told that the reorganization plan has the support of Brock and his two chief deputies. But some of its 130 staffers are telling friends in the Washington trade establishment--many whom are alumni of the USTR--that they feel they were blindsided by Commerce Secretary Malcolm Baldrige and his powerful White House allies, especially White House counselor Edwin Meese III.
Morale is reported to have plummeted and many people are concerned that the White House move will undermine the trade representative's authority in ongoing negotiations and give foreign governments a further excuse to "shop" between Commerce and the USTR for a better deal on their trade disputes.
The presidential decision came so suddenly and with so little notice that neither Brock nor his chief deputy, Michael B. Smith, were available for the White House briefing that announced the reorganization. That left the newly appointed second deputy, Robert E. Lightizer, standing next to Baldrige.
Needless to say, the commerce secretary did most of the talking; Lightizer was able to add only that Brock had joined Baldrige in issuing the statement.
There is a feeling, moreover, that the announcement was timed so that Brock would be out of the country and that a Friday White House decision was leaked to appear in the Monday Wall Street Journal to defuse possible moves to change the president's mind.
It is still unclear why the White House decision came out so suddenly. According to reports on Capitol Hill, most of the Reagan Cabinet opposed the reorganization with only Baldrige and Meese in favor.
Despite the private grumblings of his staff, Brock has remained a team player. He did not touch on reorganization in a prepared speech at a National Press Club luncheon last Wednesday, and answered questions about it in a low-key way.
Moving USTR into a new department holds certain advantages for the Reagan administration, especially if the president decides to run for a second term. It would transfer 130 positions from the White House staff, allowing the president to say he has cut the number of White House employes, along with the rest of the federal government.
Conversely, because USTR is part of the White House, it could not be beefed up to become a full-fledged trade agency since that would look like the White House staff was mushrooming under Reagan.
Meanwhile, the upper echelons of the office are in the midst of their own shifts.
Smith returned to Washington last month after serving in Geneva with the rank of ambassador and the title of deputy U.S. trade representative. He now will be in charge of all bilateral and multilateral trade talks, negotiations over the General Agreement on Tariffs and Trade and relations with three of America's major trading partners: the 10-nation European Economic Community, Japan and Canada. The White House is expected to nominate Peter Murphy, now USTR's chief textile negotiator, to the Geneva post.
Lightizer, just confirmed as the third deputy U.S. trade representative, had previously served as chief counsel of the Senate Finance Committee, which is chaired by Sen. Robert J. Dole (R-Kan.). Lightizer picked the trade post despite an offer from Transportation Secretary Elizabeth Hanford Dole, Dole's wife, to become DOT's general counsel.
He will be responsible for trade policy, and special sectors such as services, high technology, all industrial matters (auto, planes and steel) and agriculture and commodities.