Commerce secretary asks White House to loosen antitrust laws

By , Staff writer of The Christian Science Monitor

Commerce Secretary Malcolm Baldrige has formally proposed that the Reagan administration change United States antitrust laws in order to make American companies more competitive in world trade. In effect, his plan to repeal Section 7 of the Clayton Act would stop the Justice Department from blocking a merger that it felt would substantially reduce competition or create a monopoly. The burden would be on the government to prove that the public interest was being damaged by the combination, after a merger had taken place.

``To get structural readjustment'' in ailing industries you ``simply have to allow these kinds of mergers,'' Mr. Baldrige said Monday at a breakfast meeting with reporters.

The Commerce plan to revise antitrust laws was sent to the Office of Management and Budget Friday. That is the first step in coming up with a unified administration position and eventually drafting legislation.

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During the breakfast meeting, the Commerce secretary also said he was dissatisfied with Japan's unreadiness to discuss specifics in talks with the US aimed at opening up trade in telecommunications equipment between the two nations. As a result, Baldrige has postponed a resumption of talks on the subject, scheduled to take place this week in Tokyo.

``It wouldn't serve any purpose'' to talk before the Japanese were willing to deal in specifics, he said.

Telecommunications equipment is one of four areas in which President Reagan and Japanese Prime Minister Yasuhiro Nakasone agreed to hold talks aimed at opening Japan to US products.

The postponed talks began Jan. 29 and focus on the conditions under which US companies can sell equipment to the Japanese telephone company, Nippon Telephone & Telegraph. NTT changes from a government monopoly to a private company in April and thus the talks face an April 1 deadline, Baldrige noted.

The secretary also said that lax enforcement of regulations which, unless the government moves to prevent it, call for automatic declassification of federally sponsored studies after six years had enabled the Soviet Union to gain information of military value. He termed this situation ``very serious.'' Among other things, declassified US government studies helped the Soviets develop a cruise missile, he said.

Most Reagan administration officials have refused to speculate on the future of the dollar's value against foreign currencies, but Baldrige said he would make a ``fearless prediction'': He said that ``in the last half of the year'' the nation would ``start to see'' the dollar go down. The main reason, he said, would be a narrowing gap between the growth rates of US and European economies. Baldrige acknowledged that no agreement had been reached with the Justice Department, which enforces antitrust laws, regarding his proposal. ``I hope they are lukewarm'' to the change, he quipped.

J. Paul McGrath, assistant attorney general in charge of the antitrust division, said in a telephone interview that the Justice Department ``sympathesizes with helping out'' US companies in their efforts to export.

But he added, ``Section 7 as we have been enforcing it does not interfere with that in any way. What we have done is make it clear that the only mergers we would block are ones that create a real danger that prices would be artificially inflated. Obviously that kind of merger would hurt the American consumer and not make our companies more competitive.''

Mr. McGrath also dismissed the argument, advanced by Baldrige, that it is difficult for companies to know in advance whether a planned merger would cause the Justice Department to think it may lessen competition or tend to create a monopoly. That uncertainty, Baldrige argued, tended to hamper useful merger activity.

``I think things really are pretty clear,'' McGrath said. Last year, the Justice Department issued guidelines ``which spelled out as precisely as can be done what the enforcement program is,'' he said. He noted that Commerce concurred in the revision of the guidelines.

The proposed change in the Clayton Act would still leave in effect the Sherman Antitrust Act, which prohibits restraint of trade, price fixing, dividing up markets, or monopoly conditions. Federal Trade Commission rules against unfair competition would also remain.

But business would not be held back from merging by questions of how the Justice Department would interpret the ``may'' and ``tend to'' phrase in Section 7. The section prohibits mergers where the effect ``may be to substantially lessen competition or tend to create a monopoly.'' -- 30 --{et

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