Revolutionizing finance and freeing the export trade
The Reagan administration is clearly on target in seeking to ease those laws -- and practices -- that restrict US trade abroad. The administration is particularly eager to modify the Foreign Corrupt Practices Act of 1977. This "post-Watergate" legislation was designed to check illicit payments by US business officials seeking to win sales abroad. While it could hardly be considered in the public interest to end restrictions forbidding such blatant payments -- which in effect add up to "payoffs" -- there are other aspects of the legislation that warrant legislative review.
Enforcement jurisdiction under the law, for example, is currently divided between two agencies, the Securities and Exchange Commission and the Justice Department. Thus a firm seeking to sell goods abroad must take into account two separate legal agencies, each with its own special administrative provisions and differing timetables about what matters are or are not urgent. Sen. John Chafee is proposing the dual authority be ended and the Justice Department be given full responsibility for enforcing the act.
Congress should carefully consider the Chafee proposal, as well as a second plan to grant more protection from criminal liability to top corporate officers who might be held accountable for the illegal actions of agents operating abroad. The accounting procedures under the act might also be ripe for simplification, a step sought by many businesses.
As noted by Senator Chafee in the Opinion and Commentary page of today's Monitor, Congress should also seriously examine present tax policies affecting US citizens working abroad. As he notes, the US "is now the only industrial nation that taxes income earned by its citizens working in foreign countries." The result has been the loss of a substatial number of jobs, both domestically as well as overseas, as firms either refrain from sending Americans overseas or, if they are already there, bring them back to the US. And too often the jobs are taken over by other nationalities as the Americans go home.
The Reagan administration would like to develop international agreements that would encourage US service firms -- such as engineering, banking, and transport companies -- to operate abroad. That makes good sense, since services now make up 65 percent of the US gross national product, yet they are by and large underrepresented in US exports.
In seeking ways to boost US trade, we would hope that the administration not overlook the possibility of setting up an overall cabinet-level Us trade office. Legislation to that end has been introduced in Congress over the past few years and would end the current fragmentation of trade policy among a number of federal agencies. The Reagan White House, with its strong managerial bent, would be an ideal administration to pull together trade policy under a more systematic structure.
America's worldwide trade is too precious an asset not to have the full attention of the nation's lawmakers. For the reason, the efforts of the new administ ration to expand that trade warrant widespread support.