US exporters struggle to stay competitive with strong dollar

Richard Lee recently saw a $14,000 contract slip through his fingers. A Norwegian bakery bought one of his packaging machines a few years ago, and wanted another. But Mr. Lee's prices were no longer competitive. The rise in the value of the dollar cost him the deal.

''I'm frustrated because the inflated dollar is something I can't control and yet we're devastated by its effects,'' said Lee, president of Econocorp, a packaging concern in Randolph, Mass. More than 50 percent of his business is overseas.

Lee and other exporters say the solution may be to trim the federal deficit and lower interest rates. But a small businessman can't continue to absorb losses while he waits for action on the deficit.

Exporters are clamoring for some short-term relief.

''There were something like 800 trade bills filed in Congress this year and nothing has moved. Nothing,'' says Charlotte Staelin of the New England Congressional Institute (NECI), a policy research group.

Why? ''Congress has not been able to develop a consensus,'' she says.

Ms. Staelin has conducted a series of hearings around New England this year to define the major trade concerns of labor and business and to develop agreement among New England congressional leaders about which issues to move on.

Success has proved elusive. Defining what exporters want is easy enough - bring the dollar's value down. If not that, then lower interest rates on loans, extend research and development tax credits, keep the tax advantages offered by the Domestic International Sales Corporations, commonly known as DISC, and loosen export controls. But Ms. Staelin failed to get congressmen to agree to act in unison on these points.

After the last meeting, held Monday, Ms. Staelin said, ''Two years ago, we held hearings like these then introduced a bill on acid rain that they all subscribed to. We are closer to a consensus on trade.'' But she notes, ''I don't think trade is as neat and tidy.

Ambassador William E. Brock, who spoke at the hearing, agrees.

Not only are exporters pushing for relief, but the auto and steel industry, among others, are looking for protection from a deluge of imports, said the United States trade representative.

''The pressure is higher than I have felt in my 22 years (in Washington) to do something to bail out any and all industries,'' said Mr. Brock. ''The protectionism pressure is even greater than when the recession was biting hard.''

The reason? The American recovery is leading the world and other nations are selling their goods here. ''The US is like a very dry sponge - we're soaking up everything we touch,'' said Brock.

Economists say that the cheaper imports are keeping inflation down but admit that is little comfort to an unemployed steel or shoe worker. Meanwhile,the trade deficit is growing to mammoth proportions.

With imports far in excess of exports, April's $29.7 billion figure marked the fourth straight month of record trade deficits. Figures for May won't be release until later this month. At the current rate, the 1984 trade deficit could reach a record $125 billion, according to economists. Brock says he doesn't expect improvement in the trade deficit ''until mid- to late 1985.''

But he remains firm on rejecting auto and steel import quotas. ''Protectionism is a government subsidy. No ethics justify a subsidy to an industry where workers make $25 an hour by those making $10 an hour - the average worker's wage,'' Brock said.

Time and again during the hearings, the trade problem was pinned on the deficit. Brock echoed exporter's sentiments: ''If we don't deal with the deficit , 10 years from now we won't be competitive with anybody.''

Ray Strata, president of Analog Devices in Norwood, Mass., offered one deficit-reducing strategy. He said budget expenditures should be placed under two categories: spending and investing. ''It's more important to be getting back more than what we put in.''

''We're now looking at a failure to attach as much importance to economic development as to defense . . . It should occupy the highest priority,'' Mr. Strata said.

Richard Lee of Econocorp agrees that Americans need to value trade more highly. ''The problem is attitudinal. Overseas, people in the street are more cosmopolitan than Americans. Our leaders react to local constituents - that's why we're here. . . . The solution finally will be the pressure of people in the US on our lawmakers.''

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