The emerging trade debate: stoking the protectionist furnace

CONGRESS-watchers should be observing with fascination and apprehension the current race to see whether the Senate or House of Representatives will be the first to enact protectionist legislation this fall. It's fascinating to see how trade has been transformed in only a few weeks from a smoldering brush fire to a full-fledged forest fire. Senators and representatives alike are clamoring for enactment of a trade bill.

Apprehension is in order because trade legislation offers great potential for mischief. Congress often legislates badly when trying to deal quickly with subjects as complex as trade.

How did trade reach the congressional flash point so fast?

The starting point is that protectionist pressures have been building steadily in the country and Congress for some years -- a product of rising imports and lost American jobs. The overvalued dollar -- fed by fiscal deficits and high interest rates -- has done its job well.

Then, in August, along came a special election in the First Congressional District of Texas. By all accounts, trade was a key issue. Edd Hargett, the heavily favored GOP candidate, allowed as how he didn't see what imports had to do with jobs in north Texas. Mr. Hargett lost the election and made a powerful impression on the minds of politicians in both parties.

Three weeks later, President Reagan denied import relief to the domestic shoe industry, thereby signaling that American companies and workers under import attack could expect little help from his administration.

The combination, I believe, triggered the current rush toward enactment of protectionist legislation.

Democratic strategists see trade as the issue that can carry Democrats to electoral victory next year. Republicans fear the Democrats may be right. Hence, the unseemly race to see which party will act first on trade legislation.

Senate Reublicans have vowed to bring trade legislation to the Senate floor within weeks, with (preferably) or without the cooperation of President Reagan.

In the House, the highly restrictive Jenkins bill, which would cut textile and apparel imports by 30 percent, could be on the House floor as early as this week under a procedure that allows no amendments and only 40 minutes of debate.

More general (and restrictive) trade legislation is certain to follow in the House. Dan Rostenkowski of Illinois, chairman of the House Ways and Means Committee, is under enormous pressure from his Democratic colleagues to drop tax reform from his committee's agenda in favor of immediate action on a comprehensive trade bill.

In the meantime, the Reagan administration is doing some rushing of its own, trying to put together its own trade bill, which it hopes Senate Republicans will buy as a firebreak against the spreading protectionist flames. President Reagan will outline his new trade policy proposals to the nation tonight.

One can only hope that someone declares a truce so that all sides can regroup. Otherwise, Congress is likely to enact before Thanksgiving a trade bill it will live to regret having passed.

A trade bill passed in the current superheated atmosphere will almost surely be a hodgepodge of provisions designed to protect specific industries. It almost surely will violate GATT (the General Agreement on Tariffs and Trade) and invite retaliation from our trading partners.

Further, it will almost surely fail to deal with two key questions of trade policy:

What to do to relieve injured industries, workers, and communities from the torrent of fairly traded imports.

What to do to bring the dollar back into alignment so as to reduce the flow of injurious but fairly traded imports.

These matters, as well as the obvious one of unfair trade practices by our trading partners, must be a part of any effective trade legislation package.

No, now is not the time for Congress -- especially Democrats in the House -- to pass a trade bill. Trade can be a good issue for Democrats in 1986, but not if the House passes hastily drawn, ill-conceived, counterproductive legislation in 1985. The Democratic trade response must avoid instant political gratification at the expense of serious treatment of the issue.

The House leadership would be well advised to follow its original schedule and do tax reform first. There will be plenty of time later this fall to discuss trade, to hold extensive hearings, to cloister Ways and Means Committee members for a review of the broader implications of trade policy, and to write a bill that will represent a responsible middle ground between knee-jerk protectionism and the doctrinaire free-trade-at-any-social-cost policies of Ronald Reagan.

Rep. Don J. Pease (D) of Ohio serves on the House Ways and Means Subcommittee on Trade.