Repeating pattern: as trade gap grows, so does weight on President to cut imports
Boston — ``We are in the act of recolonizing and dein-dustrializing the United States,'' grumbled Rep. Jim Wright (D) of Texas. The House majority leader, speaking in a Bank of Boston panel here this week, was complaining about the country's new debtor status and the flood of imports closing plants ``almost every day'' and costing some 5 million jobs.
Such a view is common in Congress, indicating that the Reagan administration's successful drive to launch another round of negotiations under the General Agreement on Tariffs and Trade (GATT) has not curbed protectionist pressures on Capitol Hill.
Indeed, on Tuesday the House was expected to pass a Senate version of the Textile and Apparel Trade Enforcement Act. It already passed its own, more limited version of the quota bill, 262 to 159, in October.
Mr. Wright said he did not expect the measure, broadened to limit imports of shoes and copper, as well as textiles and apparel, to pass with a sufficient majority to override an anticipated presidential veto.
This repeats a pattern of the last several years as the United States trade deficit has grown. Congress, annoyed with what it regards as unfair foreign competition, considers or passes protectionist measures. These pressure the administration to enforce existing trade laws more strictly or negotiate so-called ``voluntary'' trade restraints with foreign countries. At the very least, lawmakers can go back to voters and describe their efforts to save domestic jobs and businesses.
This pattern, though, has been somewhat altered by a new element, notes Doreen L. Brown, president of Consumers for World Trade. Some Democrats have picked up the trade problem as a campaign issue, charging the GOP administration with responding inadequately to the import threat. As a result, she says, the administration may be forced to compromise more than it might otherwise with special interests seeking help against foreign competition.
The latest merchandise trade statistics, released last week, show a deficit of $118.1 billion for the first 10 months of the year. Responding to such numbers, the administration has taken a three-pronged approach:
1. It has tried to drive down the value of the dollar. Since its peak in late February, the dollar has lost almost 20 percent of its value, on a trade-weighted basis, on foreign-exchange markets. This, economists say, should gradually reduce imports into the US and encourage American exports to some extent. Wright calls for a special international monetary conference ``to get the dollar down where the United States can live with it.''
2. The US has pushed for another trade round, hoping to forestall protectionist sentiments until a weaker dollar has time to trim the trade deficit to an acceptable level.
Last week, at the annual meeting of the GATT in Geneva, the US won agreement on creation of a special committee to draw up a detailed program for another round of talks. This panel, open to all 90 GATT countries, will start work next January and must agree on a negotiating program by mid-July for adoption at a ministerial meeting to be held in September.
3. Where political pressures are great or the trade situation particularly unfair, the administration has taken action to discourage imports or permit US exports.
The Reagan administration has initiated several so-called ``301 cases'' against protectionist measures of other countries, setting a deadline of last Sunday for results, threatenings retaliatory action if the results are unsatisfactory. These cases include Brazil's barriers against computer imports, insurance and the upholding intellectual property rights with South Korea, tobacco, leather, and footwear with Japan, and canned fruit and wheat subsidies with the European Community.
``There is no end to trade things for them to deal with,'' says Mrs. Brown. For example, coming up for renewal by next July is the Multifibre Agreement governing the import of textiles and apparel, produced in developing nations, into industrial countries.