Reagan Sanctions on Trade Expected : Hopes to Quiet Protectionist Mood in Congress, Administration Sources Say

WASHINGTON —  President Reagan, in an effort to defuse rapidly rising protectionist sentiment in Congress, is expected to unveil five “unfair trade” actions today against Japan, South Korea, Brazil and the European Common Market, Administration sources said Friday.

The moves all would be aimed at opening foreign markets to U.S. goods and services, rather than at directly helping American companies that are suffering because of import competition.

But there was little indication that the White House actions would be successful in stemming the flow of trade legislation on Capitol Hill, much of which is aimed at protecting battered U.S. manufacturing industries such as textiles and shoes.

“Democrats will continue to press for tough trade legislation,” Rep. Tony Coelho (D-Merced) vowed in a statement on the expected trade actions. “I fear today’s welcome news is the calm before the storm, because the record job drain overseas continues, due to the President’s lack of a fair trade policy.”

Still Discussing Actions

Reagan, in a brief meeting with reporters Friday at which he was expected to disclose the moves, instead said that trade sanctions were still “under discussion.” White House officials said that the announcement should be made today, possibly in Reagan’s weekly radio broadcast.

Part of the reason for the delay, one official said, was that not all of the affected countries had been informed of the proposed actions.

Reagan is expected to invoke a trade law--Section 301 of the 1974 Trade Act--that gives the President broad authority to investigate other nations’ barriers to U.S. products and to retaliate with tariffs and quotas against goods coming from such countries.

According to sources who spoke on condition that they not be identified, the White House is planning actions involving Japanese restrictions on imported cigarettes, South Korean prohibitions against foreigners’ writing fire and life insurance policies and Brazilian limits on computer imports.

The three cases would mark the first time that a President has filed his own complaints against allegedly unfair foreign trade practices, a step that was explicitly authorized by Congress in amendments to the trade law approved last year. At the same time, Reagan is expected to speed up action on two long-standing cases brought by U.S. companies--one related to Japanese quotas on imported leather goods and the other involving European subsidies to processors of canned fruit and raisins.

Although an international tribunal already has ruled in favor of the United States in both cases, the Administration has taken no action against either Japan or the Common Market. Reagan is expected to announce that he will retaliate shortly unless the restrictions on U.S. exports are eased.

No Action on Taiwan

For now, the White House has decided against bringing a case that was recommended by a Cabinet-level advisory group involving copyright and patent violations in Taiwan, sources said.

The expected actions grew out of Reagan’s decision last week not to impose quotas or higher tariffs on imported shoes, as recommended by the independent U.S. Trade Commission after the industry blamed cheap imports for wiping out thousands of shoe industry jobs.

At that time, the President indicated that he would try to break down foreign barriers by using the trade laws more aggressively, but critics complained that he would be doing nothing more than relying on laws that he should have been enforcing all along.

Since the 1974 trade law was enacted, only 48 complaints have been filed under Section 301, according to Desiree Tucker, an aide to U.S. Trade Representative Clayton Yeutter.

Under the law, the Administration has up to a year to investigate a complaint--even its own--before reaching a decision. Nearly all the cases have been settled quietly through diplomatic negotiation between the U.S. government and the foreign country accused of unfair trading practices.

Clash Over Citrus

Earlier this year, however, the Administration moved to retaliate against the Common Market for limiting citrus imports from the United States by imposing a tariff on imported European pasta. The Europeans responded by threatening to slap tariffs on U.S. walnuts and almonds, and the dispute was resolved when the Common Market agreed to ease its restrictions.

On Thursday, Commerce Secretary Malcolm Baldrige told reporters that the Administration was on the verge of invoking Section 301 in several cases.

Baldrige declared that a handful of such actions could help reverse widespread protectionism abroad.