Reagan Moves to Give Congress Greater Role in ‘Competitiveness’ Issue

WASHINGTON — The Reagan Administration moved quickly Wednesday to make “competitiveness,” a dominant theme of the President’s State of the Union message, the touchstone of a detailed package of trade legislation expected to arrive on Capitol Hill within a few weeks.

Reversing last year’s policy of spurning as “protectionist” all congressional attempts to legislate trade policy, the Administration this year is talking bipartisanship and is preparing a trade bill that it hopes many Democrats will support.

In an effort to promote cooperation, the Administration plans to offer Congress a far more extensive role in the supervision of continuing trade negotiations as well as in their implementation. It also will support several features adapted from trade bills in the last Congress that Reagan previously opposed.

But, senior trade officials said Wednesday, the Administration still intends to resist any proposal aimed solely at protecting a troubled industry from foreign competition if there is no likelihood that industry can streamline itself and become more competitive.

Reagan and his top trade official, special representative Clayton K. Yeutter, also remain adamantly opposed to the push in Congress to limit the President’s discretion to delay or waive retaliatory import limits or tariffs in cases of unfair trade practices or in cases involving industries injured by foreign competition.

Speaking Wednesday in Los Angeles, Yeutter said the Administration wants to prevent “the parochial ‘let’s cut off imports’ approach, which is easy but not sound policy. Protectionism is clearly not the answer.”

He outlined highlights of Reagan’s proposed legislative package, which includes a proposal for a $1-billion program to help retrain displaced workers to cope with the changing economic environment, as well as an $800-million program for training young workers. The package also calls for a doubling of the budget for science and technology and the easing of some export controls on U.S. goods.

In Washington, officials who briefed reporters on condition that they not be identified set forth a detailed menu of trade proposals that is expected to be consolidated with other domestic policy proposals in a legislative package scheduled to be sent to Congress late next month.

In a major concession to congressional Democrats, the Administration will propose that trade balances be formally considered when the Commerce Department decides whether a foreign industry is engaging in unfair practices.

This means that, for example, that Japan’s overall trade surplus with this country and also the growing share of the U.S. market held by Japanese semiconductor makers would be considered in any unfairness complaint involving that country and industry.

Congress also would be entitled to formal reports on the progress of negotiations to resolve an unfairness complaint. And once a negotiated agreement was reached to provide greater U.S. access to another country’s markets, Congress would be entitled to regular reports on its implementation.

Competitiveness would also become a formal test in cases where an industry claims injury from foreign competition and goes before the International Trade Commission seeking tariffs or quotas to protect it from imports.

In the new legislation, the ITC would be directed to include, along with a finding of injury, an assessment of whether temporary protection would eventually lead to a more competitive industry--or simply encourage more inefficiency at great cost to consumers and taxpayers.

Trade officials said they believe that the U.S. motorcycle and specialty-steel industries--both granted temporary relief during the Reagan Administration--would have passed this test. But they believe that the U.S. shoe industry, denied protection in a politically controversial Reagan decision two years ago, would not have met the competitiveness test, they said.

By including that additional assessment, officials argued, an ITC recommendation for temporary protection for an industry is more likely to be granted by the President. Congress last year sought to make an ITC finding result in mandatory relief, barring the President from any role in such decisions.

The new proposal will also include a clause, earlier proposed in Congress, that would in effect direct the ITC to ignore the domestic business cycle in considering whether an industry is injured by competition. Thus, an industry found to be suffering from imports would not be denied simply because there is a general business downturn.

Adapting another proposal from the last Congress, the Administration trade bill would direct trade and agriculture officials to give the ITC an advisory list of perishable farm commodities sensitive to import competition. With this list, ITC researchers could be ready to act within 21 days in the case of an injury claim. The President would have another seven days to accept or reject the recommendation. At present, the ITC has six months to recommend and the President has two months to decide.

In another area, the Administration bill proposes tightening some loopholes in laws that provide for retaliatory tariffs against dumping--that is against products exported to this country below the market prices of the exporting country.

One current tactic used by countries to circumvent these laws involves sending components of the product into a country free of the retaliatory tariff so that the parts can be assembled and then “dumped” free of any penalty. The new regulation, which would make the law apply when that is done, would affect some imported television sets and cellular mobile phones.

The Administration also is seeking greater authority to negotiate in the new round of international trade talks. To avoid having to consult Congress before each trade session for the authority to implement tariff reductions, it wants negotiating authority to be granted for 10 years.

Times staff writer Nancy Yoshihara contributed to this story from Los Angeles.