Brock: no to Japanese auto import quotas
US chief trade negotiator William Brock sent the right message to Detroit the other day: The United States should not extend existing import quotas on Japanese cars when they expire next year.
The quotas - now in their fourth year - may have been initially useful in enabling the industry to meet tough competition from Japanese imports during the recession. But there seems little justification for continuing quotas - a position supported by some auto executives and union leaders - now that worldwide economic recovery is under way.
Auto sales are up for Detroit, which is turning out innovative, good-quality products. And personal income is rising for working Americans - ensuring a market.
In a recent interview, Mr. Brock linked his distaste for another year of quotas to what he called ''unbelievable new management bonuses.'' General Motors paid a group of 5,800 executives bonuses totalling $182 million last year. Ford paid over 6,000 executives bonuses totaling $81 million. As Mr. Brock bluntly put it: If the industry is affluent enough to pay such hefty bonuses (with one Ford executive receiving $7 million in salary, bonuses, and stock options), ''then why does it need protection?''
When asked why Mr. Brock didn't send his message against the quotas directly to Detroit, Mr. Brock replied: ''I thought I just did.''
Was Mr. Brock, and perhaps the Reagan administration, also sending a message to Democratic presidential contender Walter Mondale as well? Vice-President George Bush says the administration has not yet decided whether to press Japan for another extension of the quotas when they expire next March. And White House spokesman Larry Speakes, traveling back to Washington with President Reagan, said that Brock was ''expressing his own personal opinion.''
Still, the sudden White House attention to the protectionism issue in general may well be more than coincidental.
It is no secret that Walter Mondale has come down on the side of the unions in the overall protectionism discussion. Mondale has been a strong backer of domestic-content legislation, pushed by organized labor, that would require most components in American-made cars be built in the US. Mondale has also gone out of his way to remind voters he supported the federal loan guarantee program for Chrysler several years ago. Would the administration be eager to have Mr. Mondale come out for an extension of the auto quotas - quotas that many analysts believe have helped raise the price of US-made cars? If Mr. Mondale were to do so, the administration, and President Reagan, could run as the defenders of the American consumer against costly import restrictions - a position that might play well in Sunbelt states, and parts of the Midwest where farming communities are export-oriented and where unions are often viewed with deep unease.
