US trade credo's faith in free markets comes under fire
As Herbert Hoover, by some accounts the greatest secretary of commerce America ever had, once observed, "a good many things go around in the dark besides Santa Claus."
Likewise advocates of free international trade have often found the world is full of protectionist countries just waiting to take advantage of their good nature.
This week the White House released a long-awaited international trade manifesto. Criticized by Republican senators as a vague text wrapped in free-trade rhetoric, the "white paper" reflects the administration's struggle to reconcile an ideological bent for unfettered exchange with the complexity of international marketS.
Responding to charges that the report was not sufficiently precise, Special Trade Representative Bill Brock summed it up in a sentence: "Where it is possible to do so we will seek to move in the direction of freer trade."
In this context "possible" may be difficult to define. To date, the Reagan administration's international trade decisions have been somewhat diverse.
On one hand, the White House has refused to extend quotas on shoes imported from South Korea and Taiwan. On the other, it is still haunted by its role in the voluntary Japanese auto import restrictions.
Mr. Brock, at the hearing announcing the white paper, played down the administration's role in the Japanese auto restrictions. "I'm suggesting we were available for consultation with the Japanese and they made their own decision," he said.
The International Trade Commission, which advises Congress and the White House on trade issues, recommended that no restrictions be placed on Japanese cars. It also thought extending the shoe quota was a good idea.
Now the administration has asked the commission to find out if cheap imports are undermining the tobacco price support program. It has also repeated its support for an international textile agreement, soon to expire, which limits textile imports from 50 countries.
"We do feel the Multifiber Arrangement has been productive and should be extended," Brock said.
Is the Reagan policy to be free trade when it's convenient? The white paper, delayed for minor tinkering at the hands of Cabinet officials, attempts to clear up the confusion.
The paper's main statements of international trade policy:
* Resorting health to the domestic economy. "Until we get a handle on controlling inflation nothing else is going to work in this country," said Brock.
* Unfettering exports by breaking the shackles we've put on ourselves. "Confusing, contradictory, and unnecessarily complex laws and regulations adversely affect exports," the report says, naming such villains as the taxation of Americans who work abroad and the Foreign Corrupt Practices Act.
* Effective enforcement of US trade laws and international agreements. The report says that trade "must be a two-way street in a genuinely open trading system" and that the administration will "strictly enforce" measures now on the books.
* Helping domestic industries hurt by imports. The paper says trade policy must recognize that certain sectors of the economy are essential to national security, and should be protected. But it says that programs such as trade adjustment assistance only ease the pain, and that it will be US policy to rely on market forces to shape US industry.
Commerce Secretary Malcolm Baldrige, however, admitted there could be other reasons besides national security for imposing import restrictions.
* Dismantling of government barriers to the flow of free trade. "Our objective will be to reduce government barriers, both in the US and abroad, to the flow of trade and investment among nations," says the report, touching on such issues as trade in services and high-technology goods, and trade with developing nations.
"The government can help create an environment conducive to efficient and profitable production," the report summed up, "but it is private individuals and enterprises who have to take the initiative to seize economic opportunities."