Date: 1982-04-01
Speaker: ROBERT C. BYRD (democrat)
Chamber: S

Mr. President. unfair export competition is affecting every part of the American economy. Subsidized exports from foreign governments are crippling our steel and auto industries. Of course. high interest rates and our serious recession are also working to destroy our American standard of living. as anyone who tries to buy a home or a car has found. But the unfair advantages enjoyed by European steel and Japanese automobiles are increasing our Nations basic industrial weakness. The truth is that foreign competitors often benefit from subsidies that our Government does not provide. In fact. according to Fortune magazine. stateowned steel mills in Belgium. Britain. Italy. and France. will enjoy $30 billion of government subsidies between 1976 and 1983. The threat of these subsidies to our Nations steel industry is growing. Steel imports rose to over 1.9 million net tons in January. an increase of 53.6 percent over yearearlier totals. These imports now account for over 26 percent of all steel sold in the country. The problem is not limited to direct subsidies by European governments. Through a complex combination of nontariff barriers. the Japanese have restricted American access to their markets. In 1981 alone. Japan exported $18 billion more to us than we exported to them. Autos accounted for almost $13 billion. or 72 percent of that. Yet. we are told by the Secretary of Commerce that. with the worlds second largest economy. Japan imports less than What can we .do to stem this rising tide of export imbalance? Some have suggested closing our markets to any goods that directly compete with U.S. products. That seems easy. but it is not. If we needed nothing from other countries and had no need to sell anything to them. this might be a way out of our dilemma. But our economic future will increasingly depend on growth through exports as well as in. creased sales in this country. That is why our answer must concentrate on opening up foreign markets to our products on an equal basis. Trade is a twoway street. and if other nations expect to sell their products here. they must let us compete fairly in their markets. Exports now make up 7.8 percent of our GNP. double their 1970 level. Although there are some remedies in existing law. notably the 1974 Trade Act and the 1979 Trade Agreement Act. the record. especially on steel imports. is not good. The "Trigger Price Mechanism." established in 1977 to discourage unfairly lowpriced steel imports. has been our main weapon against subsidized steel imports. Unfortunately. the executive branch has never forcefully used this provision and there are no signs of improvement. With this situation in mind. I am introducing legislation today that will direct the President to assess foreign export subsidies. unfair trade practices. existing foreign barriers to U.S. exports. and require him to propose such actions as are necessary to offset such barriers if international dispute settlement machinery cannot do so. Further. should such negotiations fail. this legislation would require him to inform offending governments what actions he will take against the imports of the offending country. if it. does not act to eliminate its own barriers against our products within a reasonable time. This bill will require the President to identify foreign export subsidies. unfair trade practices. and damaging barriers to U.S. trade abroad. but does not require him to wait for individual complaints by producers who may fear to make such complaints because of possible retaliation by foreign governments. I realize that my legislation moves beyond more conciliatory proposals already before the Congress. But times are difficult and require drastic remedies. If this bill does no more than to stimulate both the administration and my colleagues to finally solve the trade problems confronting the United States. it will have served a real need. Only when the American Government is armed with the weapons it needs to deal with the unfair and discriminatory trade practices of our trading partners can we redress the grievances suffered by U.S. manufacturers both here and abroad. Today I am introducing the Fair Trade Act of 1982. The bill amends the Trade Art of 1974. to provide the United States the means to end foreign subsidies and other unfair trade practices unless foreign markets are opended to U.S. trade to the same extent that U.S. markets are open to exports from foreign countries. It requires the U.S. Trade Representative to report to the President on foreign export subsidies. unfair trade practices. and existing barriers to foreign market access. within 6 months from the date of enactment of this bill. Within 180 days. the President is directed to submit this report to the Finance Committee of the Senate and the Ways and Means Committee of the House of Representatives. He must also propose such actions as may be necessary to correct the damage to both U.S. industry and exporters resulting from such unfair practices. The Congress is required to act within 60 days upon the Presidents proposals. instructing him which options are to be carried out. Within 60 days of such congressional action. the President shall inform the countries of instrumentalities involved as to which reciporcal actions will be taken against their exports to the United States if their export subsidies unfair practices do not cease within a reasonable period of time. By strengthening existing trade rules and by providing the executive withi the tools it needs to correct the abuses from which we suffer in both domestic and foreign markets. my bill will help open and expand the markets our economy needs abroad while ending unfair competition to our own products here at home. Part of the problem my bill addresses is that the administration is riddled with absolutist free traders. These ideologues are wedded to an 18th century concept of international trade that simply will not work in the late 20th century. The Government must step in where markets fall to work equitably. When other countries are subsidizing exports. or barring our imports. the market mechanism of free trade will not work. It does not solve our problems at home and it will not solve our problems abroad. We must devise a workable strategy to deal with the unfair advantages enjoyed by the Europeans and especially the Japanese. to the severe disadvantage of American business and labor. There are also several international mechanisms designed to deal with unfair trade practices. notably the General Agreement on Tariffs and Trade (GATT). Unfortunately. the record of GATT is as disappointing as the "Trigger Price Mechanism" for steel. . The United States has repeatedly tried to make world trade more free and more fair by reducing tariff or nontariff barriers to trade. But we have been repeatedly rebuffed by our foreign trading partners. In fact. if all countries ended export subsidies and accorded our exports the same most favored nation treatment we accord theirs. as the GATT requires. most of our trade problems would disappear. Perhaps there was a time when we could afford to ignore this imbalance. but sadly. that is no longer true. I do not suggest that we conduct a vendetta against individual producers. That would only intensify the efforts of other governments to close their doors to U.S. products. While we have a severe trade deficit with Japan. we did sell them $21.8 billion worth of goods last year. This was production that employed thousands of American workers who spent their money on American products to help keep our own economy moving. We should not cut off our nose to spite our face. 11 unilateral retaliation will not work. what choices do we have? I believe that a more promising and productive approach would be to let our trading partners know that we demand. and are willing to enforce. equal access to foreign markets. Our citizens will no longer support unfair subsidies that put American workers out of jobs. We must work full steam toward a reciprocal agreement that opens markets worldwide to the most efficient competitors. There are several steps we can take. If American goods are made more uncompetitive than they should be by the climate of high interest and exchange rates. which make our dollars and our exports more expensive in foreign countries. we have to attack the problem here at home. The administrations tight money policy and outsized budget deficits and their impact on the lives of hardworking American citizens must be turned around. Senate Democrats have already suggested that the administration go back to the drawing board to come up with a workable and credible budget for the next fiscal year. My legislation. the Fair Trade Act of 1982. forces the executive branch to impose countervailing duties if good faith efforts to negotiate an end to steel and other foreign export subsidies are not successful. It would also retaliate against Japanese auto imports if the Japanese do not live up to their promises of export restraint and agree to lower nontariff barriers against our exports. The key to such an approach is reciprocal understanding with other governments that an end to their unfair export subsidies and improvements in their treatment of our exports will protect healthy. open trading relationships between them and the United States. And most importantly. these improvements must be made soon. In the case of the Europeans this means. among other things. considerable liberalization of their common agricultural policy which has kept U.S. farm exports out of Europe. For the Japanese. we must pressure them to abandon the impossibly strict health and safety standards and testing requirements they impose on foreign products. although their own products must meet less severe tests. Reciprocal fair trade practices will help keep the world trading system healthy. Most important. they can stave off onesided protectionist measures that will help no one and may spark a trade war with disastrous results for the United States. The May 1981 voluntary agreement with the Japanese to restrain auto exports is a first step toward such agreements. and I am encouraged by its recent 1year extension. but they must begin to live up to the spirit as well as the letter of their commitment. Rather than looking for loopholes or escape clauses they should be conceqtrating on ways to ease the massive trade imbalance between our countries. As a first step. they should remove existing barriers to our autos and our agricultural products. including beef and pork. tobacco and citrus. Getting our own economy in order. which starts with a workable budget and aggressive pursuit of U.S. trade opportunities overseas. combined with a responsible negotiating posture from our trading partners in Western Europe and Japan. can lead to real reciprocity in our commercial relations and will go a long way toward easing our problems. Without such developments. the future is not bright Pressures to take unilateral action will only increase and such action would not help us or our trading partners. Without the legislative authority my bill creates. I do not see any sign on the horizon that we will be able to solve our trade problems. My bill is a sensible and yet strong alternative to onesided solutions that in the long run help no one. With the machinery it creates. we can go a long way to solving our trade problems. ending exports subsidies and other unfair foreign competition to our industries. and getting our economy back on track internationally again. Mr. President. I ask unanimous consent that the text of the bill. together with a summary of its provisions. be printed in the RECORD at this point.