The massive trade legislation hammered out by House and Senate conferees last week is without many of the most radical provisions contained in the original House and Senate bills.
Yet the provisions remaining in the conference report would lead to widespread changes in U.S. trade law if the proposed statute is passed.Some of these provisions would subtly change existing law, while several others break new ground.
Work still remains to be done in the foreign investment subconference and the agriculture subconference, but the bulk of the bill is completed. When Congress returns from the Easter recess next week, the remaining subconferences are expected to be finished up.
The following is a look at how the trade bill compares with existing law:
The changes made to existing law in this area would be subtle.
The current law, Section 201 of the Trade Act of 1974, allows the government to grant relief if the International Trade Commission decides imports seriously threaten a domestic industry. The president has flexibility to deny relief whenever he feels it appropriate.
During President Reagan's tenure in the White House, the ITC has recommended relief six times, but the president has granted relief only four times.
The Senate version of the bill would not have allowed a national economic interest waiver in relief cases, something the current law allows. Sen. Lloyd Bentsen, D-Texas, was adamant that the president be required to take some action.
The House and the Reagan administration supported wide discretion.
The conference compromise requires the president to take action to help the ailing industry back to health. He does not have to grant relief, but can decide instead to negotiate a voluntary restraint accord with another nation, or give some preferential domestic treatment to the industry.
The president does not have to take any action if he feels it runs contrary to the national economic interest.
The House sought to transfer relief decisions from the president to the Office of the Trade Representative, but that measure was defeated.
Unfair Trade Practices
The changes to this portion of the bill were much broader. The key change is that the president loses some of his discretion to act under Section 301 of the trade law.
Significantly, authority to take action would be transferred from the president to the U.S. Trade Representative's Office.
Existing law holds that the president can respond to unfair practices, such as barriers to U.S. imports or infringement of investment rights, in virtually any manner he chooses. In practice, these actions have come in the form of quotas or tariffs. The president has wide discretion in deciding whether to act.
The new trade bill, however, dictates that in cases where foreign nations have violated an existing trade agreement the trade representative must retaliate, unless the action would result in drawbacks substantially out of proportion to the benefits. He also may decline any action if such steps may hurt the national security.
An addition to section 301 is the so-called Super 301, which the Senate proposed as an alternative to the Gephardt amendment.
The Gephardt amendment targeted specific countries for retaliation and required 10 percent annual reductions in the trade surpluses of those nations.
The Super 301, in contrast, calls on the trade representative to identify trade barriers abroad, to gauge their damage to U.S. exporters in dollar terms and to seek the removal of the barriers.
If agreement with the foreign nation cannot be reached within three years, the trade representative would then be required to initiate retaliation proceedings under existing 301 statutes.
This authority must be renewed every few years, so there is no existing law. Under the congressional proposal, the president would have the authority to conduct both multilateral and bilateral trade agreements.
He would have so-called fast track authority on tariff cuts, which means that Congress can approve or disapprove such actions solely through an up or down vote, with no amendments.
This authority is extended to tariff proclamation as well.
This is one of the areas that breaks new ground. Current law holds few restrictions to foreign investment, but under the pending bill the president would be granted new powers to block takeovers or mergers by foreign firms if he felt such actions might jeopardize the national security.
A more controversial amendment, sponsored by Rep. John Bryant, D-Texas, has not been decided on. The proposal has been watered down significantly. Even under its most recent version, foreign investors with significant U.S. holdings would be required to register and to divulge certain financial data to the administration and several congressional committees. The data would be confidential unless one of the committees voted to make it public.
This provision, sponsored by Sen. Jake Garn, R-Utah, is among the most controversial in the bill, and there is nothing like it in existing law.
Under the provision, Japan's Toshiba Machine Co., its parent company, Toshiba Corp. and the Norwegian firm Kongsberg Vaapenfabrik, will be hit with sanctions for sales of sensitive milling machines to the Soviet Union.
Because of the involvement of the firms in selling the machines, which
allow Soviet submarines to run quieter, Toshiba Machine and Kongsberg will be banned from exporting to the United States for three years. Toshiba Corp. will be banned from selling goods or services to the U.S. government for three years.
Future violators of export control laws would be exposed to similar bans for two to five years. Parent companies would be exempt if they were unaware of the sale.