WORLD TRADE: A Fox Is Not a Fish

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During the months that Steelmaker Clarence Randall, as chairman of the 17-member bipartisan Commission on Foreign Economic Policy, worked doggedly to hammer out a new trade policy for the nation, the word among commission staffers was that he "is out to land the big fish." The big fish was Colorado's Archconservative Eugene Millikin, chairman of the Senate Finance Committee and a Republican power on Capitol Hill.

By compromising his free-trade ideals, Randall thought he could win Commissioner Millikin's support and, with it, realistic hope for success in Congress. Last week Randall learned how wrong he was.

"Slicing My Back." The concessions—which drew the most attention in the commission's formal report—included: 1) tampering only slightly with "peril points" and the "escape clause," which keep tariffs high enough to protect any U.S. industry from injury; 2) proposing strong "countervailing" duties for retaliating against nations that control their exports of raw materials to the U.S.; 3) specifically limiting the President's leeway in trade-agreement negotiations. Most important, the commission stopped short of proposing eventual elimination of tariffs, confined itself to urging moderate reductions over the next three years.

Randall wryly described the concessions as "slicing pieces out of my back." Left unsliced, and approved by a heavy majority of committee members, were many genuine trade-liberalizing proposals.

Among them:

¶Eliminate the use of national defense needs as a basis for levying tariffs. Domestic producers of military goods should be protected not by tariff, but by subsidy and contract through the defense budget.

¶Change the Buy American Act to permit foreign companies to bid on U.S. Government contracts without discrimination, provided the bids do not come from countries that discriminate against U.S. companies.

¶ Extend the Reciprocal Trade Agreements Act for at least three years. ¶Give the President power to cut all tariff rates by 5% each year for three years.

¶ Give the President power to cut tariff rates in half on goods that are now virtually excluded from the U.S. market (e.g., angora rabbit yarn, nail clippers), a measure designed to help open new markets for U.S. exports as well as imports.

¶ On items where tariff rates exceed 50% of the goods' value, give the President power to cut tariffs back to 50%, over a three-year period. This would encourage imports of such foreign specialties as toys and scientific instruments.

¶Give the President power to juggle rates within each class of goods (e.g., earthenware and glassware) without changing the total revenue collected. This would simplify customs red tape and reduce arguments over definitions of com modities. The power could be used to ease the rates on high-duty and small-volume imports by raising rates slightly on low-duty and large-volume imports.