YEUTTER WARNS CONGRESS ON TRADE RETALIATION
U.S. trade representative Clayton
Yeutter said that if Congress were to require trade
retaliation, it would only close markets and would result in
less trade.
    In remarks prepared for an address to members of the
University of Chicago's Graduate School of Business, Yeutter
said many Congressional proposals do not appear to be overtly
protectionist, yet their undeniable effect would be to close
off market opportunitites, just as exchange rate movement is
unleashing such opportunities for the first time in several
years.
    "Despite all our progress on trade policy and despite the
President's comprehensive competitiveness initiative, there are
many in Congress who still are supporting trade bills
containing many dangerous provisions," Yuetter said.
    Yeutter said many countries would prefer U.S. retaliation
to opening their own markets. "We should be intelligent enough
to not let them off the hook that easily," he said.
    He said that tough but flexible legislative language is
infinitely preferable to tough but inflexible language.
    Both House and Senate trade proposals place undesirable
limits on Presidential discretion, he said.
    "Limiting the President's ability to consider all available
options on issues as sensitive as these would be most unwise,"
Yeutter said. "That could readily provoke retaliation, which
would unneccesarily embroil us in trade wars, injuring most
competitive export industries."
    Yeutter said present U.S. trade laws are fundamentally
sound.
    President Reagan has threatened or implemented retaliation
eight times in the last 18 months -- most recently in the case
of Japanese semiconductors being dumped in world markets.
    "He took these steps as a last resort, only after carefully
analyzing all the contingencies on a case by case basis and
only after determining that such actions would open markets to
American exports", he said.
    Yeutter said it would be foolish to attempt to solve the
U.S. trade deficit by focusing on trade policy alone. He added
that the trade deficit was created primarily by macroeconomic
policy shortcomings here and abroad.
 Reuter
