EC WARNS AGAINST PASSAGE OF TEXTILE BILL
The European Community has told
Congress that if textile legislation injuring EC interests is
approved, there was no doubt the community would retaliate
against U.S. exports.
    Roy Denmam, head of the EC delegation here, issued the
warning in a letter to Senator Lloyd Bentsen, chairman of the
Finance Committee. A copy of the letter was provided Reuters.
    Denmam told Bentsen, a Texas Democrat, that if the textile
legislation passed on its own or was included in an omnibus
trade bill and injured EC interests, "there should be no doubt
that the EC will retaliate against the United States."
    He added that "at a time when U.S. textile exports to the EC
are growing rapidly, one result of such retaliation would be a
substantial reduction of U.S. exports and jobs."
    The textile legislation, backed strongly by the industry,
hard hit by imports, and by senators from textile-producing
states would impose new tough global quotas on textile imports
and for the first time include Europe in the quotas.
    Reagan Administration officials have also opposed the
textile legislation, saying that if it passed it would likely
prompt a presidential veto.
    Denman made his comments on the textile issue in a general
assessment of the Senate trade bill, titled S.490.
    He said he was concerned about provisions in the Senate
bill that would limit, if not eliminate, the president's
discretion if retaliating against nations for keeping their
home markets closed to foreign goods.
    U.S. Trade Representative Clayton Yeutter has also opposed
those provisions, arguing that presidential flexibility was
needed in order to be able to negotiate with countries to open
their markets, with retaliation being retained as a final, but
discretionary, weapon.
    The pending overall trade legislation would force the
Administration to consult often with Congress and seek its
approval during step-by-step GATT negotiations.
    He said "enactment of S. 490 would reduce the confidence of
other governments in America's commitment to multinational
trade."
    Summing up the senate legislation, Denman said "a number of
provisions of that bil may achieve the opposite of what is
intended and lead to dangerous consequences for the world and
the U.S. economy."
 Reuter
