Trade Bill Maneuvers
Jude Wanniski
July 5, 1988


Democratic political tactics surrounding the plant-closing issue continue to cloud prospects for the trade bill, but several events are working in favor of the protectionists. The House will vote this week on the trade bill, stripped of plant closing, and I'd be surprised if the free traders will muster 50 votes against it. "Everyone's been bought off," reports one free-trade advocate. "The NAM, the Chamber, the oil industry, textiles, business and labor. Nobody wants to stand in the way of all the goodies larded into the bill." Senator Phil Gramm tells me "In Texas they don't look at this as a trade bill. It's a bill to repeal the windfall profits tax!" The White House and Democratic leadership are working to get both a trade bill and a plant-closing bill sent to the President at the same time. This will prevent Senate liberals (Metzenbaum and Kennedy) from putting the plant closing bill back into the trade bill if it is vetoed and the veto sustained. At the moment, it looks like the administration has the votes to sustain a plant-closing veto. This is partly due to Senator Gramm's losing amendment last week to exempt the S&L industry from the plant-closing provisions. A number of Senators who have teetering S&L's are now on the spot and would likely vote to sustain a veto on those grounds. These intricate procedures are weighing in favor of the free-trade position, with a remaining chance that time will run out in the weeks between the Democratic and GOP conventions. The issues might then become snarled in the fall political schedules. These barriers hardly seem insurmountable, though, to the determined protectionists.

There will be an amendment offered in the Senate to retain Presidential authority. But the administration is likely to fight such an amendment if only because it could derail the whole strategy. (Any amendment to either the trade or plant-closing bills would force them back into conference, so the strategy is to keep the two segments identical to the original omnibus bill.) The only chance it has is if Vice President Bush joins in support of the amendment. Asked June 27 by Warren Brookes of The Washington Times if he could live with the "Super 301" transfer of authority issues, Bush replied: "If I were standing on that alone, I'd probably say no. But if you put it in the context of a whole bill, I'd probably go along with it." There is at least a little room here for the joining of an issue, with Bush saying he would "probably" say no to Super 301 if it were addressed alone. Governor Dukakis originally opposed Super 301 but flip-flopped in March to pick up some protectionist endorsements. In the rest of the Brookes interview, though, Bush hardly sounds like the free-trade champion we'd like. Asked if he would be more free trade that the current administration, he said: "I don't know that I would be, because I do reserve the right to fire a selective warning shot at those who egregiously violate free trade on our part. I think the wheat-flour warning shot, or the electronics thing (against Japan), or the computer chip thing, was good stuff. It was protection in a sense, but it was retaliation to level the playing field."

The question is, would Jim Baker pull Bush away from the issue in order to protect any deals he made in the process of getting compromises worked out on the trade bill? Secretary of State Shultz and CEA Chairman Sprinkel are making public speeches denouncing the "procedural protectionism" of Super 301, but JBIII says they do not speak for the administration on this matter!!! If Bush did make an issue of it, there could be enough support for the amendment to make it work. It would take the level of enthusiasm for free trade we saw from Bush in the Carolina primaries. After reading the Brookes column, we are not terribly optimistic on that score. Sorry for the murkiness, but this is the best we can do at the moment.