WASHINGTON — The Reagan Administration's plan to help U.S. industry compete abroad by streamlining--and in large part relaxing--the nation's antitrust laws received mixed reviews Wednesday from some affected industries and cautious approval from economists specializing in international trade issues.
The key element in the package, approved last week by President Reagan, is a proposed five-year suspension by the Commerce Department of merger restrictions for U.S. industries that have been seriously injured by foreign competition.
Several private economists in recent months have proposed similar policy changes, which are intended to take the place of conventional protectionist remedies such as tariffs and import quotas.
But two sample industries facing import competition--steel and electronics--reacted very differently. The heavily protected steel industry would rather keep its present tariff and quota protection, industry sources said, while the semiconductor industry, under siege from Japanese competitors, would welcome any measure that would make it easier to compete in a global marketplace.
Explaining the Administration proposal Wednesday, White House spokesman Larry Speakes placed it firmly in the context of greater competition on the global stage, rather than less competition in the domestic market--the dominant rationale for the Clayton Antitrust Act, enacted in 1914.
"It would be mainly to allow those companies in the United States who are severely affected by foreign competition to have a better opportunity to merge," Speakes said. "We believe it would put . . . U.S. commerce on a more competitive footing and in the long range be beneficial to consumers."
Speakes said that, of the 15 largest industrial corporations in the world, no more than five are based in the United States and that 70% of U.S. firms face competition abroad.
In a session with reporters last month, Commerce Secretary Malcolm Baldrige presented the antitrust package as a "good, common-sense" alternative to protectionism in trade injury cases before the International Trade Commission--cases in which the President at present has no choice besides refusing any relief or imposing tariffs or quotas. The Administration proposal would give injured industries a chance to restructure, streamline, cut costs and increase productivity to compete effectively with foreign companies, Baldrige said. But it would not force the President to impose tariffs or quotas, thereby raising domestic prices, costing jobs elsewhere and weakening the industry still further.
Gary Clyde Hufbauer, a Georgetown University economist who has developed a set of trade policy proposals for the Institute of International Economics here, said: "I'm pleased to see they are proposing antitrust relief as an alternative to protectionism." But he warned that encouraging industry mergers as the preferred way to compete globally might in some cases limit competition at home.
"It might be better to allow firms to work out side agreements between them to enable one of them to close an inefficient plant, so both share the costs as well as the benefits of reducing excess capacity," he said.
Robert E. Litan, a Brookings Institution economist who recently co-authored another trade policy proposal, generally approved the proposal but was skeptical that Congress would enact the Administration plan.
The five-year antitrust exemption is too sweeping, he said, especially when coupled with a proposal to revise drastically the Clayton Act clause that bars any merger that would "tend to create a monopoly."
"I am sympathetic to relaxing standards in some way for hard-hit industries--perhaps by easing the Clayton language for them," Litan said. But, he noted, "The fact is, people in hard-hit industries don't care much about merging, and this won't inhibit their desire to run to Capitol Hill for protection."
The steel industry, a perennial supplicant to the federal government for protection against foreign competition, gave only mild approval Wednesday to the proposal to generally relax antitrust standards but left no doubt that it would rather hang onto tariff and import quota protection as well.
The industry, said Barton C. Green, general counsel to the Iron and Steel Institute, "does oppose an amendment to give the President the option to provide merger relief instead of trade relief, such as tariffs or quotas. . . . We think antitrust relief ought to be supplemental to protection, not a substitute."
William Krist, director of international affairs for the American Electronics Assn., had a sharply divergent view. "To relax antitrust (laws) and at the same time maintain protection from outside competition is the worst thing you could do," he said. "It guarantees that the domestic industry gets fat and lazy."
Krist noted that Japan generally maintained a superheated domestic competitive climate during the times it protected its auto and electronics industries from competition abroad. Those industries are precisely the ones that are now formidable competitors abroad.
Most branches of the electronics industry are less interested in antitrust help of the sort the Administration is currently proposing, he said, than in an expanded ability to pool research and development costs, a form of antitrust relief not in the Administration package.