WASHINGTON — Organized labor, seizing on Senate Finance Committee trade bill hearings as a forum, showed Tuesday that it has not wavered from its view that the solution to the nation's massive $170-billion trade deficit is to buy less from foreigners and step up protection of weakened industries.
In lengthy testimony before the committee, AFL-CIO President Lane Kirkland avoided the term "protectionism." But he endorsed legislation to penalize Japanese, South Korean, Taiwanese or West German imports so long as those countries maintain huge trade surpluses with the United States.
Owen L. Bieber and Lynn R. Williams, presidents, respectively, of the United Auto Workers and the United Steelworkers, were unabashed in their call for tighter quotas on steel and auto imports and "domestic content" legislation to keep foreign auto parts from assembly plants in this country.
In a prepared statement that neatly summed up the attitude of the ailing steel and auto industries and their unions, Bieber said: "In today's world economy, the presumption that an open U.S. market has no important adverse impact on the domestic economy is both shortsighted and dangerous."
Kirkland was more willing to concede that expanding trade is better for the economy than shrinking trade--but only if it is Americans who are exporting and foreigners who are buying.
At present, he said, trading partners such as Japan and West Germany, which bear huge surpluses with the United States, are "mercantilist" in policy.
Such a policy, Kirkland said, "is the antithesis of free trade. It is a policy to expand exports and discourage imports and, when that happens, the most open market is going to suffer the consequences. Our trade deficit is a consequence of the fact that we have built the largest market in the world."
The AFL-CIO president also was scornful of highly paid corporate managers who seek wage concessions in U.S. industry at a time when Japanese and West German workers are paid as much as or more than American factory workers, in terms of the recently depreciated dollar.
Bieber and Williams, representing industries that have been ailing for several years, were almost despairing in their outlook for the future. A fully modernized high-capacity steel plant in the United States "could never compete with a similarly modern plant in South Korea" because of wage differentials, Williams said.
Bieber warned that the growth of efficient Japanese- and Korean-owned auto plants in the United States could double the amount of idle auto production capacity to 4 million units from 2 million units--resulting in the probable closure of 10 to 15 more American auto plants.