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THE STATE OF THE UNION : Talk Stresses Competitiveness : Reagan Tries Also to Preempt Issue of U.S. Trade Balance

January 28, 1987|OSWALD JOHNSTON | Times Staff Writer

WASHINGTON — President Reagan proposed a 43-point program Tuesday in an effort to claim as his own a national drive to correct the nation's trade balance and improve its competitiveness in the world economy.

On those issues, which have become prominent features of the political program of the Democrats, who control the House and Senate, Reagan told Congress in his State of the Union address that it will soon receive "my comprehensive proposals."

Reagan hammered at the issue of competitiveness, which politicians of all stripes have been promoting as a way to bring American industry back into a trade balance with the rest of the world. He offered what he called a coherent program for determining "that we should enter the next century having achieved a level of excellence unsurpassed in history."

Funding for Research

To achieve that visionary goal, Reagan said, he will soon send Congress a legislative package that will include federal efforts to finance and promote new science and technology centers. In addition, he proposed "strong new funding for basic research."

An accompanying message to Congress spelled out in greater detail proposals for greater federal funding of the National Science Foundation and a federally sponsored exchange program between private sector and government research scientists to exchange technologies and help speed new products to market.

In addition, the State Department is to step up efforts to attract foreign scientists and researchers to the United States, and the U.S. trade representative is to redouble efforts to obtain international agreements on protecting U.S. patents and copyrights from infringement.

As another side of Reagan's intended drive for "competitiveness," Vice President George Bush is to energize the recently revived Task Force on Regulatory Reform and prepare an updated agenda for streamlining antitrust laws, easing export controls and further deregulating such industries as trucking and natural gas.

Program for Schools

The President called for a renewed effort to improve the nation's education "by raising literacy levels dramatically by the year 2000," insisting on tougher academic standards, grounding students in "the basic documents of our national heritage" and providing a drug-free school setting.

Reagan pointed to an economy that is in its fifth year of expansion.

"Our inflation rate is now the lowest in a quarter of a century," he said. "The prime interest rate has fallen from 21.5% the month before we took office to 7.5% today . . . . The unemployment rate--still too high--is the lowest in nearly seven years, and our people have created nearly 13 million new jobs. Over 61% of everyone over the age of 16, male and female, is employed--a new record."

At the same time, the President conceded that the nation's trade balance--an estimated $170-billion deficit in merchandise last year--must be corrected. In his speech, he alluded to Administration policies, already begun, to renegotiate international trading rules in a new round of talks, opened last year in Uruguay, under the General Agreement on Trade and Tariffs.

Unfair Trade Practices

And he reiterated the policy, announced in September, 1985, to press Japan and other trading partners to open their markets to U.S. goods and to stop such unfair trading practices as dumping their products in the United States at prices below those charged in the home market.

"Our basic trade policy remains the same," he said. "We remain opposed as ever to protectionism because America's growth and future depend on trade. But we will insist on trade that is fair and free. We are always willing to be trade partners, but never trade patsies."

Reagan mentioned also a proposed program spelled out in his fiscal 1988 budget to consolidate and expand existing worker-training programs and to target them at workers, including farmers, who have lost jobs because of foreign competition. The budget promised to earmark $980 million for such programs in the fiscal year that begins Oct. 1, but Reagan did not mention that figure in his speech.

Other Points

A fact sheet issued by the White House to accompany Reagan's speech listed worker training among 43 points in the Administration's "competitiveness initiative." The other points included:

--Limiting the Freedom of Information Act by allowing the government to withhold from the public a broader range of commercial information.

--Mandating reduced damage awards in product liability cases in an effort to trim the production costs of U.S. goods.

--Easing export controls aimed at blocking the export to U.S. allies of products with possible military applications that might be forwarded to the Soviet bloc.

--Directing the Defense Department to accelerate its efforts to spin off new defense-oriented technologies to the private sector.

The White House fact sheet reiterated Reagan's instruction to Treasury Secretary James A. Baker III to "improve economic and monetary cooperation on a global scale," with a goal of guaranteeing "a more stable and realistic value of the dollar and increased growth abroad."

Baker was also instructed to press forward with his plan to reduce the international debt of Third World nations, particularly in South America.

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