A New Tiff over Trade Sanctions

Congress challenges the President's power to impose embargoes

The use of trade sanctions as a tool of foreign policy has almost invariably stirred up political storms. When Jimmy Carter banned most grain exports to the Soviet Union after its 1979 invasion of Afghanistan, American farmers were outraged, and Ronald Reagan dropped the embargo in 1981. Next year Reagan slapped sanctions on sales of technology and equipment to the Soviets in an effort to slow construction of their natural gas pipeline to Western Europe. But American businessmen and West European governments protested so strongly that the President relented and ended the restrictions after five months.

Trade policy was once again a hot topic of debate last week as the Senate passed a bill to renew the Export Administration Act, which sets the rules under which the Government can control exports. In a stunning challenge to the White House, the Senators approved an amendment that would require congressional approval for any embargo of farm products after it has been in effect for 60 days. The House passed a similar amendment in October. The Senate also voted to bar the President from imposing trade restrictions that would force companies to break contracts.

Though he lifted Carter's grain embargo, Reagan opposes any limits on his Administration's right to impose trade sanctions. Warned Republican Senator John Heinz of Pennsylvania, who voted against the measures curtailing presidential power: "The Administration would consider this to be so great an intrusion into the foreign policy area that it is highly likely to result in a veto."

The Senate action follows a House vote last October that approved a different set of changes in the Export Administration Act. Congressional negotiators will meet in conference starting next week to reconcile the two bills.

Relations with South Africa could provide one of the sharpest areas of conflict between the House and Senate. The House bill would bar U.S. citizens and companies from making new investments in South Africa because of its apartheid policy and would forbid American banks to lend money to the Pretoria government. In addition, the House voted to require all American businesses in South Africa employing more than 20 people to desegregate their work places, recognize labor unions, and offer equal pay to blacks and whites who do the same work.

The Senate put nothing about South Africa in its export bill and may be reluctant to approve such sweeping sanctions.

Said Republican Senator Orrin Hatch of Utah: "The House bill goes way beyond present U.S. law. I think it does not solve the problems of apartheid, but creates more problems."

Both the House and Senate agreed to keep strict controls on the export to Communist countries of technology that could have military applications. Customs agents regularly seize illicit shipments of advanced computers and other electronic equipment bound for the Soviet Union. In some respects, the Senate bill is much tougher on the illegal trade than the House version. The Senate voted to give the President authority to ban imports from any foreign company found diverting sensitive American technology to Communist nations.

Corporate executives fear that the congressional actions could lead to tighter shackles on exports. Said Howard Lewis, assistant vice president of the National Association of Manufacturers: "Each time the Export Administration Act has been reauthorized, it has become more and more a grab bag of export disincentives. This is a worrisome trend when we are headed toward a $100 billion trade deficit this year." The Commerce Department underscored Lewis' point last week by announcing that in January alone, the U.S. merchandise trade deficit reached a record $9.47 billion.