A Fox Is Not a Fish

During the months that Steelmaker Clarence Randall, as chairman of the 17-member bipartisan Commission on Foreign Economic Policy, worked doggedly to hammer out a new trade policy for the nation, the word among commission staffers was that he "is out to land the big fish." The big fish was Colorado's Archconservative Eugene Millikin, chairman of the Senate Finance Committee and a Republican power on Capitol Hill.

By compromising his free-trade ideals, Randall thought he could win Commissioner Millikin's support and, with it, realistic hope for success in Congress. Last week Randall learned how wrong he was.

"Slicing My Back." The concessions--which drew the most attention in the commission's formal report--included: 1) tampering only slightly with "peril points" and the "escape clause," which keep tariffs high enough to protect any U.S. industry from injury; 2) proposing strong "countervailing" duties for retaliating against nations that control their exports of raw materials to the U.S.; 3) specifically limiting the President's leeway in trade-agreement negotiations. Most important, the commission stopped short of proposing eventual elimination of tariffs, confined itself to urging moderate reductions over the next three years.

Randall wryly described the concessions as "slicing pieces out of my back." Left unsliced, and approved by a heavy majority of committee members, were many genuine trade-liberalizing proposals.

Among them:

P:Eliminate the use of national defense needs as a basis for levying tariffs. Domestic producers of military goods should be protected not by tariff, but by subsidy and contract through the defense budget.

P:Change the Buy American Act to permit foreign companies to bid on U.S. Government contracts without discrimination, provided the bids do not come from countries that discriminate against U.S. companies.

P: Extend the Reciprocal Trade Agreements Act for at least three years. P:Give the President power to cut all tariff rates by 5% each year for three years.

P: Give the President power to cut tariff rates in half on goods that are now virtually excluded from the U.S. market (e.g., angora rabbit yarn, nail clippers), a measure designed to help open new markets for U.S. exports as well as imports.

P: On items where tariff rates exceed 50% of the goods' value, give the President power to cut tariffs back to 50%, over a three-year period. This would encourage imports of such foreign specialties as toys and scientific instruments.

P:Give the President power to juggle rates within each class of goods (e.g., earthenware and glassware) without changing the total revenue collected. This would simplify customs red tape and reduce arguments over definitions of com modities. The power could be used to ease the rates on high-duty and small-volume imports by raising rates slightly on low-duty and large-volume imports.

Striking the Heart. The report's most original, provocative idea was a separate proposal by C.I.O. United Steelworker Chief David McDonald, who had worked closely with Randall and had balanced the voices of economic isolation with statesmanlike vision. To pave the way for drastic tariff cuts, McDonald would set up a federal relief program for injured companies and workers. Distressed companies would get technical advice, loans, Government contracts and fast tax amortizations to help them diversify their products and find new markets. Unemployed workers would get relief, placement service, training and moving allowances and, where age bars them from new jobs, pensions.

None of his colleagues backed McDonald on this scheme. Free-trading commissioners feared that to propose it would be to admit that tariff cuts actually would hurt home industries. Protectionists ridiculed it, for it struck at the heart of their arguments: by automatically compensating for damage to industry, the only valid reason for tariffs is removed. Gene Milli kin called it "government trying to play the Deity with our economic system." Such statements overlooked some figures computed by the U.S. Labor Department: each week 300,000 newly unemployed workers apply for jobless insurance; but cutting all tariffs in half would cost only 100,000 workers their jobs.

Plucking an Insult. Throughout the commission's deliberations, Millikin be haved amiably and cooperatively. But foxy Politician Millikin is no fish. By leading Randall on, he got both a diluted report and the freedom to attack it as if it were an uncompromising free-trading document. Early last week he wrote Businessman Randall a 3,500-word letter that amounted to a sweeping repudiation of the report. He craftily plucked at the report's weaknesses and dealt Randall a studied insult, as he observed that tariff revisions are made by the Senate Finance Committee, not the Randall commission.

The Millikin dissent left Clarence Ran dall a disillusioned chairman. A stronger report would have cost few additional dissents, but would have given Ike a far better bargaining position from which to deal with Congress. As it is, in order to get a strong new trade policy, the Administra tion will have to fight hard for all the commission's major proposals.

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