Reagan's Export Policy: Rekindling the Yankee Trader Spirit

The Reagan administration is moving swiftly to "get government out of the way of private enterprise," and "rekindle the old Yankee Trader spirit," in the words of Commerce Secretary Malcolm Baldrige. A series of administration proposals currently before Congress will-if passed-give multinational corporations the full blessing and support of the U.S. government in their efforts to capture a larger share of world markets.

The immediate goals, of the White House are to do away with government "impediments" to exporting.. Banking and antitrust laws are to be altered by the Export Trading Act of 1981, which would allow banks to invest in U.S, export trading companies, intermediaries between U.S. manufacturers and foreign buyers. A proposal for modifying and weakening the Foreign Corrupt Practices Act of 1977 has been forwarded by Senator John Chafee (R-R.I.), with the full support of the administration-which has called for even more drastic cuts in the Act (see MM June 1981).

Plans are also .being prepared, to change a U.S. Tax Code provision that results in many Americans who work overseas paying both U.S. and foreign income taxes (see accompanying story).

Although these proposals have not yet come to a vote in the full House and Senate, they all are likely to pass.

The administration's plan to eliminate legislative "disincentives" to foreign will be accompanied by an expanded marketing assistance and information program to aid exporters.

Reagan's commitment to a stronger export position has brought about changes in U.S. foreign policy. The European Community has been warned to stay out of "traditional U.S. markets" by Agriculture Secretary John Block. Other officials have reiterated the administration's plan to vigorously enforce multilateral trade agreements and free trade laws. According to Secretary of Commerce Malcolm Baldrige, "the days of looking the other way when other nations violate rules of fair trade and investment practices are over."

In the fight against protectionism, the White House's long-range goal is to prevent other countries from establishing non-tariff barriers to close markets to imports from the U.S.. The main weapon in this battle will be a series of bilateral investment treaties encouraging U.S. private enterprise in developing nations-the first of which will be presented in draft form to Egypt by the Department of State in the next few weeks.

One of the few Reagan policies distasteful to exporters' interests was Budget Director David Stockman's unsuccessful plan to cut back the appropriation for and lending authority of the U.S. Export-Import Bank. Since two-thirds of Exim Bank loans go to finance overseas purchases from just seven large U.S. corporations (Boeing, General Electric, Westinghouse, McDonnell Douglas, Lockheed, Western Electric, and Combustion Engineering), the cuts were displayed as a shining example of the lack of a pro-business bias in the administration's budget policies.

Faced with an intensive lobbying effort by the biggest clients of the bank, a General Accounting Office study projecting the first loss year in the bank's history, and an inability to negotiate similar export subsidy reductions with members of the European Community and Japan, the White House put up only mild opposition as Exim's funding for fiscal 1981 was restored by Congress-and actually fought against attempts in the House Banking Committee to cut the bank's 1982 budget.

The final Exim Bank budget package -allows for direct lending authority of $5.46 million for fiscal 1981 and $5.06 million for fiscal 1982 compared to the original administration goal of reducing the lending authority to $5.148 million for fiscal 1981 and $4.4 million for fiscal 1982.

Reducing government controls on exporting and bribery, enforcing existing world trade rules, continuing support for the Exim Bank, and improving export assistance services together form the Reagan administration's policy to assist U.S. business abroad. The old Yankee Traders never had it so good.