House Votes Tough Trade Bill; Reagan Promises Veto

The House today approved a far-reaching trade bill that would force countries that maintain large trade surpluses with the United States to reduce the imbalances or face stiff retaliation.

The vote was 290 to 137.

Final passage came after opponents of the bill’s toughest provision, an amendment by Rep. Richard A. Gephardt (D-Mo.), decided not to seek a second vote on the measure.

The Gephardt provision, calling for Japan and other key economic allies to reduce their trade surpluses by 10% annually or face trade retaliation, was approved by a scant four-vote margin on Wednesday. (Story, Page 8.)

President Reagan today told visiting Japanese Prime Minister Yasuhiro Nakasone that he will veto the legislation if it emerges from Congress with the Gephardt measure attached.

The bill next goes to the Senate, which is not expected to approve the Gephardt measure.

Narrow Margin Cited

Even backers of Gephardt’s proposal, including House Speaker Jim Wright, said the amendment’s narrow margin of acceptance, 218 to 214, makes it unlikely that it will survive in compromise legislation that eventually will be hammered out by a House-Senate conference committee.

But opponents of the measure decided that they could not muster the needed votes today to reverse the outcome--and abandoned an effort to try to force a new vote.

Earlier, the House decided 230 to 190 to retain a provision to require foreign companies and individuals with major investments in this country to register their holdings with the Commerce Department.

The measure would force foreign investors with 10% or larger interests in banks, buildings, companies or farm land worth $5 million or more to file the reports. The Administration opposes the provision, claiming that it would scare away some foreign investments, but the House vote rejected an amendment seeking to strike it from the bill.

‘Buy America’ Provision

It also turned back, by voice vote, an effort to strip from the bill a “Buy America” provision that would bar the federal government from buying merchandise produced in countries with trade barriers against U.S. products.

Rep. Ernie Konnyu (R-San Jose) had urged the House to strike the provision. Konnyu, reflecting the views of his Silicon Valley district, where computer industries rely heavily on Japanese-made components, pronounced the trade measure “a terrible bill. This is a macho bill that will feel good today and hurt us for decades to come.”

Although the 900-page bill contains numerous provisions designed to enhance U.S. “competitiveness” and ease the trade deficit, the Gephardt measure has received the most attention.

Wright said today that his chamber’s approval of the Gephardt amendment “sends a strong signal that the House is determined to respond to the demands of the American people for an assertive trade policy.”