The MacNeil/Lehrer Report; Local Protectionism

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UNEMPLOYED WORKER: It was proven that they were dumping on us unfairly. The law was there. But what did the U.S. government do? What did they do to us? That's the same as a cop-out or a sell-out saying, "A person under us did all this." It's not right. The law was there to be enforced.

ROBERT MacNEIL [voice-over]: Today this worker and hundreds of his fellows lost their jobs making TV tubes. They blame foreign imports, and they're joining a growing cry for protectionism.

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MacNEIL: Good evening. Over the weekend one of the five remaining U.S. factories making glass for color TV tubes closed down in Bluffton, Indiana, putting 400 people out of work. The factory was only 18 years old, but it became another victim of foreign competition. Those workers, like others in the industrial heartland, their employers and whole communities have joined a growing movement to protect U.S. industry from such competition and they're looking to Washington for action. The auto industry wants a law requiring American content in cars. Steelworkers have brought suits against dumping by foreign steel makers. Garment workers want reduced quotas for imported clothing. The Reagan administration opposes trade restrictions, but with the issue heating up at the local and state level, the pressure for action is growing in Congress. Tonight, the rise of protectionist sentiment and how it looks from one Indiana town. Jim?

JIM LEHRER: Robin, that Indiana town is Bluffton, 25 miles south of Fort Wayne in the northeastern part of the state. Some 25,000 people live there and in surrounding Wells County. What's happening there is a prime example of fallout from import competition. Bluffton's tie-in has been to the dwindling U.S. color television set industry. In the last 10 years the foreign share of the U.S. market has gone from 12% to 35%, and as a result the American workforce involved in making color TV sets has shrunk from 42,000 to 17,000. It was all going the other way 18 years ago when Corning Glass built this plant on the outskirts of Bluffton to make glass for television tubes. Now it will be used as a distribution warehouse requiring only a dozen employees. Producer Ken Witty talked recently to a group of workers not part of that remaining dozen.

1st WORKER: It's a matter of not just our jobs; it's the neighbors' jobs, the area jobs. The whole area is depressed through International Harvester, Corning Glass Works, Fisher Body, the automotive. Everything from Michigan all the way to Tennessee has been lost because of an import situation.

2nd WORKER: Well, it's not just the 650 people at Corning in Bluffton. It's going to be the people in Bluffton and around Wells County, in Hartford City. Our communities around us that are going to have to lay people off in the stores, and we'll probably see schools being closed because of this, because the taxes won't be coming in that this company pays. So we'll have to close things up. And our government's letting them do this, and I just don't understand why they're letting it happen.

3rd WORKER: You could be talking about just the effect of the Corning plant in this area -- 1,500 to 2,000, maybe more people, of jobs lost just because of the law we already have that the government will not enforce.

LEHRER: The law is an anti-dumping statute, "dumping" being the selling of a product cheaper here than it's sold in Japan, Korea or wherever it's manufactured. In 1976 the International Trade Commission found Japan guilty of illegally dumping color TVs in the United States, and ordered fines be paid. By 1980 those fines totalled $660 million, but not a dime has yet been paid. That's because the Carter administration negotiated a settlement whereby the Japanese paid only 10" on the dollar, which the American TV industry is still challenging in the courts. The industry claims such lax enforcement by the U.S. has encouraged Korea and Taiwan to join the dumping of cheap TV sets in the U.S., and last month it initiated new complaints against those two countries as well.

1st WORKER: Part of the government problem of the system right today, too, is the present administration hides behind the last one. In other words, Strauss was in when this dumping fine was brought down to 10" on the dollar, and then they all -- all that this present administration is saying, "We didn't do it. We accept -- assume that problem." But somebody in the end of the line has got to accept that problem and make it right.

3rd WORKER: I don't think protection's what we're asking for. I think we're just asking for the laws to be enforced that we already have in effect. Just the laws. We don't want protection. We can outwork anybody. We have proved that. But what did the U.S. government do? What did they do to us? That's the same as a cop-out or a sell-out saying, "A person under us did all this." It's not right. The law is there to be enforced.

4th WORKER: This union has supported and financed at least a dozen trips to Washington, D.C. to talk to the representatives. And we thought that that was the proper way, to go through the governmental channels, not be militant, go through the channels, and surely our government people are there to help us. Well, you're in for a big surprise. They're there to listen, but they're not there to act.

2nd WORKER: People of the United States are going to have to look at all the elected officials from the local right on up through the federal level and see what their stand is on industry as far as American jobs. Jobs are what pays the bill for everybody, and they're going to have to look at that, and if the man or woman that they're looking at to elect is not sympathetic to that way of thinking, they're going to have to elect somebody else. And not somebody that says we are assuming a problem. They got to elect somebody that can fix the problem.

LEHRER: We hear the government's side of the story now from the Reagan administration's Undersecretary of Commerce for International Trade, Lionel Olmer. Mr. Secretary, why aren't you enforcing the anti-dumping laws?

LIONEL OLMER: Well, we think we're enforcing the anti-dumping laws as vigorously and as effectively as anybody conceivably could. I think one of the plant people mentioned that it is a problem that's been inherited from the previous administration. That problem was the conclusion of a contract between two parties, one being the United States government, and as a matter of law we felt that, and continue to believe, and the Justice Department so advises us, that our hands are tied as regards that contract negotiated under the Carter administration.

LEHRER: So you really are saying, "We didn't do it."

Sec. OLMER: The government did not apply the existing anti-dumping laws at that time. That is correct.

LEHRER: I know it's easy to look back on another administration, but I'm going to ask you to do that. Do you think the Carter administration was right in allowing that 10" on the dollar settlement?

Sec. OLMER: First, I'd like to dispute the numbers, if we had some time. Let me directly answer your question. Absolutely not. I think they were dead wrong, and I think they deserve to have been fixed for it, and the Congress did make some effort in that regard. The Treasury Department of the United States had the responsibility for the enforcement of the anti-dumping laws. In 1979 that was transferred to the Commerce Department, and by 1980 we had the responsibility. That was a responsibility that for years and years and years administered in the Treasury Department, and it was because largely, in my judgment, of Congress' dissatisfaction with the way Treasury handled it in this case that we got that responsibility. Now, since we've had it, in the roughly 2 1/2 years that we've been in office, those laws have been enforced, not only vigorously, but sometimes to the yelps and squeals of many foreign exporters as well as U.S. importers. For example, the Japanese are now the honorary holders of the record. They have some one-third of all of the anti-dumping and counterveiling duty orders outstanding in the entire world. And they tell us that we're exhibiting the most stern protectionist tendencies in the vigorous enforcement of these laws. So I don't think it's fair to say that we haven't been vigorously enforcing them.

LEHRER: Mr. Secretary, in your 2 1/2 years you've had a chance to look at the Bluffton thing specifically. Do you feel that that Bluffton plant and the Corning Glass company are victims of unfair foreign trade?

Sec. OLMER: Well, I think that certainly foreign imports have been a cause of injury to that plant. But the gentlemen from Bluffton said jobs are what's at stake, and I couldn't agree more. I mean, it's a terrible thing to lose a job whether it's because of management inefficiency or foreign exports. I'd like to point out a couple of things. One in every eight jobs in manufacturing owes itself to exports, to international trade. We've got some five million jobs in total directly dependent on keeping as open an international trading system as we can. I mean, the government isn't asked to, nor do I think it's a proper role of government, to involve itself in Corning's decision to operate a joint venture with Korea for Korea to make television tubes that'll go into Korean television sets to be exported to the United States. It's a management decision. Nor do I --

LEHRER: And Corning is in fact doing that?

Sec. OLMER: Oh, with Brazil, with Mexico, with Korea and soon with India, and I believe even sooner with China. I mean, that's a management decision, and that's, I think, part of the ups and downs of the international trading system. Corning, as I understand it, will be increasing the employment rolls at its remaining plant similar to this one in Pennsylvania, and I don't know quite what the net loss will be, but it isn't going to be -- I mean, it's going to be significant, and it doesn't affect these people. I understand that. I mean, it's not the proper role of government, in our view, to involve itself in what are essentially management judgments about the keeping open and closing of plants in the country. My point about foreign exports is that the number 35% is a little misleading. That includes the foreign-owned but U.S. located manufacturing. There are some 2,000 jobs that have been created by the relocation to the United States of Japanese and Taiwanese and Korean television assembly facilities.So it isn't a zero-sum game. That occurred as a consequence of the findings back in the late '70s.

LEHRER: Thank you.Robin?

MacNEIL: Now the way it looks from Bluffton, Indiana. Bob Perry has worked at the Corning plant for all of its 18 years. He is president of Local 1012 of the American Flint Glassworkers Union. He joins us tonight from public station WFYI in Indianapolis. Mr. Perry, first of all, Secretary Olmer says that while foreign competition may have been one cause of injury, that you also have to look to management for its decisions on where it puts the emphasis. What's your opinion on that?

BOB PERRY: Well, that's probably true.The management does have that right to that decision, but still, you know it makes no difference whether it's a Corning tube coming into the United States or a Japanese or from Korea or where, there ought to be a tariff enough on that there to raise the price of a TV to the same price that we have to sell them.

MacNEIL: He says that, rather like one of your coworkers on that bit of tape we ran earlier, that the decision on the Japanese fines is really out of their hands. What do you think about that?

Mr. PERRY: Well, I think that that's wrong. I think that they're the ones that made the decision to negotiate this here for 10" on the dollar, so why wouldn't they be the ones that could reinstate it?

MacNEIL: Well, he says it was the Carter administration, the previous administration that made that decision.

Mr. PERRY: It makes no difference whether it was a Democrat or a Republican administration, you know. They've all got the same jobs, and they all should be doing their jobs.

MacNEIL: You think the Reagan administration could either abandon that decision or ask the Japanese to renegotiate it? Is that what you think?

Mr. PERRY: I think that they ought to be doing something other than setting up there.

MacNEIL: Well, he says -- now, Secretary Olmer also said -- you just heard him say the Reagan administration in the 2 1/2 years it's been in is enforcing the anti-dumping laws vigorously. What do you feel about that?

Mr. PERRY: Well, why is it that Korea and Taiwan have just had charges filed against them if that's the case? The Japanese are still fighting in courts over the other ones, so it wouldn't do no good to file charges against them. The dumping is still being done there. It's unfair competition to our people.

MacNEIL: The charges filed against the Koreans and the Taiwan came from the television industry, not from the government. Is that right?

Mr. PERRY: It came from the COMPACT --

MacNEIL: The COMPACT group, which is a group formed by the industry and unions in this country to preserve the American TV-making capacity.

Mr. PERRY: That's right.

MacNEIL Now, so you're saying because that suit had to be brought by that group it means that the government is not taking action to enforce this?

Mr. PERRY: That government, from what I can see, is taking no action.It seems to, you know, take an awful long time to get a case through them people except for a pay raise.

MacNEIL: What would you like the Reagan administration to be doing?

Mr. PERRY: I'd like for them to be enforcing these laws that is already on the books. You know, it's bad that we have to go through courts to get our federal government to enforce laws that is already there and has been proven that they're being broke. You know, you break a law and then you turn around and you have to go through courts to fight to get the fine. It's just not right to the working people.

MacNEIL: What do you say when Mr. Olmer says it isn't a zero-sum game, that a lot of these foreign manufacturers, as a result of the finding against the Japanese, have opened plants here and they have created jobs? He said 2,000 jobs for Americans in this country.

Mr. PERRY: Well, I'm sure that that has happened, and I hope they continue to do it, but it's -- they still are competing now against the foreign market too, and I think you'd find out if you'd ask them that there is unfair competition there, even, you know, among themselves.

MacNEIL: Does your union local believe that if the Reagan administration had acted differently your plant today in Bluffton would still be open?

Mr. PERRY: Well, not necessarily.Can I just say the Reagan administration, I'd have to say, the Carter administration, the Reagan administration and maybe even the one before Carter.

MacNEIL: But that if the government had acted differently, you and your fellow workers wouldn't have lost your jobs today. Is that what you're saying?

Mr. PERRY: That's true. You know, as of January the 4th they told us that the competition coming into the United States was only about 20-some percent, but they seen it going to 30, and after this all started, it's clear up to about 35% now.

MacNEIL: Well, thank you. Jim?

LEHRER: Mr. Secretary, could the government and should the government, regardless of administration, have prevented this from happening?

Sec. OLMER: Well, it's a difficult question to answer, Jim. I mean, the government cannot investigate --

LEHRER: Well, you heard what Mr. Perry says. Mr. Perry says you could have and should have.

Sec. OLMER: Well, I don't think that it could have been avoided entirely. I think the fact of the matter is that foreign competition at some point had to be seen as rising to a level that would give American manufacturers a rough time, and for reasons which don't relate to unfair trade practices. I mean, it's clear that American manufacturers are going off-shore because of lower wage rates, because of labor-intensity in the particular part of the manufacturing process, and to a variety of other things.With respect to that agreement, it is still a matter --

LEHRER: Let me just throw that by Mr. Perry. Mr. Perry, what do you think of that, that it's not -- well, you heard what he just said. It's not just the foreign competition; that this thing might have happened anyhow because of wage rates here in the United States, labor intensity. You heard what he just said.

Mr. PERRY: I don't agree with that one bit because when you end up -- their hourly rate might be a little bit cheaper, but when you add everything into what the Japanese give their workers, then it comes out about even. Now I can't figure out how they can ship a TV set or anything else across the waters cheaper than we can ship it to a customer from here in the United States. So there has to be a dumping there.

LEHRER: And what about his complaint, Mr. Secretary?Mr. Perry says that dumping is still going on as we -- you're saying it's still happening right now, right? That you can go out and buy the same TV set that's made in Japan or Korea or Taiwan, same set, cheaper here than you can buy it overseas?

Mr. PERRY: Yes, sir.

LEHRER: Is he wrong?

Sec. OLMER: I think he is wrong.

LEHRER: Where could we prove or disprove that, Mr. Perry?

Mr. PERRY: By going to Japan and pricing a TV set and then coming back to the United States and pricing the same TV.

Sec. OLMER: We've done that.

LEHRER: And that isn't happening?

Sec. OLMER: Well, with respect to Japan it does not now seem to be happening.

LEHRER: What happened?

Sec. OLMER: With respect to Korea and Taiwan the case has just been filed in May, and we are investigating it.

LEHRER: What about his point, though, that it's the industry that had to do it? Why didn't the government? He's upset because the government didn't take action on its own.

Sec. OLMER: Well, in the first place, we had a near-500% increase in the workload in anti-dumping and counterveiling duty suits. They're enormously complicated, and given the fact that we rely so heavily on a relatively open international trading system, we simply can't say, "You're guilty and you've got to prove yourself innocent." We have to aggregate evidence, we've got to make sure that we're comparing television sets sold in this country that are reasonable approximations of the television sets sold in Japan or Korea or Taiwan. It takes a long time to acquire the data. If on every suspicion we mounted an investigation, we'd have a federal bureaucracy several times larger than it is in the present Commerce Department, and I think that the industry has got to be given the responsibility of saying to its government, "Hey, we think there's a problem. We think there is dumping or we think there is government subsidies involved." When they do that we take over.

LEHRER: That makes sense, doesn't it, Mr. Perry?

Mr. PERRY: Well, from his own office they said that they have to have somebody complain even though they know what's going on. This is one trip in Washington that they told us this.

LEHRER: Is that right?

Sec. OLMER: If I knew -- if I had a reasonable persuasion that there was an unfair trade practices, you're damn well -- I would not wait until someone filed a complaint. That's absolutely not the case. At least as --

Mr. PERRY: Let me say one other thing. While we was in his office we was told that in 60 or in 81 --

LEHRER: Whose office now are we talking about?

Mr. PERRY: This is these guys' office --

LEHRER: Mr. Olmer's office?

Mr. PERRY: Right, it was speaking to one of their lawyers. They said that in '80 and '81, 60% of the TVs that was imported into the United States came through Taiwan, tariff-free. Now, you know this is wrong. The poorest people in the United States has to pay taxes, and there is no reason why you let these undeveloped countries come into the United States tariff-free.

LEHRER: We've got to go, but don't go away, Mr. Secretary. We'll be back. Robin?

MacNEIL: Also with us in Indianapolis this evening is the congressman who represents Bluffton, Republican Dan Coats. He sits on the Energy and Commerce Committee, which is involved in trade legislation. Congressman Coats has sponsored a bill to make an affected industry a party to any settlement between the U.S. government and a foreign country. Congressman, this is your district. You've been involved in this case. What do you think the government should be doing about it?

Rep. DANIEL COATS: Oh, I think there clearly has to be a more expeditious way of enforcing the laws that are on the books. I introduced the legislation that I -- for the basic reason that I was extremely unhappy with the way that the Carter administration or any administration negotiated away a settlement of a specific finding of a violation of the law, of dumping, negotiated it away at 10" on the dollar without the consent of the industry.

MacNEIL: Could you explain to me simply how your legislation, if it were passed, would have helped the Bluffton plant in this case?

Rep. COATS: My legislation specifically indicates that no administration, whether it's a Republican administration or a Democratic administration, can negotiate away a settlement or arrive at a settlement on an anti-dumping case without the consent or working with the industry. This is the piece of legislation that COMPACT is most desirous of seeing enacted, and I think it's important to point out that in this case management and labor are working together. Eleven labor unions and four corporations are working together to specifically propose a piece of legislation not to raise the tariff barriers, but to enforce adequately the laws that are on the books. And I think there's a great deal of dissatisfaction and frustration as expressed by Bobby Perry that those laws are not enforced and they have not been in the past, and we need to make sure that they are in the future, and are done so in a quick way.

MacNEIL: In your opinion as a Republican congressman, are they being properly enforced right now?

Rep. COATS: Well, we met with Secretary Baldrige and Mr. Olmer also, and receieved their very strong assurance that they were being enforced and that they would be enforced. In fact, Secretary Baldrige said, "I will not let that happen under my administration." I think the proof will be in the pudding. This latest filing which has just been made will put Commerce to a real test. Based on a finding of illegal dumping I would hope that Commerce and the administration would act very quickly because the key thing here is to send a signal to all these countries that have looked at the Japanese situation and have made the determination that, "Well, let's go ahead and dump because it won't make any difference. So we will -- it takes 10 years to get anything done in the United States and a new administration will be in place, and then we'll negotiate with them and we'll get out of it somehow." We need to send a signal to them that this is no longer going to be the policy of the United States.

MacNEIL: And are you in favor of more protection for industries like the American TV-tube manufacturing industry?

Rep. COATS: I've taken a somewhat different approach than protection, and the statistics you cited and Mr. Olmer cited are the reason why. One out of five jobs in Indiana is estimated by the Indiana Department of Commerce to be due to exports. We send a great deal of grain and sardines overseas. We export a lot of manufactured products just from my district. I think trade barriers and trade protection would be very detrimental to the very people that I represent. On the other hand, I think it's absolutely critical that we address ourselves to the question of our access to foreign markets. This country is going to recover and be a world leader and raise the standard of living for the people of the United States if we can continue to export vigorously around the world. Trade barriers will prevent us from doing that. But I do favor some type of reciprocity legislation that will basically say to the rest of the world, "We want to open our markets to you, but it's going to be conditioned on you opening your markets to us. And in those areas that we can produce better and more effectively, we want to be able to sell in your country, and we will allow you access to our markets." I think we can compete. I think we can compete effectively, and we're going to turn this thing around. If we close off our gates or put up the barriers now at our shores, we're going to be in trouble in the future.

MacNEIL: Well, thank you. Jim?

LEHRER: Quickly, Mr. Secretary, do you agree that the United States needs to send a different signal abroad on dumping?

Sec. OLMER: Oh, I think we've been sending a signal, and it's been received.

LEHRER: What about the Congressman's legislation to not arrive at any kind of agreement without the consent of the industry involved?

Sec. OLMER: Well, we've told Congress time and again we've no intention of applying that authorization in the present act. To the best of our knowledge it's only been used once in history, in that instance.

LEHRER: Now, Mr. Secretary, now would you tell Bob Perry in Indiana why you cannot, in your opinion, go in and change this agreement that the Carter people negotiated?

Sec. OLMER: Well, in the first place, the case has been brought to the Supreme Court on two occasions, and federal appellate courts along the way have upheld the authority of the government to negotiate that settlement. And it is a little unfair, a little disingenuous to say that it's 10" on the dollar. Ten cents on the dollar, if you use a calculation used by the then Treasury Department, which has since been discarded and is not the standard that's used by the United States since 1960.

LEHRER: Okay. Mr. Perry, in a word, does that add up to anything to you?

Mr. PERRY: I think it's baloney.

Sec. OLMER: Could I make a comment about the existing cases?

LEHRER: We're out of time. I'm sorry, Mr. Secretary. We have to leave it with baloney.

MacNEIL: Congressman Coats and Mr. Perry in Indianapolis, thank you for joining us. Secretary Olmer, in Washington, thank you. Good night, Jim.

LEHRER: Good night, Robin.

MacNEIL: That's all for tonight.We will be back tomorrow night. I'm Robert MacNeil. Good night.