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Reagan Calls for Voluntary Export Restraints on Machine Tools

May 20, 1986 GMT

WASHINGTON (AP) _ President Reagan today called for voluntary export restraints by a group of countries - Taiwan, West Germany, Japan and Switzerland - that have seized a majority of the U.S. machine tool market.

The administration said the action will seek to reduce overall machine-tool imports, which now account for about 70 percent of the U.S. market, to near or slightly under 50 percent.

The program also calls for $5 million a year over the next three years in federal matching funds to ″help the machine tool industry make advances in manufacturing and design.″

Reagan took the action, the third trade initiative of the past week, as the House prepared to begin debating a Democratic-sponsored trade bill that the administration opposes as protectionist.

Commerce Secretary Malcolm Baldrige, who announced the president’s plan, denied that the announcement was deliberately timed to blunt support for the House bill.

″No, but I hope it helps,″ Baldrige told reporters.

He said the move would demonstrate to Congress that the executive branch was capable of moving ahead on trade issues without further legislation.

Today’s action was designed to provide relief for the import-battered machine tool industry. Machine tools include sophisticated, computer- controlled equipment used for making other tools and for parts, including defense parts.

The machine-tool industry had requested import quotas on grounds that a weakened domestic industry could jeopardize national defense needs.

But Reagan withheld for six months a decision on whether to rule that national defense had been jeopardized by the imports. That will give the voluntary program a chance to work, Baldrige said.

Within the last week, the administration also announced standby quotas on a variety of European food commodities - including white wine, beer and cheese - to protest Spanish and Portugese restrictions on U.S. grain and soybean imports; and prepared retaliatory action against Brazil to protest barriers in that country against U.S. computer sales.