WASHINGTON - On the same day last month that he signed the U.S.- Canada Free Trade Agreement, President Reagan vetoed the textile and apparel bill. He was right both times.
The Canadian accord holds great promise for both countries. The textile bill, as the president said, amounted to "protectionism at its worst."Fortunately for the American consumer, the House sustained the textile veto. The bill is dead for this Congress.
We will have to wait a while on the Canadian agreement. Canada's Senate will vote on the proposal at some point after Canada's elections on Nov. 21.
Liberal Party leader John Turner has charged that the accord would turn his country into "a colony of the United States." This is pure demagoguery, but demagoguery is not forbidden under the rules of parliamentary speech.
The opening of free markets on both sides of the border would benefit producers and consumers alike.
Here at home, the long debate over the textile bill was marked not by demagoguery, but rather by provincial politics. Textile and apparel industries employ an estimated 2 million persons. It is a fair presumption that all of them vote.
Even so, when he was campaigning in South Carolina last March, George Bush courageously opposed the bill. He suffered no apparent adverse consequences. Voters in the mill towns may have a better understanding of elementary economics than their representatives on Capitol Hill.
The bill would have imposed draconian limits on imported goods. It would have frozen imports of non-rubber footwear at the levels of 1987. It would have forbidden the next president even to discuss textile quotas with other nations. It was, in short, a very bad bill.
Protection of America's textile industry dates from 1789. It is today the most protected of all our domestic industries.
Granted, some parts of the industry are hurting. The number of jobs has dropped in half since the end of World War II. Depending upon whose statistics you trust, foreign nations have taken over from 26 percent to 54 percent of the market.
In a recent report, the non-partisan Office of Technology Assessment reached an ominous conclusion: "If penetration of United States apparel markets were to continue at the pace of the last decade, domestic sales of U.S. apparel firms would approach zero by the year 2000, while two-thirds of the U.S. textile market would be served by foreign imports."
That estimate was predicated upon a large "if." The rate of penetration appears to be dropping. Imports are down for the first eight months of this year. U.S. manufacturers of apparel are perfectly capable of competing in the domestic market. All that is required is that they produce top-quality clothing at fair prices. It seems little enough for the consumer to ask.
Neither is the textile industry a candidate for extinction. Over the past eight years, owners of American mills have poured $18.6 billion into highly automated machinery. They have chalked up a 4.6 percent increase in productivity every year for the past 10 years. Their profits are above the industrial average. Their plants are running at 90 percent of capacity.
The bill would have trampled upon scores of existing trade agreements and clearly would have violated the spirit, if not the letter, of the new Canadian accord. Domestic consumers would have seen their annual bill for textiles and apparel go up by $200 to $300 per family.
Yes, without this bill, some of the 5,000 textile mills and some of the 20,000 apparel makers will go out of business, but this is the way the marketplace is supposed to work. A healthy economy can't go much of anywhere on crutches.