Shoe imports: putting the right foot forward
President Reagan gave the boot to US import quotas on shoes this week. In doing so, he came down squarely on the side of free trade and left American consumers with the possibility of lower retail prices in the weeks and months ahead.
The quotas, which applied to non-rubber shoe imports from South Korea and Taiwan, were put in place four years ago by President Carter. At the time there was a danger of the American domestic shoe industry going under because of the influx of inexpensive imports. Since then the industry has taken firm steps to boots its productivity and efficiency -- so much so, in fact, that some analysts believe that it now has a likelihood of surviving a resurgence of imports.
Mr. Reagan, for his part, has always stood firm in his commitment to free trade. Precisely because of that support many Reagan watchers were startled by the President's decision to curb car imports from Japan. In the auto decision, however, support was growing in Congress for legislated cutbacks, assuming the White House did not itself reach a voluntary agreement. The final agreement with Japan was "voluntary" in the sense that no formal marketing quotas were reached as in the earlier shoe accords, or the still-existing quotas on steel imports.
The shoe decision once again says something about Mr. Reagan's craggy independence and astute sense of political timing. Lawmakers and shoe manufacturers from Northeastern and East Coast states have been lobbying hard for an extension of the quotas. The International Trade Commission, a US government fact-finding panel, recommended that the quotas be extended for Taiwan (the main US importer) but not for South Korea. Mr. Reagan bucked the lawmakers, domestic industry, and the ITC. And he wisely held off his decision until the last minute, presumably so as not to endanger the close House votes on his budget last week.
During 1980 domestic manufacturers produced some 395 million pairs of footwear, compared to around 366 million imports. So obviously US firms will have their work cut out for them in meeting the overseas competition. But there is no reason why the domestic industry cannot continue those modernization programs that will ensure its survival -- and success. In large part US and overseas manufacturers already produce for differing markets, with American firms essentially geared to "quality" lines and imports geared to a less-expensive, more disposable product. Taiwanese officials are already predicting a drop in prices of their shoes of between 12 and 15 percent, which should not only wear well with concumers but help the nation in its overall battle against inflation.
A good decision, Mr . President.
