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US smooths over ties with Europe -- at least for now

By Elizabeth PondStaff correspondent of The Christian Science Monitor / December 13, 1982



Bonn

So far American trouble-shooter George Shultz seems to be succeeding in postponing the most acute transatlantic troubles on his Dec. 7-19 European trip.

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For a diplomat of Mr. Shultz's temperament, that's half the battle. The secretary of state's style is less grand design than ad hoc, low-profile coping.

In his first week in Europe, Shultz's most conspicuous problems have been the threatened United States-European agricultural trade war, West-West differences over East-West trade, and - suddenly - leaked American plans to move US forces' European headquarters from West Germany to Britain.

Shultz's method of coping with the first two issues was the time-honored one of commissioning studies. His method of coping with the last was to deny that there would be any peacetime move but to acknowledge that under contingency plans the US headquarters might shift in wartime.

Thus, the impression given by American and European spokesmen after the unusual Dec. 10 meeting of five US Cabinet members and five European Community (EC) officials in Brussels was that the two sides will avoid a trade war for at least three months. A joint study has been ordered during that period to explore agricultural export subsidies and their effect on the market, along with possible adjustments.

In the interim - the experts' report will be presented to the Cabinet ministers in March - the US still maintains its threat to dump dairy products in the world market and undercut EC prices if the EC doesn't trim its protectionism. US Agricultural Secretary John Block stated this explicitly to reporters after the meeting. The European expectation, however, is that the Reagan administration will be able to hold the line against pro-dumping congressional opinion for at least the three-month span of the study. The American hope is that in this period the EC can come up with somewhat fairer competition for American agriculture.

Basically, even though the worldwide recession generates strong domestic protectionist pressures all around, both sides of the Atlantic want to avoid a trade war. Memories of the acrimonious ''chicken war'' some years back make the US and Europe reluctant to repeat that experience. And this fall's resolution of the fight over European steel exports to the US gives the $159 billion per year trading partners hope that they can manage a cease-fire in agriculture, too.

Beyond that, no one sees any long-term solutions yet. The US, which has seen its farmers' incomes drop, thinks its very efficient agriculture deserves more of the world market - and it warns that managed market-sharing is not good enough. But the EC, with the faltering French economy in the lead, insists it will not dismantle the huge food subsidies that currently eat up two-thirds of the community budget.

US-European coordination of East-West trade has moved forward a bit following Washington's recent dropping of sanctions against Western European firms that exported US-licensed equipment for the new Soviet gas pipeline. A common approach is not yet clear, however, and US ambassador to West Germany Arthur Burns warns that ''long and difficult negotiations on ways of carrying out the agreed measures are undoubtedly still ahead of US.''

It is hoped, however, that the five US-European studies that have been agreed to can develop some broad consensus. Shultz has specified that these studies be ready by the next NATO foreign ministers' meeting next June.

Given West German resistance to defining East-West trade in narrow security terms, the studies will not be done under NATO's auspices. Shultz has indicated that the tightening up of Western restrictions on the transfer of militarily applicable high technology (including gas and oil technology) will be dealt with in the Paris-based COCOM. The energy demand-and-supply and export-credit studies will be written within the Organization for Economic Cooperation and Development (OECD). It is not yet clear which organization will study East-West economic relations.

The brouhaha over plans to move America's European military headquarters broke out when London's Guardian newspaper reported that a ''highly classified guidance document'' in the Pentagon had ordered this move to be made within four years. The implication - one highly disturbing to West Germany - was spelled out by the Guardian as a Reagan administration conviction ''that NATO forces will not be able to hold West Germany in a European war.''

The US hopes Shultz's denial of any intention of shifting headquarters in peacetime will reassure the West Germans.