Europe Awaits US Trade List

SEN. Bill Bradley ticks off a list of European trade practices the United States considers unfair: restrictions on imports of beef fed with growth hormones; limits on apples, paper, paperboard; local-content requirements for heavy equipment; restrictive government procurement practices; rules of origin for automobile imports; and subsidies for Airbus Industrie. Even though these European Community restrictions cost US exporters sales, Senator Bradley, a New Jersey Democrat, says, ``I'd prefer to see the practices listed instead of the countries,'' when President Bush publishes his list of trade offenders next week.

Mr. Bradley and other moderates on trade policy may well get their way. President Bush is close to deciding which countries, or practices, will be fingered as restrictive to US exporters.

Under the Omnibus Trade Act passed by Congress last year, the President must publish the names of trade offenders by the end of the month. Under the old trade law, the US could single out restrictive practices within individual industries. Under the new law, one provision, referred to as Super 301, allows the US to target an entire nation and not just a specific industry or product. Then it must negotiate with an offending nation for up to three years before countermeasures can be taken.

US trading partners, however, have lobbied hard to avoid the stigma and keep their names off the list.

``They [the trade restrictions] could become quite confrontational, especially as the media focus on them,'' says David de Pury, Swiss ambassador and delegate to trade agreements. Adds Fritz Leutwiler, the chairman of ABB Brown Boveri Ltd., a large European manufacturing company, ``I am afraid it [the US actions] could lead to additional tensions between the US and Europe.''

In fact, according to press reports, the US will not name Europe for the violations ticked off by Bradley. The US is concerned that it might send the wrong message to the Europeans at a time when they are writing the rules and regulations concerning European integration.

The US has also decided not to name South Korea, since the Korean government has liberalized its import rules within the past two weeks.

According to press reports, there is an intense debate within the administration over whether to name Japan as a trade violator. The State Department maintains that this could damage US-Japanese relations at a time when Japan is politically vulnerable. With the resignation of Japanese Prime Minister Noboru Takeshita, the US is concerned that it not appear to interfere with Japanese internal politics. But Commerce Secretary Robert Mosbacher and US Trade Representative Carla Hills believe it is important to keep the pressure on Japan.

It is also likely that Brazil and India will be included on the list.

Trade experts here at the University of St. Gallen's conference on Europe's further integration in 1992 warn that the list may have much wider ramifications than Congress expected.

Ambassador de Pury, for example, says the publicity may result in a ``sideshow'' as the US expends a great deal of effort on bilateral negotiations at the same time there is still a lot of work to do on the latest round of trade negotiations under the General Agreement on Trade and Tariffs.

``We have 20 months to go and we cannot afford to have sideshows,'' says Mr. de Pury.

In fact, Arthur Dunkel, director general of GATT, says he hopes the US takes its list of trade restrictions to the GATT negotiations under way in Geneva. ``If it helps to establish some new rules in areas where there are no rules - like in services - this could be positive,'' he says.

But Mr. Dunkel also says there is considerable concern that the US will abuse the new law. ``We are afraid some of those new rules in the trade act could be used or interpreted in a way which would be either incompatible with present or future GATT rules,'' Dunkel says.