Congress Expected To Tighten Trade Policies Toward Europe

WHILE the European Community is mired in economic and political turmoil, the United States may shape its most cogent set of European policies in recent history.

Transatlantic relations have been fluid in the aftermath of the cold war, as East-West barriers have broken down and national security makes an uneasy shift into economic and trade terms.

Judging by their statements during and after the election, the members of the upcoming 103rd Congress, together with the Clinton administration, favor a more pro-active approach toward issues ranging from US competitiveness to sharing the costs of US armed forces stationed abroad.

Capitol Hill lawmakers, including 110 new House of Representatives members, will likely reflect what the "America First!"-toned 1992 campaign unveiled: an electorate with muted concerns for international affairs, a distaste for foreign aid, and an increasing interest in protecting US markets and jobs. Key issues include:

Trade: The spiraling US merchandise trade deficit has fueled concern that America is falling behind global competitors due to faulty government policies. Worried about the weakening European market for US exports, both Congress and President-elect Clinton are expected to take a tougher stand on reciprocity and rapid punitive action against partners with abusive trade practices.

Capitol Hill trade mavens, including Sen. Max Baucus (D) of Montana, who chairs a Senate Finance subcommittee have long called for better access to overseas markets. Both publicly faulted US negotiators during and after the recent oilseed agreement talks for allowing Europe to subsidize production that will continue to displace US exports.

Legislators who lean more toward fair than free trade, or fall right in between, will probably hold sway. Laura D'Andrea Tyson, Mr. Clinton's choice for chairwoman of the Council of Economic Advisers, said at an Institute for International Economics briefing that the General Agreement on Tariffs and Trade will fail to eliminate many unfair trade practices. Many in Congress agree with her position.

Europeans may soon be challenged in an area that is loosely defined as industrial policy. Ms. Tyson uses Europe's biggest industrial export success story - the European Community-subsidized Airbus - to argue that the US government should go into partnership with cutting-edge American industries to nurture domestic production and push US products overseas. Her calls for investment tax incentives and greater government investment in private industry are in accord with many congressmen, who have seen manufa cturing industries in their districts suffer.

Burden-sharing: In the absence of an international plan to continue assistance for the ex-Soviet republics, activist senators propose bilateral support to diffuse potential problems. Sen. Richard Lugar (R) of Indiana, a senior foreign policy voice on Capitol Hill, has worked for the past year with Sen. Sam Nunn (D) of Georgia, chairman of the Armed Services Committee, on a plan for nuclear disarmament.

Senators Lugar and Nunn propose to pay $5.5 billion over the next 20 years to Russia and other former Soviet republics for uranium removed from nuclear weapons. The senators believe the US will provide the money once Ukraine's parliament ratifies the START arms control treaty. But in an interview, Lugar warns that if the US tries to share the cost with Europe and Japan, the project will become bogged down in parliamentary debates and eventually derail.

Nonetheless, congressional campaign rhetoric was peppered with demands for US allies to shoulder a larger portion of common defense costs. Many lawmakers say the International Monetary Fund, the World Bank, and the United Nations should take the lead in providing disaster relief and resolving regional conflicts.

International economic cooperation: Sen. Paul Sarbanes (D) of Maryland, chairman of the Congressional Joint Economic Committee, says he hopes that the new administration will push for changes in overseas economies to help the US. In his monthly assessment of the US economy, Senator Sarbanes has blamed the Bush administration for failing to create conditions abroad that promote US exports. The Bush administration tried unsuccessfully to coerce Europe and Asia into stimulating their economies enough to rev erse the slide in demand for US products.

Europeans counter that the US must truly honor its "America First!" rhetoric by doing more to confront its own domestic problems, including runaway spending and the burgeoning government deficit.

But House Speaker Tom Foley (D) of Washington says the prospects are bright. In a briefing following recent meetings between Clinton and a group of legislators ranging from conservative Republicans to liberal Democrats, he said he believes moderate spending proposals and deficit- reduction measures will prevail.

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