EC Trade Official Blasts `Aggressive' US Stance On Eve of Bilateral Talks

CLINTON administration officials will hold their first round of bilateral talks with the European Community this morning in Washington.

Today and tomorrow, the EC's Commissioner for External Economic Affairs, Sir Leon Brittan, will meet with United States Trade Representative Mickey Kantor, Commerce Secretary Ron Brown, Treasury Secretary Lloyd Bentsen, and chairwoman of the White House Council of Economic Advisers Laura D'Andrea Tyson.

While EC officials note the session is, in part, designed for new colleagues to get acquainted, the atmosphere is likely to be strained.

Sir Leon's visit comes at a time of rising trade tensions, and directly in the wake of two US decisions to take tough action against the EC for violating anti-dumping laws and committing unfair government and business procurement practices.

First, as a counter to rampant dumping practices, the Commerce Department slapped tariffs on steel produced in 19 countries, including Canada, Mexico, Japan, and the EC.

Second, the US plans to retaliate against EC policies that have allowed preferential purchasing of goods produced by EC-based companies over foreign (US) competitors in telecommunications, power generation, and transportation equipment.

And European automobile manufacturers are worried about possible US efforts to limit the US market for Asian-and-European-manufactured vehicles.

Sir Leon blasts the US posture toward Europe and other trade partners as "aggressive." He says it is "particularly unfortunate and inopportune at the beginning of a new US administration," and works against the resolution of the much-disputed General Agreement on Tariffs and Trade (GATT). Urgent concerns

Sir Leon has said he intends to raise these concerns "as a matter or urgency" with US officials.

A senior White House official says the idea that Clinton policymakers are assuming a more aggressive stand than the Bush team is unfounded. "There are no major changes in this stand."

Indeed, US Commerce and trade officials contend that by deciding to impose added duties on roughly $1 billion worth of European steel exports and prohibit awards of US federal contracts for EC goods and services, they are carrying through action that was well under way before the transfer of power from President Bush to President Clinton.

If GATT were resolved, "then there would have been greater discipline within the world-trading system, and a framework in which to deal with disputes such as the US-EC steel problems," says the White House official. But as GATT talks stall, he says, "each country will continue to rely on and follow its own national trade law - and that is dangerous if trade tensions are rising."

Sir Leon, who objects to what he perceives to be "unilateral bullying" says he is also distressed over a number of pending legislative developments (a Buy America bill, for example) and government practices (such as US states and other jursidictions that Sir Leon claims discriminate against non-US bids for contracts) that amount to protectionism.

But Capitol Hill lawmakers are pressuring the White House to act swiftly against US trade partners that fail to provide fair market access for US goods and services.

"There is deep concern to find out more about the trade policy of the Clinton administration," Ella Krucoff, spokeswoman for the EC delegation here said.

Mr. Clinton has reiterated his commitment to the principle of international-trade reciprocity and pledged rapid punitive action against foreign companies and governments that abuse that equal relationship. Trade style questioned

However, while the new administration says it is a proponent of free trade, many trade partners see the elements of "fair" or "managed trade" emerging.

Geza Feketekuty, senior policy adviser to a senior US trade official, asserts that it is not unusual for new administrations to talk tough when they first enter office. He explains that when former Trade Representative Carla Hills took over as the nation's top trade negotiator, she vowed to pry open tough-to-crack Japanese markets "with a crowbar." Yet US policy during the Bush years was not unreasonable or protectionist, he says.

Sir Leon and other officials in world commerce are wary that what may have been rhetoric in days past is fast becoming a reality.

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