And Now, a Trade Hassle

THE world monetary agreement reached over the weekend concludes only the opening round in the U.S. international economic offensive. The offensive's Phase II, already under way, is the U.S. attempt to persuade foreign governments to tear down tariffs, quotas and other barriers against American exports of goods and capital. The U.S. was long maddeningly vague on just what trade concessions it wants, but lately it has served up a list of specific demands. They have made the trade talks clearer, but not easier. Unlike the round-table currency negotiations, the trade bargaining consists of a series of bilateral talks with Japan, Canada and the Common Market Six, each involving quite different controversies and prospects for agreement.

In U.S. eyes, Japan is the most egregious trade offender. It maintains tariffs up to 25% on some goods, plus tight import quotas and restrictions on foreign investment in many Japanese industries. Last week the U.S. won some minimum concessions from the Japanese, who agreed to cut tariffs on 25 items, including autos, cosmetics, computers, refrigerators and soybeans. On other demands, the U.S. seemingly got nowhere. The Japanese did say that they would abolish import quotas on light aircraft and on some agricultural products, like refined sugar and bacon, but threatened to raise tariffs on these products. They also rejected a demand that they drop quotas on beef, oranges and fruit juices and refused to permit U.S. investment in Japanese computer manufacturing until 1974.

The U.S. stands a reasonable chance of making more progress when Prime Minister Sato visits President Nixon in San Clemente Jan. 6 and 7. The Japanese are in an embarrassing situation because they have continued to run huge surpluses in trade with the U.S. despite their howls about America's ''brutal" economic moves. Since the August "Nixon shokku,"'' Japanese exports have been running 20% or more above a year earlier, with the biggest increases coming in shipments to the U.S. Sato last week asked the Japanese ministries of finance, agriculture and international trade and industry to prepare lists of the maximum concessions that he can offer.

From Canada, Washington demands revision of an auto trade pact that limits duty-free shipments of U.S. cars and parts into Canada while allowing Canadian-built cars free access to the U.S. Nixon's negotiators have also asked Ottawa to loosen restrictions on spending by Canadian tourists in the U.S. Canada has some demands of its own; it wants, for example, to sell more uranium in the U.S. Canadian Finance Minister Edgar Benson indicates that his nation is in a mood to compromise. "If we are to have good relations with the U.S.," he says, "we cannot continue having irritants between us that do not always make sense."

The Common Market is less tractable, and it is in a strong bargaining position. Its tariffs average less than those of the U.S. (6% v. 7%), and purchases by its six nations from the U.S. already exceed their sales in the American market by more than $2 billion a year. Nixon last week did win a promise from French President Pompidou that the Common Market will start trade talks with the U.S. "imminently." Those negotiations will be tough.

The U.S. demands that the Market suspend negotiations for preferential trade agreements with Austria, Finland, Portugal, Sweden, Switzerland and other countries, and that it equalize tariff rates on U.S. oranges and other citrus products with the lower ones levied on fruit from Spain, Israel, Tunisia and Morocco. Further, Washington wants the Market to adjust its complex system of farm-support prices, import levies and export subsidies so that they do not offset the drop in prices on U.S. farm goods that dollar devaluation will cause. These demands pose serious political problems for the Common Market nations. They protest, for example, that suspending the preferential trade-agreement negotiations would force them to renege on commitments already made to nonMarket countries.

Washington's cause has not been helped by the brusque negotiating style of William D. Eberle, Nixon's special representative for trade talks. Some French officials call him and his aides "Eberle's Commandos." In Brussels, Eberle snapped at one Common Market official who was registering astonishment at the U.S. demands: "I don't like people who nod their heads and fail to speak up." He has pressed for speed so importunately as to convince some Market officials that the U.S. is desperate for an agreement, and that the Market therefore can force a lowering of American demands by stalling.

In fact, Washington realizes that it can obtain only limited concessions quickly. The U.S. has already played its main cards--promises to devalue the dollar and to end the 10% U.S. import surcharge. In order to offer trade concessions himself, Nixon will have to seek legislation empowering him to start a new round of worldwide trade negotiations. Some Washington officials envision these talks as beginning a year from now and dragging on well into 1973. They may well be called "the Nixon Round."

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