World Of Business Trading Jabs

By ROBERT BALL

The history of trade relations between the U.S. and the European Community is a long chronicle of pots calling kettles black. Each side regularly accuses the other of protectionist practices. Occasionally, the verbal sniping erupts into action. Over the years, limited trade wars have been waged over such items as beef, chickens, citrus products, soybeans and even pasta. The set- piece battles may have rattled the media but did no lasting damage to the landscape.

Two events sent tensions rising again: the passage in 1988 of the U.S. omnibus trade bill, which provided an arsenal of retaliatory weapons; and adoption of the E.C.'s plan to create a single market by 1992, which Washington fears will entrench a Fortress Europe behind a Siegfried Line of trade barriers. Alleged European discrimination against American telecommunications equipment is the latest U.S. casus belli; the E.C., for its part, accuses the U.S. of playing "war games" with farm legislation in the current major round of international trade negotiations, the so-called Uruguay Round, which culminates in December.

The martial metaphors and atmosphere of antagonism are perhaps inevitable in any situation in which interest is set against interest. But they are not appropriate to the present state of transatlantic trade, which is one of near equilibrium moving toward a modest U.S. export surplus. As recently as 1987, in the aftermath of the overvalued dollar, the U.S. ran a large deficit in trade with the Community, but once the dollar came back to earth, that deficit dwindled, just as the experts said it would. Today the E.C. is no longer a factor contributing to the U.S. trade deficit.

In fact, these two supposed antagonists sell each other some $7 billion worth of goods every month. U.S. exports are broadly based, not just animal feed, as some people seem to think. Europe is the biggest market for U.S.-made computer and data-processing equipment, and -- surprise, surprise -- General Motors and Chrysler together sold nearly 60,000 U.S.-built cars in Europe last year, and expect to sell about 80,000 this year.

To be sure, the Community's Common Agricultural Policy is a costly absurdity, milking European consumers to keep marginal farmers on nonviable land and hurting efficient producers when the resulting surpluses are dumped on world markets. Yet despite the CAP, the Community is a net importer of foodstuffs, and a group of twelve countries that consistently runs a trade deficit with the rest of the world can hardly be described as fundamentally protectionist. A peek inside the global figures discloses that West Germany is the only E.C. country regularly racking up big trade surpluses within the Community and outside it as well. Subtract the West Germans and their world- record exports -- more than those of the Japanese, as Chancellor Helmut Kohl likes to boast -- and the E.C. would have a trade deficit of almost American dimensions.

Hopes for businesslike treatment of U.S.-E.C. trade issues are encouraged by the personality and talents of the U.S. Trade Representative and chief negotiator, Carla Hills. She is seen in Europe as tough and competent but not much given to grandstanding or gladiatorial gestures. That is a good combination because Europeans bridle at the occasional American tendency to clothe naked commercial interest in the language of moral philosophy -- "sanctimonious humbug," as a former British Trade Minister calls it.

For the U.S. and the E.C., the principal trade problem is not with each other but with Japan, which continues to run huge surpluses in its trade with both. If trade issues must be expressed in military terms, one maxim of sage strategists is not to fight two-front wars, if they can be avoided.