A Mellowing Mood

The U.S. and Europe have long seemed to be on a collision course over trade problems. In America powerful Administration officials and Congressmen have grumbled loudly that U.S. goods are often discriminated against abroad; protectionists have argued that the U.S. should restrict imports in retaliation. Across the Atlantic, politicians and officials of the Common Market countries have commonly replied that the U.S. expects the rest of the world to pay for its own economic mismanagement by helping it to a trade surplus that it has done little to deserve. But now the mood has turned mellower on both shores of the ocean, raising hope that the two sides can substitute reason for rhetoric when they actually get to the bargaining table this fall for a new round of world-trade talks.

In Washington William Casey, Under Secretary of State for Economic Affairs, recently told a House subcommittee that he has found much common ground with Europe; he believes that "our relationships with the European Community are moving in the right direction." In Brussels last week, Sir Christopher Soames, a vice president of the Common Market Commission, amply justified Casey's optimism. Speaking to a conference of European and U.S. business leaders organized by TIME, he went out of his way to reassure the Americans on two hot trade issues: preferential trade agreements and what are called "reverse preferences."

Under preferential trade agreements, the Common Market grants products of certain countries--Moroccan oranges, say--especially easy access. In return reverse preferences would be extended to Common Market goods. The U.S. has long argued that the effect of such agreements is to restrict sales opportunities for American products--Florida oranges, for example --both in the Common Market and in neighboring countries.

Many of these agreements are with developing countries in Africa and along the Mediterranean, and Sir Christopher stressed that the Common Market still thinks it has a duty to help them. "Otherwise," he warned, "we run the serious risk of creating economic, followed by political vacuums, with all the dangers that that would involve for the Western world." But he added that "the Community does not seek to extend its policy of association and preferential trade agreements beyond the limits which history and close geographical links have made necessary."

Sir Christopher also said that the Community will not make reverse preferences a condition of granting trade concessions to any country. In other words, the Common Market will lower or abolish tariffs against goods from certain friendly countries as it sees fit, without demanding that they grant the same breaks to Common Market goods. "Any Mediterranean country, any present associate [a nation that has an agreement with the Common Market], any new country will be free to use its own tariff sovereignty."

Hint. Turning to the trade talks that are to start later this year, Sir Christopher stressed that they should include "serious negotiation" on agriculture. He thus dropped the first hint that the Common Market is willing to discuss modifying its expensive and controversial farm policies, which are the source of another major U.S. trade complaint. By a combination of lavish subsidies and import taxes, the policies create large surpluses of some products--notably wheat, sugar and butter--and create artificial shortages of meat. The U.S. insists that these policies also operate to shut out American farm products that could be imported at prices that would lower the cost of food to the European consumer.

The general goal of this year's trade talks, said Sir Christopher, should be to liberalize world trade on a reciprocal basis. Speaking of relations between the U.S. and Europe specifically, he said: "We should seek together to do all we can to resolve sources of frictions between us and cement our various cooperative endeavors. Domestic pressures on both sides of the Atlantic will be exerted that could wreck what, between us, we hope to do. But given patience, cool tempers and creative intelligence, we should succeed." That is assuming quite a lot. The problems are highly technical and, on each side of the Atlantic, extremely emotional. But Sir Christopher's reasoned approach holds out hope for reasonable solutions.

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