Splitting Differences

THE ANNOUNCEMENT BY WASHINGTON THAT EUROPEan Community firms will be barred from bidding on an unspecified number of U.S. contracts sounded ominous. Made in retaliation for the E.C.'s refusal to open its $13 billion telephone- switching-equipment market to foreign bidders, it seemed just the sort of move that might presage a full-bore trade war.

Behind this setback, however, was Europe's agreement to throw open its $20 billion electric-utility market in exchange for Community access to the Tennessee Valley Authority and five other federal power administrations. Both sides say the compromise should allow them to focus on more important issues, like agriculture, still dividing them in the stalled Uruguay Round of the General Agreement on Tariffs and Trade.