Disputes between the United States and its European partners on steel exports to the United States and on participation in the Soviet gas pipeline project "have cast a cloud" over the ministerial meeting of the General Agreement on Tariffs and Trade scheduled for November, according to Britain's minister for trade, Peter Rees.
Unless these issues are resolved, "I can't see a harmonious GATT meeting," Rees told reporters here Thursday. The ministerial meeting, to be held in Geneva, is given high importance by the United States, which regards it as determining the agenda for dealing with the trade issues of the 1980s.
But this and other expressions of European displeasure with the pipeline decision, including a severely critical statement by British Prime Minister Margaret Thatcher in the House of Commons, do not appear to have altered the Reagan administration's hard-line position.
Undersecretary of Commerce Lionel Olmer reiterated yesterday that there would be no shift in the administration's position unless there is an appreciable change in the Polish situation. Imposition of martial law in Poland triggered the administration's ban on the sale of equipment by American companies for the Soviet gas pipeline late last year.
In an interview with European reporters yesterday, Olmer was asked whether a strict agreement on export credits to Europe could "turn the pipeline sanctions off." He replied that, in the abstract, that was possible, but "not likely" in view of long and unsuccessful efforts the administration had pursued to get a broad agreement on extension of credit to the Soviet bloc.
Olmer said in a subsequent telephone interview that the European Community's recent agreement to reduce export credit subsidies to the Soviet bloc was not, by itself, a "trade-off" for easing the pipeline sanctions. "The pipeline decision can't be uncoupled from Poland," Olmer said.
If European countries withhold their support from an extension of the GATT in retaliation for a tough U.S. attitude on steel exports and on the pipeline, it would be a blow to long-term American objectives on trade. The United States plans to propose new regulations covering trade in services and trade-related investment matters comparable to those governing trade, but Rees implied that there is little prospect of broadening the existing GATT structure to new areas, barring some American concession on the steel and pipeline issues.
The British minister said that he had complained to Secretary of Commerce Malcolm Baldrige, Deputy Trade Representative David Macdonald and other Reagan administration officials that the Commerce Department preliminary assessment that his government was subsidizing exports by British Steel Corp. made little sense.
He said that BSC "had been singled out" for an excessive 40 percent duty when the British government had not been subsidizing the company to boost exports, but to "restructure" it in a way that had cut capacity from 21 million tons to 13 1/2 million.
The British have taken their case on steel to the GATT, but "that takes time, and time is not on our side," he said. He said he had argued with Baldrige that the net result of U.S. dumping cases against British, French and Belgian steel makers will be additional sales by those companies in the German and Dutch markets, with more German and Dutch steel then finding its way into the U.S. market.
He expressed hope that the administration here will exercise "an element of discretion" that would take into account "the social conditions in our countries" in Europe.
On the pipeline problem, Rees reiterated that Great Britain will mount a legal challenge to the U.S. decision to extend to licensees in Europe the U.S. ban on shipping certain equipment to the Soviet Union for the new Siberian-Western European pipeline.
The British company involved is John Brown Ltd., which has a $200 million contract with the Soviets for six huge compressors for the pipeline, with the manufacture of the rotor blades based on technology licensed from General Electric Co. French, German and Italian companies have similar contracts.
If John Brown were to conform to the U.S. order, it would be subject to penalties for failing to fulfill its contract with the Russians. But if it goes ahead with the shipment, the United States could blacklist the company, which would mean that it no longer could carry on business here. Rees conceded that there are no provisions in the 1980 act for retaliation by the British.