"There are no saints and sinners in international trade. We are all sinners in the eyes of the Lord," Sir Roy Denman, head of the delegation of the European Community in Washington, often says.
So when the Reagan administration pressed the EC with threats and with retaliation because of what it considered Europe's unfair trade practices involving products such as pasta and canned fruit, the Common Market fought back with its own form of retaliation -- in the so-called "pasta war."
The Europeans also have challenged the American assertion that U.S. markets are relatively open, branding Americans as among the sinners. When Secretary of State George P. Shultz and U.S. Trade Representative Clayton Yeutter visited Brussels a week ago to meet with EC officials, they received a list of 23 examples of practices that Europeans view as barriers to European sales in the United States,
"World opinion could be led to believe that the United States was the only country to respect the rules of the game of world trade," said EC Trade Commissioner Willy de Clercq in releasing the list. "The notion of fair trade must be applied in the same way on both sides of the Atlantic."
Yeutter said he welcomed the list and acknowledged that the United States is not without sin in the trade arena. He expressed willingness to hold consultations in areas where the EC believes the United States trades unfairly.
That exchange between the world's largest trading partners and close political allies underscores what trade specialists consider a dangerous trend for the health of the global economy. More nations are charging protectionism, even as they build up their own barriers to imports or subsidize exports.
"The present trend is toward protectionism, subsidy and managed trade. The prospects for world trade are deteriorating, not improving," said Felipe Jaramillo, chairman of last month's meeting of the contracting parties of the General Agreement on Tariffs and Trade, the international organization that regulates world trade.
GATT figures show that world trade has slowed dramatically this year, growing by less than 3 percent, compared with a 9 percent growth rate in 1984. The annual report of the 90-nation, Geneva-based organization cited the intensification of protectionist pressures in a number of countries -- particularly in the United States, where Congress is demanding action from the Reagan administration to cut a trade deficit that is expected to reach $150 billion this year -- as a major cause of the slowdown.
This increases the importance of a new round of global trade talks, due to start next year, that are aimed at improving and expanding the authority of GATT. But it also means that the United States will not be the only nation demanding that trade barriers come down. Less-developed and newly industrialized countries also have their complaints about U.S. barriers and already have made clear their intention to press for ending them at the new GATT talks.
"The existing international trade structure condones too many trade barriers," Yeutter said.
The United States has become the whipping boy of the world for its protection of such products as steel, motorcycles, textiles, sugar, foreign shipping and rubber shoes. Studies by Georgetown University economist Gary Hufbauer show that almost one-quarter of goods flowing into the United States face trade barriers that cost consumers as much as $50 billion a year.
Even so, those barriers are far less onerous than ones erected by other countries. The United States generally is conceeded to have the freest markets of any major industrialized nation, and only Singapore and the crown colony of Hong Kong boast of a more open trade policy.
Nonetheless, countries such as Brazil assail what they call American protectionism, which Brazil says hurts its sales of steel, shoes, sugar, ethanol and textiles.
But Brazil sees no inconsistency between its cries for open markets in the United States and the passage of a law in Brazil that blocks imports of U.S. personal computers and software.
Brazil's exports to the United States are expected to be about $8.3 billion this year, approximately the same as in 1984 and 50 percent higher than in 1983. Brazil had a $5.6 billion trade surplus with the United States in 1984, meaning that it exported that much more to the United States than it imported from the United States, but Brazil still fights U.S. pressure for it to buy more foreign goods or to limit its subsidies. Brazil argues that it needs a healthy export surplus to pay off its massive, $100 billion foreign debt.
American trade policies also face attacks in South Korea, another nation that maintains a large trade surplus with the United States while blocking U.S. sales. Korean students, for example, occupied an American Chamber of Commerce office in Seoul last month to protest pressure on its government from President Reagan to open its markets to more U.S. products.
Yet few countries have fared as well in trade under Reagan policies as South Korea, which carries a $3.1 billion trade surplus with the United States for the first nine months of this year, almost $300 million greater than the same period last year.
The president saved major South Korean exports to the United States this year when he vetoed the textile bill and refused to follow the recommendation of the International Trade Commission to limit shoe imports. While quotas were placed on Korean steel shipments, the first Korean cars will be sold in the United States next year.
So what does Seoul complain about? It says that it has been unfairly targeted by the Reagan administration for its trade practices, while the Asian giant, Japan, is let off the hook. Specifically, South Korea was upset by ITC findings that it dumps photo albums on the U.S. market at below the cost of making them, injuring U.S. companies, and by investigations initiatied by Reagan into its barriers to American sales of insurance and its failure to protect intellectual property such as patents and copyrights.
South Korea offers little copyright protection, and reports that the United States may pressure the government there to observe international copyright laws have sent South Korean students racing to buy cheap pirated textbooks while they can. The Korea Herald quoted one medical student as saying that she bought 36 pirated versions of foreign medical texts for $375 -- one third of the cost of the licensed books.
For all its complaints over what it sees as American protectionism, South Korea maintains a protected economy, with tariffs so high that most foreign goods are prohibitively expensive. Its protection for the domestic tobacco industry is more direct: it jails South Koreans caught smoking foreign cigarettes on the street.
Taiwan, another major Asian exporter to the United States, is known for its piracy, especially of U.S. high-technology products such as Apple computers. It also maintains tariff walls, with duties as high as 75 percent, that keep competitive American products from winning a share of Taiwan's market.
U.S. officials and lawmakers are becoming increasingly irritated at countries that complain of American protectionism while maintaining trade barriers of their own.
During a visit to Bangkok this summer with a group from the House Ways and Means Committee, for example, Rep. Beryl F. Anthony Jr. (D-Ark.) lit into his Thai hosts because of their continual complaints of American protectionism.
Anthony, criticizing Thailand for placing import bans and high taxes on sales of such farm commodities as soybeans, wheat and cotton that are produced in his district, pointed out that American workers and farmers also need to keep their jobs.
So the jousting continues. At the request of Congress, Yeutter's office published a 214-page report in October listing all barriers -- legal and illegal -- to American overseas sales. It quickly became a best seller for Washington trade lawyers, who used it as a catalogue of potential clients.
The United States listed 15 pages of European barriers against U.S. products. But the largest section, 25 pages, was devoted to Japanese trade barriers.
Everyone complains about gaining access to the market in Japan, the second-largest economy in the non-Communist world, and the complaints all have a similar ring to them.
China told Japan that it will not allow a one-way trade relationship to continue and warned Tokyo that it had better buy more products from China if it wants to continue selling in the Chinese market. An EC delegation visited Tokyo this fall to seek greater access to Japan, while European companies have increased their unfair-trade complaints against imports from Japan.
In a report to its National Assembly last month, the South Korean Ministry of Trade and Industry complained that Japan is erecting barriers against its products despite a $3 billion trade surplus. Many of the products on South Korea's list are the same products that American companies say they can't sell because of Japanese barriers, including medical supplies, cosmetics, telephone equipment and cigarettes.
Japan, however, vigorously asserts that its markets are open. Foreign Minister Shintaro Abe, then minister of international trade and industry, made that statement in a formal speech to GATT trade ministers in November 1982.
The statement was greeted with open laughter.