After years of spotlighting Japanese trade barriers, Reagan administration trade officials now are turning more toward Western Europe, where they say protectionism is on the rise.
There are four major trade issues brewing with Europe, running the gamut from agriculture to telecommunications, and lawmakers, administration officials, farmers and business people are concerned that any of them could erupt into a trans-Atlantic trade war.
The concerns have been kept muted until now, however, to avoid stirring the political pot in Europe before last Thursday's vote in Spain on whether it should remain in NATO and Sunday's parliamentary election in France.
Nonetheless, there are increasing congressional and business pressures on U.S. trade negotiators to pay more attention to Europe -- but without easing efforts to open markets and end unfair trade tactics in Japan, the newly industrialized nations of the Pacific Rim and the heavily-in-debt Latin countries.
"We are more inclined to attack Japan on trade issues than Europe," acknowledged U.S. Trade Representative Clayton Yeutter at a luncheon last month with reporters and editors of The Washington Post.
Now, he added, "we're quite concerned" over some of the trade issues with the Europeans, which have become hard to manage because they involve individual nations as well as the European Community. "Often we are dealing with a nebulous political situation" which has become "increasingly challenging" with the addition this year of Spain and Portugal to the 10 nations that had made up the EC, Yeutter said.
Deputy U.S. Trade Representative Alan Woods was in Europe earlier this month expressing the Reagan administration's concerns over EC trade policies.
And Undersecretary of State Allen Wallis was sharply critical of European economic and trade policies in a London speech earlier this month. "Key sectors of Europe's markets have been closed to import competition in efforts to protect existing jobs, especially in agriculture, telecommunications, steel and automobiles," said Wallis.
The Reagan administration is trying to tear those barriers down. U.S. officials are holding talks with Western Europe's state-run postal and telegraph departments, using the threat of legislation to force them to open their closed markets to foreign technology. Other talks are scheduled this week with France, West Germany and Britain over their support of the Airbus, a passenger jet that competes for sales with privately produced U.S. planes. Steel remains a nagging problem, and the dispute of last summer, in which the U.S. cut off pasta imports after the EC imposed restrictions on citrus imports from the United States, still is simmering.
"Now the guns have turned. The turrets have turned on Europe," said Jack MacDonnel, a group vice president of the Electronic Industry Association, who last year took part in talks that unraveled barriers to U.S. sales in Japan's telecommunications market and this year is trying to do the same in Europe.
But the major issue that elevated Reagan administration concerns about Western Europe are new trade barriers that are being imposed on U.S. soybean and grain sales to Spain and Portugal as a result of their joining the Common Market.
"Europe is moving in a much more protectionist way, while Japan seems to becoming less protectionist," a senior administration trade official said.
That view has been underscored by a sharp, nearly $33 billion swing over the past four years in the trade balance between the United States and Western Europe. As recently as 1982, the United States had a $5.3 billion trade surplus with Europe, which last year turned into a $27.4 billion deficit.
Representatives of the European Community in Washington steadfastly deny that the Common Market is turning protectionist and play down the new anger that is developing here over its trade policies.
"It's puzzling," said Ella Krucoff, press representative in the EC delegation here. "It appears that certain congressmen and the administration are angry, but it doesn't show in the grass roots."
The anger certainly shows up in Washington, where farm interests reject EC arguments that the barriers are just temporary and instead see new Portuguese soybean quotas as the first step in an EC plan to end America's free access to the European market for that key commodity.
Crushed into oil, soybeans compete directly with locally produced olive oil, which is more expensive. Farm experts here said the EC is trying to use import restrictions to solve a major problem, which is getting rid of excess oil being produced by Italy, Spain and Portugal.
"They are trying to find a way to do what the community has wanted to do for a long time -- cut down on soybean imports that prevents the sale of olive oil," said John Baize, head of the American Soybean Association's Washington office.
Because of what they view as a European ax over their overseas sales, U.S. soybean farmers have led in opposing protectionism in cars, steel and textiles. They even went against U.S. grape growers and wine makers who wanted protection from European imports.
"We took a lot of grief for it, particularly on the wine bill," said Baize said.
In addition to restrictions on soybean sales, the EC insisted that 15 percent of Portugal's grain imports come from within the Common Market and that Spain limit grain imports by imposing "variable tariffs" instead of a fixed 20 percent duty. Sen. Pete Wilson (D-Calif.) said these could increase the price of U.S. corn in Spain by as much as 80 percent, and along with the restrictions on imports to Portugal, could cost American farmers at least $900 million.
These new restrictions were supposed to take effect March 1, but U.S. trade officials said there have been no signs yet of the new quotas or tariffs. EC officials said that any delay has nothing to do with Washington's demands, but rather are due to bureaucratic problems.
While the new policies may hurt U.S. farmers now, EC officials said the United States will benefit in the long run from increased sales of grain substitutes such as corn gluten feed and a lowering of Spain's and Portugal's high tariffs on manufactured goods.
Wilson, a leading critic of EC trade policies, doesn't buy those arguments: "This new grain policy is only a startling precursor to the other adverse consequences in store for U.S. farm exporters."
The Reagan administration has called the new tariffs and quotas illegal under the General Agreement on Tariffs and Trade (GATT), which regulates international trade, and has called for quick negotiations. The EC said it is willing to pay compensation under GATT rules, but Wilson for one thinks the amount offered will not be enough to cover the U.S. losses in farm sales.
"It is essential that the EC respond quickly to our concerns if we are to avoid a major trade dispute," said Undersecretary of State Wallis in his London speech.
For the present, all is peaceful in telecommunications talks, where a new EC policy of loosening barriers runs contrary to the practices of state-run post and telegraph (P&T) departments in many member nations. West Germany, for instance, favors opening its P&T system to imports, while France reportedly wants to continue restricting imports of telecommunications equipment.
Commerce Department specialists held talks with the West Germans earlier this month, and two days of discussions with representatives from Italy started yesterday. In addition, Airbus talks will be held in Geneva this week.
In a sense, both sets of talks are being held under the gun of possible U.S. trade retaliation.
France, West Germany and Britain requested consultations on the Airbus only after reports leaked out that President Reagan's trade strike force was considering bringing an unfair trade practice complaint against the program for illegal subsidies.
And the telecommunications talks are going on as Congress is considering legislation, originally aimed at Japan but equally applicable to Europe, that calls for retaliation against countries that restrict U.S. telecommunications sales.