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U.S., EC Seek Market-Access Breakthrough : Trade: U.S. has threatened sanctions against the bloc if no deal is reached by today. Specter of a transatlantic trading war looms.

April 20, 1993|From Reuters

WASHINGTON — Top U.S. and European Community officials met Monday in a final effort to resolve a market-access dispute that could determine whether war or peace shapes transatlantic trade under President Clinton.

Unless a deal materializes by today, the Clinton Administration--which says an EC rule favoring EC companies in public-sector contracts discriminates against U.S. companies--has threatened sanctions against the 12-nation bloc.

The EC, in turn, has its own counterstrikes at the ready.

No deal, apparently, had surfaced by Monday afternoon.

"We're continuing our discussions," said EC Trade Commissioner Sir Leon Brittan when asked if a meeting with U.S. Trade Representative Mickey Kantor had yielded any progress.

"We haven't finished them (the negotiations) yet. We will be carrying on (today)," he told reporters, suggesting that no breakthrough had yet been found.

Kantor has set today as a deadline for a deal, with both sides predicting a tough ride. "There is a long way to go," an EC official said.

For their part, U.S. trade officials--well aware of their combative new image since Clinton took office--want to fashion a compromise that suits all their needs but leaves Brittan with his pride intact.

Kantor says that all he seeks is a "level playing field" that will allow U.S. companies a fair shot at winning European business.

The rule now gives preference to EC companies bidding for telecommunications and heavy electronic contracts in the EC's largely publicly run utilities market.

But the Europeans in turn point to the Buy America Act, which they say discriminates against foreign companies trying to win lucrative U.S. government contracts at the federal, state and local levels.

Both sides have already agreed to a joint study that could thrash out the numbers--themselves a contentious matter--and come up with a yardstick to measure future such deals.

But a study alone will not head off the sanctions threat.

Due to kick in on Thursday, the sanctions would affect about $45 million worth of European goods and services by shutting EC companies out of the bidding for some U.S. government contracts.

EC officials refused to say what counter-steps they plan if Kantor and Brittan fail to clinch a deal.

"We are prepared under certain conditions" to meet the U.S. demands, said a European official on condition of anonymity. But without a deal, he said, "we will retaliate."

What is more, failure to strike a compromise in this one dispute would not only damage transatlantic trade ties but crimp multilateral efforts to rewrite the rules of commerce.

"Naturally we're very concerned," the EC official said.

"Sanctions never help the atmosphere, either bilaterally or multilaterally," he said. "Everyone is working as hard as they can, but the U.S. would have to assume that countermeasures might be likely."

A U.S. official said Kantor and Brittan--who scheduled a break from work with a social dinner at Kantor's house Monday evening--were expected to wrap up the talks this morning, when they were set to reveal the outcome.

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