SPIKING THE TRADE GUNS

IN "THE GUNS OF AUGUST," Barbara Tuchman tells how in 1914 a minor political incident in an small Balkans city mushroomed step by step until a month or so later the giant nations of Europe were at war. At no point, she makes quite clear, was the outcome inevitable. But no one in power would take the risk of halting the escalation.

In a strikingly similar recent series of events on the trade front, the prospect of a trade war between the United States and the European Community seemed to grow inexorably. This time, however, the determination to avoid all- out conflict was great and, to the world's good fortune, an 11th-hour settlement was reached.The disagreement erupted last March when Spain raised its import duties

from 20 percent to more than 100 percent as a condition of its joining the European Community, known also as the Common Market. This, the United States estimated, cost U.S. farmers $400 million in exports of grain to Spain. And, as it is permitted to do under the General Agreement on Tariffs and Trade, it demanded compensation.

As recently as a week ago, the Europeans were insisting that the most they could assure the United States was 1.1 million metric tons a year of grain sales to Spain. The United States responded that if the EC could do no better, it was prepared to up by 200 percent import duties on white wine, brandy, gin, cheese, olives, endives, carrots and canned ham imported from Europe.

The EC said that if the United States did so it would retaliate further by raising import duties on U.S. corn gluten feed and rice. No one ventured what would be next.

The United States said it chose the luxury items it did because together their value represented roughly that of the lost grain exports to Spain. But there is suspicion that they were chosen also to evoke as loud a hue and cry as possible. Brie, one of the items targeted, for instance, is produced by many small farmers over a wide area of France.

The agreement reached - it still must receive formal approval of the 12 EC member countries - calls for Spain to import 2.3 million metric tons of corn and sorghum a year, of which the United States would get its traditional 65 percent share. In addition, however, the United States would receive lower tariffs on a list of still undisclosed industrial products. This would account for one-third of its total compensation.

That the settlement was an equitable one is attested to by the fact that no one was entirely happy with the outcome. U.S. grain producers had objections. So did European agriculturalists. In any event, there will be a full-scale review several years down the road.

The achievement of a settlement in what could have been a serious trade war gives substance to President Reagan's promise, in his State of the Union address, that this country wants to be a trade partner but not a "trade patsy." Almost as soon as the grain matter was settled, the administration opened an attack on another front. It stepped up efforts to get European governments to stop subsidizing Airbus Industrie's production and sales.

Spiking the guns of January demonstrates that trade conflict need be no more inevitable than armed conflict, that men of good will, notably Willy de Clercq for the EC and Clayton Yeutter for the United States, can achieve understanding if they are determined to do so and work long enough and hard enough.

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