EU Trade Commissioner Sir Leon Brittan has made no secret of his desire to counter the protectionism displayed during last fall's congressional debate over giving the president fast-track trade authority.

Last week, the European Commission, the executive branch of the EU, followed his lead and proposed that the United States and the EU enter rapidly into negotiations for a ''New Transatlantic Marketplace.'' The decision to open negotiations could be made as early as May, at the U.S.-EU summit between President Clinton and the current holder of the EU presidency, British Prime Minister Tony Blair.This is a bold move. The European Commission has thrown down the gauntlet not only to the U.S. administration and Congress, but also to EU member governments. The United States should welcome the commission proposal.

Sir Leon has argued that an ambitious trade agreement with the EU could rally U.S. legislators once again to the cause of trade liberalization.

The EU is a more balanced trading partner for the United States than are regional emerging economies, and arouses few of the fears over erosion of U.S. competitiveness, labor or environmental standards. Beyond that, the commission's proposal is sound.

The proposal has four parts: a political commitment to eliminate global tariffs on industrial goods by 2010; a trans-Atlantic free trade area in substantially all services; a series of U.S.-EU mutual recognition agreements to overcome regulatory trade barriers; and initiatives to liberalize investment, public procurement and intellectual property rights between the United States and the EU.

The proposal recognizes that regulatory and investment barriers are among the greatest obstacles to trans-Atlantic trade. With U.S.-EU trade in goods and services running at over $400 billion annually, the ability to increase its level by only a few percentage points could yield huge, immediate benefits.

The timing is also right. If the United States and the EU agree to negotiations this year, they will counter the tendency among Asian and other developing economies to slow down liberalization toward existing regional and global trade and investment.

There is another pressing issue that should sway U.S. officials and legislators. A majority of EU members will launch a single currency in January 1999. After that, U.S. competitiveness in a single European market will depend on U.S. products and services circulating on as level a playing field as possible.

Negotiating fair access will only become more difficult as the single currency takes root and EU foreign trade, as a percentage of its overall economic activity, declines to U.S. levels.

U.S. caution toward the proposal is hardly surprising. The administration must contend with its recent defeat over fast-track authority, which allows streamlined approval for trade agreements. Despite robust economic growth and low unemployment in the United States, congressional support for any new trade initiative will be lukewarm at best. Can the administration begin negotiating now and hope it, or its successor, secures fast-track authority before talks are completed?

U.S.-EU trade negotiations also could get mired at any time in trans-Atlantic disputes over U.S. sanctions against Cuba, Iran and Libya. There may also be different objectives: while Brussels may see the idea of closer trade ties as a political initiative, Congress will want to cut straight to the detail. Entering into the negotiations will once again expose some of the fundamental differences between Brussels and Washington over trade liberalization.

But EU governments also have reservations. They are about to undertake a series of ground-breaking EU initiatives, including negotiations with five central and east European countries in June on joining the EU, and the launch of the new euro currency.

Entering into major trade negotiations with the United States at the same time could be a distraction.

Certain governments also fear that the new trans-Atlantic negotiations will move into sensitive economic areas - such as agriculture and audio visual services - that they sought at great political cost to sidestep during the Uruguay Round.

The United States and the EU may be equals in economic terms, but the items that now remain on their trade agenda are among the most touchy.

Given EU ambivalence, the European Commission proposal needs a positive U.S. response to move forward. The benefits of a U.S.-EU trade pact are potentially enormous and the timing is right. The United States should take up the gauntlet.

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