Mystery shrouds Clinton trade policy

PRESIDENT Bill Clinton is not going to be a soft touch on trade; that much we know from actions already taken and threatened against European exporters. But whether he is tending towards a course more protectionist than George Bush remains unclear.

Both the measures announced in the past week - the imposition of steep import duties on steel products and the planned barring of European companies from competing for some federal purchasing contracts - would almost certainly have happened under President Bush. Indeed, the steel decision was set in train by the last administration and legally had to be followed through.

Taken alone, therefore, these actions need not be taken as a disavowal of assertions made by Mr Clinton during the election campaign that he believes in free trade. Rather, they may signal only that Mr Clinton, like Mr Bush, is to use aggressive tactics to defend an overall philosophy that is still anti-protectionist.

That is the view, for instance, of Robert Matsui, a Democrat Representative from California and a trade expert. 'It's probably going to be a very tough policy from a rhetorical point of view, which may make for tough negotiations, but I think Clinton is ultimately a free-trader,' he said.

From the European point of view, however, the omens do not seem good. Much is being read into the fact that the decision on procurement - hitting European telecommunications and power-generation industries - was harsher than some administration officials had been advising and was explicitly approved by the newly formed National Economic Council in the White House.

'Already, there is a danger of things getting out of control,' the EC spokesman in Washington, Peter Doyle, said yesterday. From his vantage point, the procurement sanctions were 'very much a policy statement' by Mr Clinton. 'It's going to be very difficult to keep relations on an even keel.'

Mr Clinton may partly have trapped himself into taking at least a somewhat protectionist stance by underlining his pledge to put domestic concerns before international ones. The steel industry has its gift from Washington, in the form of the duties. Others will expect the same. The car industry is already lobbying for duties on foreign imports.

'I think there is a danger that as Clinton concentrates on domestic policy, so some of that commitment to open markets and some of the reasonableness of the campaign may not be there any more,' Mark Nelson, a Europe analyst at the Carnegie Foundation, said. 'There are a lot of reasons to worry about transatlantic relations right now.'

It remains early days, and the truth may be that on most of these issues, Mr Clinton and his colleagues just do not have any policies yet. Much may be clarified next week, when Sir Leon Brittan, the EC external trade commissioner, is due in Washington to meet Mickey Kantor, the US trade representative. It promises to be a meeting that will either clear the air or poison it further.