US-Europe talks aimed at avoiding steel trade 'war'

That flash and rumble in the distance may be an approaching trade battle. A flock of high-level officials -- Special Trade Representative Bill Brock, Commerce Secretary Malcolm Baldrige, Agriculture Secretary John Block, and Secretary of State Alexander M. Haig Jr. -- are descending on Brussels at the end of this week to talk trade with the European Common Market. In general, the discussions are aimed at patching up frayed Atlantic trade relations. Specifically, Topic A will be steel: how to handle what the US industry calls an inflow of unfairly cheap, subsidized metal from Europe.

On one side is the US steel industry, waiting for the moment, polishing its guns. Frustrated by rusty government trade barriers, angered by the bold tactics of foreign steelmakers, the industry has agreed to delay filing antidumping and antisubsidy complaints, pending the outcome of the talks. On the other side are European steel companies, working in inadequate domestic markets, and exporting cheaply to keep employment and volume up.

Caught in between: the Reagan administration, with high free-trade ideals but a belief the other guy should play fair. That means foreign exporters should not sell below cost or be the recipients of generous government subsidies that allow them to beat their competition.

According to Mr. Brock's office, the discussions will be informal, part of an ongoing series and not necessarily expected to produce anything concrete. A Commerce Department official in the international trade division says, ''We have been told Mr. Brock will seek compliance with US trade laws, and explain the consequences of violating the trigger price mechanism.'' The so-called TPM calls for automatically investigating foreign steel sold below a set, ''trigger'' price.

The TPM has proved a leaky trade barrier. Fed up by what they see as government bungling, some say this weekend's trade talks are the first shot of something less genteel.

''It is a war,'' says a staff member of the Congressional Steel Caucus. ''That's the way we view it. The guys on the Hill are just fed up. There are too many steelmakers out of work.''

And the American steel industry is angry. US Steel and other corporations are threatening to file legal attacks on steel importers from at least nine countries. Under Section 301 of the Trade Act, private parties are allowed to file such complaints with the special trade representative. If the complaints are found valid, the government must act, through jawboning or more punitive measures, such as tariffs.

Penelope Hartland-Thunberg, a senior fellow at the Center for Strategic and International Studies, comments: ''From what I understand, yes, they have been selling at below the trigger price through some shenanigans. The Europeans admit it. The evidence, apparently, is good. That's one reason the administration is taking the hard line.