Carla Hills Welcomes European Unity, But Sees `Catch'

US Trade Representative Carla Hills can fire off a list of reasons why the United States should welcome Europe's plans to weld itself into a single market after 1992. In a mega-Europe, for instance, US companies would no longer have to produce goods according to the technical requirements of each country. A Ford built for Portuguese highways could be sold in West Germany or Britain, the same way a Mercedes can be sold in Maine or Montana.

But there's a catch.

``All my optimism,'' says Ms. Hills, is based on the assumption that Europeans won't yank down internal barriers - only to build them up between themselves and the rest of the world.

Making sure that doesn't happen is a daunting task for the administration's top trade negotiator and is helping keep Europe at the center of the US trade concerns. This past week, Hills toured a string of European capitals, meeting with national officials and leaders of the 12-member Economic Community (EC) in Brussels. The trip focused on nudging along the current round of multilateral trade talks - the so-called Uruguay Round - in which both the US and the Europeans play key roles. However, Hills admits nettlesome US-European trade issues are still soaking up much of her time.

A perfect example is the EC's ``broadcast directive'' - which has ruffled feathers from the halls of Congress to Hollywood.

The directive, which hasn't been adopted yet, would limit the amount of US-produced television programming that could be beamed into European living rooms. Critics say it's the sort of ``exclusionary policy'' that would make 1992 a disaster for the US, which is the world's premier exporter of television programming.

``It's not a question of quality control, it's a question of nationality,'' says Hills, adding that she has a list of ``10 or 12'' 1992-related concerns to sort out with the Europeans.

The broadcast directive is especially offensive, says Hills, because it violates rules established under the General Agreement on Tariffs and Trade. The GATT is an international body that tries to clear away unfair trade barriers among its members.

Hills, known for her no-nonsense manner and ability to quickly grasp complex trade issues, says the Europeans have nothing to gain from locking the US out of their markets. Indeed, trans-Atlantic trade is crucial to both sides. Last year, the US exported $75 billion worth of goods to the EC - representing a quarter of all US exports; the EC nations exported $86 billion to the US.

US anxiety over plans for a single European market have subsided somewhat since earlier this year - when Robert Mosbacher, the then newly appointed commerce secretary, insisted that the US should have ``a seat at the table'' in the negotiations.

Hills says the US should have a ``consultative role'' in the 1992 process. ``I know that some may have felt that it was too much to have a place at the table or even a space in the room,'' she says, ``but surely you can be outside the door.''

The US already offers the Europeans a similar position, she adds. Whenever the US formulates a new national regulation, for example, the provision is made public and time allotted for comments from interested groups or individuals. Foreigners often take part in the process, especially when the regulation is likely to affect foreign trade.

Meanwhile, Hills is worried that such concerns are drawing too much attention away from the current round of global trade talks. The negotiations, which began in 1986 under the auspices of the GATT, are scheduled to end late next year and are supposed to liberalize trade in highly sensitive areas, including agriculture and services.

``We don't have the time to be negotiating a multitude of bilateral issues,'' says Hills, who plans to visit Asia and Australia later this year to discuss US proposals for the trade talks with leaders in those regions. So far, the US has tabled about 70 proposals - but progress on forming a final agreement has been slow.