Hills Focuses on Trade Reforms

CARLA HILLS, the United States trade representative, has become a woman with a mission: to convince Congress, the nation, and the world of the need for global trade reform. Now that the trade waters with Japan have temporarily been smoothed, Mrs. Hills is focusing on the last six months of the four-year negotiations to liberalize the General Agreement on Tariffs and Trade (GATT). That treaty that covers a significant portion of world trade. It is a rare Hills speech that does not mention the trade talks now taking place in Geneva.

In an interview, Hills describes the GATT negotiations as ``complicated but vital to not only America's future but the rest of the trading world.''

``Ambassador Hills is the out-front spokesman,'' says Sam Gilston, editor of the Washington Tariff & Trade Letter, a newsletter.

For Hills, sometimes called the ``Sphinx of Trade'' because of her lawyerly coolness, there are political risks and rewards. ``If she is successful, she can turn out to be like Joan of Arc and if she fails she could also turn out to be like Joan of Arc,'' says Mr. Gilston.

Hills will certainly have her hands full trying to make the talks succeed. The negotiations are difficult and complicated. The 97 nations that make up the GATT must all agree by consensus on the issues. There are 15 separate negotiating groups tackling different trade areas. Included in the current round of talks - known as the Uruguay round - are proposals to reform agricultural policies and to bring textiles under the multinational system. The negotiations are expected to intensify this fall as the December deadline nears.

The most difficult sector to date has been the agricultural negotiations. Clayton Yeutter, former US trade representative and now agriculture secretary, was in Geneva two weeks ago. According to an Agriculture Department official, there are some ``encouraging signs'' of progress. The Europeans have agreed to negotiate in the four areas proposed by the US: export subsidies, market access, internal price mechanisms, and sanitary standards.

Hills calls agriculture ``the key to the round.'' But she will not comment on whether failure in agriculture will destroy the process. ``I am projecting that rational minds can see precisely what I see, that the year has come to bring down these protections,'' she says.

The US goal is to phase out export subsidies and the control of internal price support mechanisms. ``I guess we are furthest apart from the European Community which has a tradition of providing export subsidies to its farmers instead of letting them compete on the world market,'' says Hills.

The US proposal is to end all barriers to market access and internal-price supports over a 10-year period while eliminating export subsidies over five years. Agriculture officials say they believe the Europeans are becoming more comfortable with a US proposal to replace market barriers with tariffs.

The US itself has its share of farm subsidies. Only last week, the House Agriculture Committee voted to spend $53 billion on subsidies over the next five fiscal years. Under the farm program, the government pays farmers a subsidy if prices fall short of a preset amount. The proposed target price for corn would be $2.75 a bushel, for wheat, $4 a bushel.

In the textile negotiations, Mrs. Hills's job has been made more difficult by the introduction of US textile legislation last month. ``Introduction of the textile bill was not at all helpful,'' says Hills. The proposed legislation, sponsored by 54 senators and 230 House members, would cap annual growth in textile imports at 1 percent and begin an import-licensing program.

President Reagan vetoed similar bills in the past. But this year the introduction of the bill comes at ticklish time. In Geneva two weeks ago the administration proposed a framework for bringing textiles into the GATT. According to trade sources, the textile talks are currently stalled.

Although there are no major Japanese trade issues facing Hills, her office is still negotiating with Japan over the final report on structural impediments to trade. The interim report was issued last month.

Hills would like the Japanese to allow entrepreneurs to sue for damages if they are harmed by collusion among Japanese firms. She would also like the Japanese to eliminate the law that regulates entry into the retail market in Japan. In the interim report, the Japanese agreed to reduce the delay for approval to open new retailing stores from six years to 12 months.