II.   LEADING TRADE PROSPECTS
      FOR U.S. BUSINESS

As noted earlier, the overall market of the European Union is a
differentiated one, with each Member State market having
characteristics that merit individual attention.  Thus, while a pan-
European business strategy is a must, tactics should be adjusted for
each country.  Readers should, therefore, consult the Country
Commercial Guides of the U.S. embassies to the twelve Member States of
the EU for specific "Best Prospect" information.

Overall, American companies generally find their best prospects in the
EU at the upper-end of the technology scale.  U.S. goods are well-
regarded and demand is driven much more by quality and performance
than by price.  In broad terms, the EU offers particularly good
opportunities for American suppliers of goods and services in the
telecommunications*, health and medical**, and environmental
sectors***.  The market for American seafood has been declining
moderately since 1991, although fresh dogfish and hake have shown
dramatic upturns in 1994.  While this decline may be, in part, attributable
to European economic conditions, increased domestic demand for some
traditionally strong export species, e.g., scallops and monkfish, is
equally accountable.

With 348 million consumers, the EU is the world's largest importer of
agricultural products, accounting for roughly 20 percent of total world
imports.  The EU is the second largest market for U.S. agricultural
exports.  Consistent with the global trend, the market for consumer food
products is one of the most promising growth areas for U.S. agricultural
exports to the EU.  For 1993, U.S. exports of consumer products to the EU
are expected to reach a record $1.7 billion.  While the prospects for
different products vary from country to country within the EU, tree
nuts, pet food, beverages, fruit juices, and nursery products are among
the products doing well in almost all countries.  Global branding and
further integration of European markets is producing a more
homogenous food and drink market in Europe, but important national
differences in consumption trends remain.  Nevertheless, certain trends
are evident throughout the EU -- demand for greater convenience, more
openness to non-traditional foods, and a growing interest in health foods
and organics.  Except for a few bright spots -- notably rice and tallow --
the market for bulk and intermediate agricultural products is either
stagnant or declining.

There are sizeable procurement opportunities with the Commission, other
EU institutions, and pan-European organizations in their development
programs, especially in central and eastern Europe and the states of the
former Soviet Union, and in the integration programs to benefit the
poorer regions of the European Union itself.  American companies with
European legal status may be able to tap into:the Structural Fund ($27
billion per year for the next 6 years for infrastructure projects); the
Cohesion Fund ($2.5 billion per year for the next 7 years); the PHARE
program ($1.2 billion for 1994 and probably beyond); the TACIS program
($581 million per year for technical assistance); and the TransEuropean
Networks ($23 billion per year over the next 15 years for transport,
telecom, and energy projects).

*  The privatization of the European telephone entities (PTTs), scheduled
to be completed by 1998, provides opportunities for sophisticated
telecommunications systems suppliers.  Indeed, recent trans-Atlantic
and intra-EU joint-ventures reflect appreciation of the significance of
those opportunities.  The EU represents 25% of the world telecom
equipment market and its imports grew on average 9.2% per annum
between 1982 and 1992.  As a result of the Uruguay Round, the EU tariff
on telecom equipment will drop by 40% to 2.22%, which should help U.S.
firms increase their market shares.  In 1993, American exports to the
Union is this sector totalled $1.7 billion.

** Rising costs in the EU health care field, have already led to greater
use of generics as well as deductibles and the pressure will continue,
offering good openings for American suppliers whose traditional R&D
strengths are believed to give them a leg up on the European
competition.  Over the past decade, the medical device sector in the EU
grew an average of 7% per year.  While that pace will slow somewhat,
ageing and increased health consciousness will keep growth above 6% for
1994-1995.

***With the percentage of GDP spent on the environment expected to
grow 4.9% yearly throughout the current decade, proposals for more
stringent standards in, inter alia, fuel properties and industrial air
pollution, and an ever-heightened public awareness, the environmental
sector offers significant potential for American companies.