Trade Offensive

In Moscow last week, Communist offers to trade with the West took on the appearance of a major offensive. To a 33-man delegation of blue-chip British businessmen, the Soviet Ministry of Foreign Trade made an offer that resounded round the world: $1.1 billion worth of orders for British manufactures to be paid for in cash and delivered within three years.

Included in the Russian shopping list were 110 small ships (cargo vessels, tankers and whalers), 110 power stations, 150 steam boilers, two floating docks, $84 million worth of machine tools, railroad equipment. Many of the items were strategic, i.e., useful to a Soviet war economy.

Impossible Gesture. The Englishman most exhilarated was Harry L. Dowsett, chairman of an East Anglian shipbuilding firm, who has been canvassing Moscow for weeks. Dowsett called his $17 million contract (the only one signed and sealed) the "biggest single order for merchant shipping ever placed," but he carefully neglected to mention that it was a 30% smaller version of an order that has been gathering dust in the British Board of Trade (and in the Kremlin) since he first accepted it a year ago.

The Soviet Union's billion-dollar trade offer, if it works out, would involve a tripling of Russia's non-Communist trade. Few Britons believe that this is possible: even a fraction of that amount would involve a drastic change in the world's trading relationship. Yet, undeniably, the vast Soviet offer had raised all Europe's hopes. It made certain that East-West trade will be one of the vital issues of 1954.

Scramble for Business. Western Europe's current economic problem is not supply, but demand. Surpluses are piling up. Western salesmen are scrambling for export markets, and, not finding them in the U.S., are looking to Moscow--and the 800 million potential customers penned behind the Iron Curtain. "Our 1954 motto," cooed the chairman of the Soviet Chamber of Commerce in a foreign broadcast last week, "is 'Welcome' . . . to foreign traders." The traders who march on Moscow find bureaucrats with whom they must do business hard and evasive bargainers. After three months' canvassing, the spokesman for twelve Lancashire textile-machinery firms admitted that "the going is sort of rough," and went home emptyhanded. Others have had better luck.

Recently the Soviet Union has signed a score of trading treaties with non-Communist nations. Among them:

P: A $140 million agreement with Belgium (ships, cranes and lead, for Russian timber, gasoline and passenger cars).

P: A contract to buy 20 trawlers and five refrigerator ships from the Swedes.

P: An agreement with Italy to buy cotton and exchange movies.

P: A $34,000,000 credit arrangement to buy French meat and machinery.

P: An $8.4 million purchase of New Zealand butter.

These pacts impress more by their number than their size. The fact is that the vast Communist bloc, with one-third of the world's population, decreased its proportion of world imports from 1.81% in 1952 to 1.66% in 1953. Partly, this is because the Reds, seeking self-sufficiency. impose their own version of the U.S. Battle Act.* More important, the Communists are too poor to pay for what they want to buy.

The Waiting. It is one of the facts of international economics that Soviet purchases invariably run ahead of Soviet deliveries. Sweden recently gave up shipping iron ore to satellite Czechoslovakia because Prague would not pay up. France found that Soviet buyers exhausted their $34,000,000 credit for 1953-54 before the first six months were up; a Greek government spokesman called the new Greek-Soviet agreements "very disappointing" because the Soviet Union "in most cases, made no deliveries at all."

Face to face with similar experiences, and itself determined not to bolster Soviet armed power. Britain's Tory Board of Trade, which must license all British exports to the Communists, is treating the new Russian offers with inquisitive skepticism. "We welcome any increase in trade with Russia, provided it is in the nonstrategic field." is the official attitude. "We'll just have to wait and see . . ."

* One of the charges that condemned Czech Communist Boss Rudolf Slansky and his cohorts (TIME, Dec. 8, 1952) was that they exported "militarily valuable" TV tubes to Britain, thereby "endangering Czechoslovakia's defense potential."

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