The Deals Are Coming

ONE of the diplomatic trophies that Richard Nixon had hoped to bring home from Moscow last spring was an agreement establishing the basis for vastly increased U.S.-Soviet trade, which the President firmly believes is a sine qua non for improved relations between the superpowers. By the time the Kremlin talks had ended, however, both sides were still hung up on too many points of contention to issue more than a general statement of optimism. Last week that optimism turned into something far more solid than words. The U.S. and the Soviet Union signed a comprehensive agreement setting up the terms for an exchange of commerce that could well reach the $1 billion level annually by the end of the decade. The only thing that keeps the signing from appearing quite the historic occasion that it unquestionably was is the possibility of a new hangup, this time in the U.S. Congress.

As part of the deal, the Soviets agreed to settle their World War II Lend-Lease debts to the U.S. for $722 million, to be paid in annual installments through the year 2001. The Administration claimed that the terms, which amount to only about 70 on the dollar for Moscow's $11.1 billion Lend-Lease debt, compared "satisfactorily" with Britain's settlement under the same program. Perhaps--if the forfeiture of a quarter century's interest payments is not counted.

Other key points of the agreement:

> Mutual treatment of each other's goods as imports from "most-favored-nations," meaning that both countries must impose the lowest possible tariffs on the other's merchandise. The effect of such tariff treatment on Russian vodka in the U.S., for example, would be to cut about $1 per quart from its retail price, making Moscow's excellent Stolichnaya brand more competitive with American products.

> Extension of commercial credit generally made available by each nation to its other trading partners. This provision would entitle Soviet trading monopolies to seek financing for their U.S. purchases from the Government-run U.S. Export-Import Bank. U.S. businessmen who make deals in Moscow can apply for similar services at the Soviet Foreign Trade Bank.

> Construction of an office-apartment-hotel complex in each capital for use by permanent and visiting trade groups. Residents of the Soviet trade center in Washington, of course, will be government officials. The Russians will allow some private U.S. firms to set up branch offices in the U.S. complex in Moscow, but capitalism's physical presence in the Soviet Union will remain a very lonely outpost. Before a company's officials can even be granted office space, they must have already established their firm as an "active trading partner" with the Soviet Union, presumably by having engineered deals that were to Moscow's liking on business visits. The few that qualify can then set up a Moscow staff of only five Americans and import a single company car.

The President has the authority to execute on his own all parts of the trade agreement except one. Most-favored-nation status can be granted only by Congress, and therein hangs a potentially serious threat. No fewer than 76 Senators have gone on record as opposing MFN as long as Soviet officials continue trying to halt the swelling exodus of their Jewish citizens by charging exorbitant exit fees. The Soviets have privately recognized Nixon's lack of full power over the matter, and may be willing to loosen up on some restrictions in order to ensure clearance of the final hurdle blocking their much-desired access to American technology. Indeed, on the day of the signing, for no apparent purpose other than to signal such a willingness, Moscow authorities granted special exit without any education tax to 59 Jewish families who normally would have had to ante up several hundred thousand dollars in tuition repayments to gain it. Secretary of State William Rogers said merely that the U.S. will continue to use "quiet diplomacy" in attempting to ease the plight of Russian Jews.

Beyond the congressional shadow, trade between the U.S. and Russia looks as if it will become a brisk, though hardly thriving business. Total purchases of both nations from each other, now running at a minuscule $200 million annually, are expected to triple over the next three years, with the U.S. coming out considerably ahead on the balance of payments. Commerce Secretary Peter G. Peterson, who signed the agreement with Soviet Trade Minister Nikolai S. Patolichev, said that the Russians are expected shortly to order $60 million worth of earth-moving equipment for excavation of their huge new Kama River truck factory. At week's end, as if to signify that such business deals were already becoming routine, the Soviets signed a $68 million order for pipelaying equipment with Caterpillar Tractor Co.

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