Squeeze on the Soviets

Is trade a good weapon?

Powerful nations always use international trade as a political weapon, and America is no exception. Washington has placed restrictions on U.S. companies doing business with countries as ideologically different as Fidel Castro's Cuba, Ian Smith's Rhodesia and Idi Amin's Uganda --often with mixed results and doubtful gains. Last week the U.S. once more waved its trade cudgel, this time against the Soviet Union. And again the move sparked debate over whether it is wise and whether it will work.

In his Administration's first major response to Russia's sentencing of dissidents, Jimmy Carter canceled a $6.8 million sale of an advanced Sperry Rand computer to Tass, the official Soviet news agency. At the same time, he said that he was making all U.S. exports of oil technology to the Soviets subject to Government license. That was a clear warning that within the next few weeks he might ban the $144 million sale to Russia by Dresser Industries of a plant to produce advanced oil-drilling equipment.

Computer sales have long required Government approval. But the energy offensive is all new, and it brought a growl from Moscow, as well as a bitter response from American businessmen, disgusted at their new role as Ping Pong balls in East-West diplomacy. It also highlighted the longstanding sharp differences of opinion within the Administration over the wisdom of using trade to pressure or punish the Communists.

Reversing the trend of recent years, the hawks now have control. Led by National Security Adviser Zbigniew Brzezinski and a hard-line group from Congress, they convinced Carter that he had to respond to the Soviets forcefully and with more than words. Russia's threatening energy shortage, they argued, combined with its growing dependence on American technology, meant that a ban on certain exports could win political concessions.

Commerce Secretary Juanita Kreps has led the battle against Brzezinski, with support from both the State Department and the Treasury. This group argues that any trade shutoff will not soften Russia's stand on human rights and will hurt U.S. economic interests. American sales, it notes, make up only a small percentage of Soviet imports. Though U.S. goods are sometimes superior, Carter's move would hardly cripple the huge Soviet economy, and Moscow can always turn to other countries that are eager to do business. Said one top U.S. official in Washington: "It's a Greek tragedy. We are challenging the Russian manhood. Do we really think that the Russians are going to free dissidents over a computer that they could buy from the French?"

The Soviet reaction was immediate and tough. Izvestia warned that the U.S. policy would lead to "a road of confrontation," and Pravda thundered that "this is an old, rusty instrument of pressure and blackmail." Indeed, there is a growing suspicion that trade policy could backfire and produce a new clampdown on dissidents, since the Russians will want to show that they cannot be publicly bullied. This happened four years ago, when Congress effectively denied most-favored-nation tariff status to the Soviet Union because it would not permit freer emigration of minorities. All that led to a worsening of U.S.-Soviet relations and an immediate slowing of exit visas for Jews. Even some U.S. Jewish organizations are now coming to accept that trade threats cannot help Soviet minorities.

Hard-liners insist that Carter so far has only administered a mild wrist slap. Whether he will, or indeed can, swing a large trade club remains doubtful. Restrictions could be extended to all commercial exports and even to grain sales, but Russian harvests are good at the moment, and a ban would hurt U.S. farmers and cause a domestic political storm. The Administration is already playing its so-called "China card"--letting U.S. oil companies negotiate with Peking about offshore drilling rights and technical exchanges--but this is doing little more than irritating the Politburo.

Trade between the two nations is not substantial; largely because the Soviets are short of hard currency, America's non-farm exports to Russia are dropping, from $819 million in 1976 to an expected $400 million this year. Can trade ever be an effective weapon? Says Kreps: "The bottom line is that the cases in which you can use trade in this way are very few and far between.'' sb

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