Trade between the United States and the Soviet Union is unlikely ever to reach mammoth proportions, regardless of political considerations or even economic systems. It is equally unlikely that either nation would ever consider such trade economically indispensable or even significantly beneficial. Nevertheless, the tendency in some quarters in the United States to dismiss both the prospects and the political importance of such trade should be less readily accepted.

It is inconceivable, in fact, that the United States could not, if both parties were willing, gradually achieve a substantial exchange of goods with a massive, modern nation, now largely urbanized and industrialized but needing far more equipment and technology to fulfill its potential; a market of some 250 million people with much the same needs as Western Europe but insufficient productive capacity to meet all of those needs; a nation with eight cities of over a million population, with an increasing level of education and living standards that now finds television and other appliances in millions of homes, and with increasingly restive consumers (whose comparatively low wages are somewhat offset by free or subsidized medical care, housing, education and other services); a potential trading partner which has demonstrated its economic and technological maturity in space, medicine, aviation, biology, electric power and nearly every basic industry.

The Soviet attempt last year to bid on six giant new turbines for the Grand Coulee Dam-a bid prevented largely for political reasons by a startled U.S. Government-is but one demonstration of the folly of our continually asserting that trade between us will always be miniscule because the U.S.S.R. produces nothing worthwhile for us to buy. On other occasions the Soviets have talked of building in this country metallurgical plants with equipment superior to our own, of licensing new medical inventions, of selling us new kinds of industrial tools.

Soviet-American trade today is miniscule. Except for the special sales of American wheat authorized by President Kennedy in 1963 and implemented under President Johnson in 1964, it has been miniscule since the early days of the cold war. Indeed, it has never been large; but the barriers have always been-and remain today-more political than economic. No doubt some American businessmen will always refuse to trade with a communist country on grounds it is immoral. No doubt some critics of communism will always be convinced that, without our trade, the Soviet economic system will ultimately and inevitably collapse. No doubt there remain in Moscow disciples of Marx and Lenin who fear that such trade will only postpone the demise of American capitalism and pollute the purity of Soviet communism. But these are minority voices at best. The largest single obstacle to the growth of U.S.-U.S.S.R. trade to a level of hundreds of millions of dollars is the obsolete, arbitrary network of discriminatory tariff, credit and export restrictions imposed by the U.S. Government. These restrictions were imposed largely when the cold war was both hotter and more pervasive than it is today, then elaborated in the days when Stalinism and a more unified communist bloc in Europe appeared to make aggression a clear and present danger; they are justified today on the grounds that the Soviet Union is a supplier and supporter of our enemies in Viet Nam.

We refuse most-favored-nation tariff treatment to Soviet goods, thus forcing American importers to pay the excessive Hawley-Smoot tariffs of 1930 and inviting like retaliation on American goods. (This gap between what the Soviets must pay and what their West European competitors must pay to bring goods into the United States will grow even larger as the new Kennedy Round agreement is carried out.)

We ban seven kinds of Soviet fur in favor of U. S. domestic interests which ask protection in the name of anti-communism.

We ban the export to the Soviet Union of not only military and genuinely strategic goods but also goods which are now freely available for purchase in both Eastern and Western Europe.

We prohibit the Export-Import Bank from financing any sales to the Soviets other than agricultural goods.

We prohibit the sale on credit of surplus agricultural commodities under Public Law 480.

We will not permit, under the Johnson Act, private banks and businessmen to extend long-term credits similar to those granted by our West European competitors.

We impose costly restrictions and delays on Soviet vessels seeking clearance to enter our ports.

Some of these barriers could not be eliminated entirely and some relate to long-standing questions involving Tsarist World War I debts and Lend-Lease World War II debts. But all would be susceptible to early reduction if the necessary will prevailed on both sides.

Other obstacles to Soviet-American trade must not be underestimated, including those inherent in doing business with a communist state. Trading with a state is not easy for private businessmen in any case, and Soviet bureaucracy can be even slower and more disorganized or over-organized than our own. The problems of delivery, distribution, servicing, procurement of spare parts and foreign exchange are all immense. Differences in currency, in concepts of competition, in measurements, standards, traditions, trademark and patent protection, in the use of arbitration for disputes, and even in language cannot be swiftly swept aside. Until the Soviets earn more dollars by sales to us, they may often require American exporters to take payment either in Soviet goods for resale by professional "switch dealers" or in credit balances which the Soviets have in a third country (or they may simply stipulate American components in goods which they purchase from countries whose currencies they hold). Some American businessmen may be deterred by the inconveniences of Moscow hotel service, by the need for unusual advance planning for each business trip, by the inefficiencies of the Soviet postal and telephone systems, by the lack of easy access to buyers or sellers and to plant managers or technicians, and by the need to be patient and precise on every possible point in negotiations.

Nor are the political objections confined to one side. Communist doctrine makes a virtue of economic self-sufficiency. In the midst of a business negotiation, the Soviet representatives have been known to stiffen their attitudes and their terms very quickly when the cold war suddenly turned for the worse. The war in Viet Nam has at least dampened the Soviet desire to trade. Clearly, the Kremlin has its own share of "hawks," who ask whether the Soviet Union should be trading with the United States while it is bombing their North Vietnamese allies; who regard their current sale to us of strategic metals as "trading with the enemy;" who believe President Johnson's "bridge-building" is a devious method, to quote one Soviet official, of American "ideological penetration;" and who want no Soviet resources or currency reserves diverted to Western imports, and especially to Western consumer goods, when they could be used instead for a greater Soviet military build-up.

Nevertheless, the U.S.S.R. has not been deterred by the Vietnamese war from selling to this country items which we tell our allies have too great a military potential to be exported to the Soviets-items such as the extremely rare, light, durable metal known as titanium, which we use, as the Soviets well know, almost exclusively for our outer space vehicles and for the supersonic aircraft we fly in Viet Nam. In the course of a long talk last year with Soviet Minister of Foreign Trade Patolichev and other Soviet officials I became convinced that the Soviets today desire, despite Viet Nam, to buy American goods as well as to sell their goods to us. This desire springs not from any pressing economic need-for they can obtain all the goods and markets they really need elsewhere-but from their belief that trade can help keep doors open and normalize relations.

President Johnson and his Administration, recognizing the value of such exchanges from the American point of view, moved some time ago to remove several hundred items from the export control list and to increase Export- Import Bank financing of sales to Eastern Europe; and the President condemned extremist-sponsored consumer boycotts against East European goods. His proposed East-West Trade Bill of 1966 would have authorized a wholesale liberalization along the lines recommended by a blue-ribbon advisory committee of businessmen. That bill, however, was bottled up in the Congress without even serious consideration and was not resubmitted by the President last year.

Also in 1967 the Senate amended the Export-Import Bank Extension Bill to prohibit loans and guarantees by the Bank to any nation furnishing supplies to Hanoi and to prohibit in particular loans to the Italian credit agency financing the new Fiat automobile plant in the Ukraine. Debate on the amendment related primarily to its effect on the war in Viet Nam and showed that the war is in fact the major obstacle to a liberalization of policy. It is easy to talk about expanding trade with Russia after the war or about trading now with the East European countries in order to lessen their dependence on Moscow. But the really tough question is whether the United States Government should encourage increased two-way trade (in nonstrategic goods) with the Soviet Union so long as that nation is shipping weapons and other supplies to our enemies in Viet Nam.

That is a question fraught with emotion and uncertainties. Former Secretary of Agriculture Benson has compared such trade to financing Hitler, and suggests that by allegedly promoting communism by such trade the President may be open to impeachment. One Democratic Senator calls it trafficking with the enemy and another describes it as giving aid and comfort to those killing our boys overseas. A Republican Senator compares it to Northern speculators purchasing Southern cotton during the Civil War; and a Republican Congressman says such trade places dollars ahead of lives.

Nevertheless, the question must be faced up to, and my answer is that this trade is desirable for three reasons:

First, such trade can actually advance our national interest in Viet Nam as well as in the world at large. The war in Viet Nam is a time-bomb ticking away in a nuclear world. In this period of tension, the United States and the Soviet Union must deal with each other outside the channels of cold-war man?uvring and hot-war threats and deterrents. We should make every effort to increase understanding and minimize misunderstandings and demonstrate that there is hope for peaceful coexistence. We must show that the United States is not out to eradicate communism from the face of the earth and that methods other than aggression can make progress. Any other counsel tends to escalate the risks and prolong the length of the Vietnamese war. No one advocates that we put dollars ahead of lives; and existing Commerce Department controls on the export of strategic goods will prevent any businessman who wished to from doing so. But neither in a nuclear world can we put all our hope in armaments.

This is not "trading with the enemy." The Soviet Union, for all its contrary interests and adverse actions, is not a declared enemy in Viet Nam nor do we want it to become one. Trade can neither solve nor prevent the conflicts of interest and ideology that divide us there and elsewhere; but by increasing contacts and providing experience in working together, it can help create a climate in which peace may perhaps be more readily achieved.

Bilateral trade strengthens the economies of both countries and any Soviet diversion of foreign exchange to the purchase of nonstrategic goods from us can only be to our advantage. On the other hand, restrictions on East-West trade only draw the communists closer together in increased mutual dependence.

Second, restrictions on Soviet-American trade in nonstrategic materials cannot affect the flow of Soviet arms to Viet Nam. Obviously our trade is not of sufficient importance to the Soviets to affect their determination to supply North Viet Nam; equally obvious is the fact that they can buy all the goods they want from our friends in Western Europe and from Japan.

Although East-West trade is still small, it has grown in recent years even more rapidly than Western trade as a whole. American participation in this growth has not equalled that of even some of the smallest European countries. In fact, the latest figures available indicate that, despite some increase, we are trading with the Soviet Union less than we did a generation ago; our sales of hides and skins, foods and fibers, and a variety of other items comprise considerably less than 1 percent of our total exports, while we are buying even less-mostly high-grade chromite, platinum-group metals, furs, aluminum scrap, diamonds and window glass. Meanwhile, our friends and allies-especially Britain, France, West Germany, Italy, Finland and Japan-compensating for recent sluggishness in their domestic economies, have been expanding their sales to the Soviet Union by means of long-term credits for machinery, equipment, rubber, transportation items and fabrics, purchasing in return even larger amounts of Soviet fuels, tools and raw materials for their industry, as well as some items for their consumers.

In short, our restrictions on nonstrategic trade do not deny anything to the Soviets. They do deny our businessmen an equal chance to sell in that vast market, to make the most of our technological applications and to reap the rewards in jobs, profits and an improvement in our balance of payments. They deny American farmers and producers who are disappointed with the results of the Kennedy Round in terms of West European markets a fair opportunity to develop markets in Eastern Europe. And they deny American consumers an equal chance to buy low-cost Soviet watches or bicycles or other goods now produced in the Soviet Union more efficiently than by other suppliers. It takes time for our businessmen to develop a new market, particularly one where we have no well-established trade pattern. But we have virtually abandoned the Russian and East European market to the West Europeans and the Japanese; and the longer we stay out the more established Soviet acceptance of other patterns and standards will become. In the name of anti-communism we are not hurting the communist nations but ourselves.

Trade is not aid. If we sell the Soviets more than we buy, our balance of payments benefits. Even if we grant them long-term credits, sooner or later they will have to come up with the gold or the dollars. As stated by the U.S. Council of the International Chamber of Commerce: "Trade by definition does not take place unless benefits accrue to both parties. If one nation refuses to participate, in so far as the second party can find another trading partner, the loss is entirely sustained by the country refusing to do business."

An example of this kind of shortsightedness was the Senate's 1967 amendment to the Export-Import Bank Bill prohibiting the Bank's participation in the sale of American equipment to the Italian Fiat Motor Company for use in its new Soviet plant. Credit was to be granted not to the Soviet Union but to the quasi-official Italian credit agency. Some $50 million worth of American machine tools would have gone into that plant and opened the door for still more American exports. The Departments of Defense, Commerce and State, supported by General Wheeler of the Joint Chiefs, all declared that this loan and plant, as well as the resulting increased Soviet appetite for cars, could not help but result in a diversion of Soviet resources into consumer goods instead of military. The U.S.S.R. is to expend several hundred million dollars of its own on this project and between twenty and forty thousand workers will be employed. There is no possibility, in view of our export control checks, that the smaller, lighter cars this plant will produce in the 1970s could be sensibly used in Viet Nam or any other battle; and it is very clear that both Eastern and Western Europe can supply any of this equipment that we fail to supply.

Nevertheless, in what Secretary Trowbridge called "a fruitless exercise in self-denial without corresponding advantages to the United States," the Senate adopted an amendment which could only antagonize the Soviets, irritate the Italians, deny profits and jobs to our own industry and lose what little influence that sale might have brought us in Moscow-all without interfering in the slightest with the building of the plant in question, with the flow of Soviet supplies to Viet Nam, with the progress of the Soviet economy or with the length of the Vietnamese war. The House having already this year adopted an even broader amendment barring all Export- Import Bank transactions relating to any communist country, it is apparent that Western Europe will supply these nonstrategic items to the Soviets and its businessmen and labor will reap the gains, while our balance of payments-as well as our reputation for common sense-will suffer. Perhaps the Senators who voted for the amendment intended it as a symbolic slap at the Soviet Union and felt better as a result. Perhaps the torrent of emotions which compared the proposed transaction to our building "a munitions plant in Moscow" or creating an "RFC for communist countries" had too strong a demagogic appeal to be resisted. But every Senator should have known that the amendment was futile and foolish.

A third reason for trade with the Soviet Union in nonstrategic goods has to do with our long-term interest in moderating the conflict with the Russians. It is often charged that the Soviets use trade as an instrument of policy in the struggle between our two systems. They do and we should. World peace, as President Kennedy said, does not require that we love our neighbors; and world trade likewise does not require that we love our trading partners. While both the ideological differences and the national conflicts of interest between the United States and the U.S.S.R. are too real to be ignored, present U.S. restrictions on trade with the Soviet Union are a handicap in the ideological struggle and run contrary to our foreign policy interests.

The United States should not emerge from the struggle in Viet Nam to find itself wholly out of favor in Europe and wholly out of touch with Moscow. The gradual reconciliation of Eastern and Western Europe seems destined to proceed, whether we like it or not-and most of us do. Eastern and Western Europe are developing a great network of economic relations, trade routes, pipelines, power grids, shared technology and coöperative production agreements. We are already somewhat isolated from this process by the Viet Nam war and an appearance of uncompromising cold-war militancy. We should not add to our isolation by inflexibility on East-West trade.

It is in our interest to see the Soviets invest more of their resources in consumer goods and less in their traditional sectors of heavy industry, space and defense. Already Soviet leaders show an increased if cautious recognition of consumer demand, of the complaints about shortages, the desire for cars and better homes and clothes. The economic reforms launched by the Kremlin more than two years ago do not go as far as those in several other East European states in experimenting, decentralizing and paying more attention to market factors. But more responsibility and initiative are now permitted at lower levels; bonuses, profit incentives and other forms of capitalism are beginning to appear; and the balances between production and demand and between prices and costs are becoming more realistic.

Centralized planning is still responsible for unnecessary rigidities and delays. But once their State Planning Committee has decided that the nation's long-range priorities and hard-currency reserves permit the importation of certain goods, their Foreign Trade Ministry and its operating subsidiaries will seek the lowest possible price in the most arduously negotiated contract.

If our businessmen are to make the most of the vast Soviet market, if we are to influence the evolution of Soviet external political attitudes and internal economic reforms and are to resist the ambition common to Kosygin and de Gaulle to exclude our influence from a reunited Europe, then the Congress should remove our outmoded, discriminatory barriers against nonstrategic trade with the Soviet Union; authorize most-favored-nation status for all of Eastern Europe; and remove these latest restrictions imposed upon the Export-Import Bank. The Administration should remove from export controls those commodities which no longer are strategic in the sense that they are unavailable elsewhere; and the Export-Import Bank should grant short-term commercial credits for industrial exports to the Soviet Union without requiring of the Kremlin anything more than is required of other nations to prove their credit-worthiness.

The traffic on bridges to the East, as Senator Dirksen has said, should move both ways. The credits and concessions should be reciprocal and the expansion should be bilateral. Chinese opposition as well as the Vietnamese war may inhibit Russia from accepting our offers for the moment. But our efforts should outlast the Vietnamese war and outgrow the cold war. Trade is a force for friendship, understanding and peace. We should use it, not thwart it.

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