Courtesy Reuters

Politics and Soviet-American Trade: The Three Questions

With great fanfare, representatives of the United States and the Soviet Union signed a trade agreement in Moscow in October 1972. By this point, trade between the two countries, starting from a very low level ("trivial," Aleksei Kosygin called it in 1971), was already beginning a rapid rise. It continued to grow over the next few years. The total trade turnover between the two countries was almost four times greater in 1972-74 than in 1969-71. Much higher levels yet and still more intense cooperation seemed shortly in store. Then, in January 1975, the Soviet Union announced that it would not agree to put the trade agreement into formal effect. It said that the conditions attached by the U. S. Congress to the development of trade - specifically, the Jackson-Vanik Amendment on emigration and the Stevenson Amendment on export credits - violated the terms of the 1972 agreement, and so effectively voided it.

Since the Soviet renunciation, trade has stagnated, though superficially such does not appear to be the case. The total volume of U. S. exports to the Soviet Union has generally continued to rise - a peak of $1,195 million in 1973 was followed by a drop to $607 million in 1974, and then by further increases, to $1,833 million in 1975 and $2,300 million in 1976.1

But these figures are misleading in a number of ways. First, they are distorted by very large agricultural purchases - over 60 percent in both 1975 and 1976 - the result of an uncharacteristic second bad harvest within a five-year plan. Putting aside the wildly erratic agricultural element, it becomes clear that Soviet-American trade is actually in stagnation. The Commerce Department predicts a decline in 1977. Moreover, many of the transactions officially attributed to 1975 or 1976 (or to be included in 1977) are actually the overhang of deals negotiated three or four years ago, and, although no reliable figures are available, the number of current transactions is widely thought to be in sharp decline. The Russians have diverted a good deal of their purchases to Western Europe and Japan (though not

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