Washington, Bonn in step on post-Afghan sales to USSR
Dusseldorf, West Germany
Despite some disappointments for Washington, West Germany and the United States are going ahead fairly smoothly with coordination of post-Afghanistan ground rules for industrial sales to the Soviet Union.
They and the other Western industrial states are approaching agreement, diplomatic sources report, on the new Cocom (Allied coordinating Committee for Strategic Export Control) definitions of what should be considered strategic equipment and barred from export to the Soviet Union. the thrniest issue of computers -- on which the United States submitted proposals last spring -- still remains to be settled in the Cocom councils, but it is not a point of contention between the US and West Germany.
Washington would, of course, have preferred it if Klockner had not, in September, signed the first major West German-Soviet contract after the Soviet invasion of Afghanistan last December. Washington would have preferred it if West Germany had suspended its Hermes government guarantees of private loans to the Soviet Union; had agreed to submit any deals over $100 million to Cocom review regardless of their technological content; and had agreed to limit maturities of future contracts to five years.
Washington would probably also prefer it if Mannesmann did not sign the biggest East-West contract ever -- an $11 billion to $13 billion gas-to-pipeline deal that is currently under negotiation.
All of these preferences are chronic rather than acute, however. They reflect only a general wish not to see "business as usual" after the Soviet agression. (And in the Mannesmann case they are diluted by American ambivalence over whether it might not be best after all to help develop Soviet energy, especially energy that would be exported to Western Europe.)
Notably, the US is not complaining to West Germany -- as it is to France -- about any high technology going to the Soviet Union or about any West German companies snapping up deals that American companies dropped under America's post-Afghanistan embargo on high-technology sales to Moscow.
The $300 million Klockner contract to build a Siberian aluminum smelting plant with a 500,000-ton annual capacity involves no advanced technology.Klockner has been pointing out to inquiring Americans that the deal is only half the size of the original Alcoa-Klockner also points out that the process-control technology will now come from the Soviets themselves rather than from the West, and will be much less sophisticated. Klockner was able to stay competitive -- despite the lack of West German government subsidized credits for Soviet trade -- by gaining access to such French government credits through the company's French subsidiary.
The US has been more annoyed by the $300 million French Creusot-Loire contract at the end of August to build a Soviet plant to produce an annual 480, 000 tons of specialty hardened steel from 1985 on. This was the first major deal that broke the West's post-Afghanistan caution in singing new contracts with the Soviet Union. This was also a particular blow to the Americans, because the original contract was one that Armco Inc. withdrew from in compliance with the American embargo.
The French have denied American charges that they violated the spirit of allied understandings after the Soviet invasion. The Creusot-Loire consortium says it is supplying only the heavy equipment and machinery that Nippon Steel was originally going to provide -- not the know-how that Armco was going to provide.
West German companies have been scrupulous in following their government's guidelines established when the US government first declared its embargo nine months ago. At that time the Bonn government specified that West German companies would not "substitute" for American companies that pulled out of Soviet deals.
An American official also notes that "the German government has gone out of its way to see that anything on the Cocom list doesn't go to the Soviet Union."
Furthermore, the West German government is generally backing the American effort to change the pre-Afghan Cocom practice of widespread exceptions to a no-exception policy on Cocom embargoes.
Bonn also specified from the beginning, however, that West German companies would fulfill existing obligations to the Soviet Union. And the West German government did go ahead with the signing (at a low, ambassadorial level) of a long-planned but new framework agreement on economic and industrial cooperation during Chancellor Helmut Schmidt's visit to Moscow last June.
West Germany trades more with the Soviet Union than does any other Western country. In the first half of 1980. West German-Soviet trade rose some 20 percent (aided by price rises in oil and other raw-materials imports from the Soviet Union), to $4 billion. France increased its Soviet trade by more than 40 percent in the same period, however, and is now the runner-up, with a projected trade.