East-West trade: who's dependent on whom?
The Soviet Union presents two major questions for United States and Western policy. One is military and relates to disarmament. The other is economic and relates to trade.
The first question is reasonably well resolved - not to everybody's satisfaction, to be sure, but at least Americans and Europeans are generally going down parallel tracks. With respect to the second question, on the other hand, American and European differences could scarcely be greater, despite the efforts made at the Versailles summit to paper them over. Nor are there very clear answers as to who is right and who is wrong.
The Soviet Union is facing an economic crisis of considerable and growing magnitude. Its agriculture is a mess and getting worse. In little more than a decade, it has moved from importing grain only after an exceptional year of bad harvests to importing it routinely, and furthermore to the tune of more than $3 billion annually from the US alone.
Repeated shortfalls on this scale cannot all be laid to the weather. The causes are more profound and have to do with technology and organization. Correcting them will require massive amounts of scarce capital, among other things.
The failures of Soviet industry are less spectacular, but Soviet factories also have their problems of efficiency, investment, and bureaucratization.
Add to this the economic strain represented by sundry foreign misadventures - Afghanistan, Cuba, Poland, among others. The Soviets brought Afghanistan on themselves in a burst of bad judgment. They were ensnared more gradually in Cuba and Poland. But in any event, these and other foreign commitments are expensive and, in the short run anyway, apparently unavoidable.
Now again, add to this the staggering cost of the Soviet military establishment. One wonders how the Soviets are going to manage to do everything that urgently needs to be done. The story of an American visitor to Moscow is illuminating. After a few days of trying to cope with the humdrum details of simply living, he asked in frustration, ''Why should we worry about these people blowing us up when they can't even serve lunch?'' The answer he got from an American resident was, ''The reason they can't serve lunch is that too many of them are working on how to blow us up.''
It can be argued that the worse the Soviet economy gets, the less able it will be to support the Soviet military establishment. It follows that East-West trade ought to be limited. On the other hand, it can equally well be argued that growing trade is good for everybody and that, unless Europeans and Americans are a collection of dunces, they will benefit from such trade as much as the Soviets. It follows that increased interdependence makes war or military confrontation less likely.
This whole question of dependence or interdependence is a tricky one. The Reagan administration has opposed European participation in building a natural gas pipeline from Siberia to Western Europe on the grounds that this will make the Europeans dependent on the Soviet Union for too large a proportion of their energy. The alternative, however, is to be dependent on the Arabs. Further, it could be argued that the pipeline will not make the Europeans any more dependent on Soviet gas than it will make the Soviets dependent on the hard currency that sales of that gas will earn.
All the while the Reagan administration is making these arguments (and denying American companies the export licenses to participate in the pipeline), it apparently sees no inconsistency in its huge sales of grain to the Soviets. Without earning hard currency through selling natural gas, or something, to the West, how are the Soviets going to pay for this American grain? It could be argued, of course, that these sales are making the Soviets dependent on the US for a large proportion of their food. When President Carter embargoed grain sales in response to the Soviet invasion of Afghanistan, the Soviets were able to buy the grain elsewhere. But if they are not strictly dependent on the US, they are dependent on the West.
Although US and European differences over trade with the Soviet Union tend to be stated in strategic or even ideological terms, it is hard to escape the conclusion that they are rooted in narrow economic and political self-interest. The Americans see nothing wrong in selling wheat. It is a big plus in the balance of payments, and it helps the administration with the farm vote. The Europeans see nothing wrong with financing the pipeline and selling the material and machinery to build it. This is very welcome business for the bankers, industrialists, and workers of France and the Federal Republic of Germany.
The Reagan administration, typically, is a shade more ideological in its approach. It has turned down requests for export licenses from hard-pressed industries, even foreign ones using American technology under license. And it has done so at the cost of offending the Republican leader of the House and the Republican chairman of the Senate Foriegn Relations Committee, not to mention the European allies.
However, in the present state of these non-policies in both Europe and the US , each tends to cancel the other so that each loses whatever effectiveness it might otherwise have had. One can make a reasonable argument for either, but not for both.