Reagan eases up on pipeline issue as Europe growls
Faced with angry European allies on one hand and with Polish citizens being killed by martial-law forces on the other, the Reagan administration is walking a precariously narrow path as it seeks to resolve the Soviet pipeline issue.
United States officials insist that they are not backing down from their declared sanctions against firms supplying parts to build the natural gas pipeline. But they are taking a more strictly constructed view of such sanctions to placate somewhat Western Europeans and US manufacturers.
Rather than a broad ban on the export of US equipment and technology to foreign companies taking part in the pipeline's construction, the administration has decided to limit that ban to goods and services directly related to oil and gas production, Treasury Secretary Donald Regan said Wednesday.
Two French companies began shipping such equipment to the Soviet Union last week. Two more European firms - John Brown Engineering of Great Britain and Nuovo Pignone of Italy - were to begin doing so this week. A third, AEG-Kanis of West Germany, likely will follow shortly.
''We're not going to back away from sanctions,'' Commerce Secretary Malcolm Baldrige said Wednesday. ''But we have to make sure those sanctions are directed at what we think the essential problem is - the Polish problem.''
The suggestion that US sanctions might be milder was described as ''rather encouraging to our side'' by a West German Embassy official here. This source also noted that US Trade Ambassador William E. Brock's meetings with European officials at a trade seminar this week in England ''might bring some progress in the dispute.''
A broader and farther-reaching problem facing the administration is a rift in the Atlantic Alliance that is seen by many observers as the most serious since its founding.
British Trade Minister Peter Rees said Wednesday he has told the John Brown it ''can disregard the President's regulation.''
''We just don't happen to think that the regulations which are aimed principally at European countries are the right way to set about it when the Americans are going to go on exporting grain to the Russians,'' he said. Britons face an unemployment rate near 14 percent, Europeans say, and France and Italy are suffering high joblessness as well.
For their part, US officials still are seeking a way to amicably restrict trade, technology transfer, and economic credits from the allies to the Soviets. US Secretary of State George Shultz will meet with NATO foreign ministers later this month in Ottawa, and this is expected to be a prime topic.
Meanwhile, new evidence is being reported indicating that the withholding of Western assistance would not prevent the Soviet Union from meeting its gas delivery schedule later this decade.
Those opposing the Reagan sanctions have been saying so for months, but the Washington Post reported Sept. 1 that a new classified Central Intelligence Agency (CIA) report concludes that the Soviet Union could use existing pipelines , its own equipment, and adjustments to the Soviet economy to foil the US attempt at hampering gas deliveries.
This fresh CIA finding is being challenged by others within the administration who insist that sanctions will harm the Soviet Union. But in order to repair damage to the Atlantic Alliance, those sanctions are being narrowed nonetheless.