Mr. Gorbachev looks in new directions for needed trade
MUSCOVITES are getting two shows of bold chess tactics at once. At the Tchaikovsky concert hall they can watch young challenger Garri Kasparov outmaneuver weary incumbent champion, Anatoly Karpov. And, at the Wizard of Oz machine in the Kremlin they are beginning to catch glimpses of Mikhail Gorbachev and company moving pawns all over the place -- breaking with cautious stalemate tactics used by the old-guard Politburo players of the past decade.
The big story obviously is the near-break in the long impasse over nuclear arms reduction. But beyond that there are other far-reaching moves to watch. Many of them involve trade.
These moves dovetail neatly with what Mr. Gorbachev is almost certainly trying to do by seeking a compromise on missiles and warheads. He is believed to be interested in: (1) reducing future military replacement costs, thus allowing some later diversion of defense resources into retooling the USSR's many lagging industries; (2) creating a feeling of momentum that will help him dominate the important February party congress -- and replace more old-guard administrators throughout the party and the economi c management ranks.
This leads to the other chess moves related to trade:
Foreign Minister Eduard Shevardnadze's scheduled visit to Japan in January, just a few weeks before the Moscow party congress.
Ongoing, quiet bargaining with both Secretary of State George Shultz and some American Jewish leaders over Jewish emigration from the Soviet Union -- a precondition to any substantial increase in US-Soviet trade. That negotiation is running parallel to Israel's attempts to gain a resumption of formal Soviet-Israeli relations.
Moscow's efforts to repair relations with Peking, which, among other results, seems to be leading to additional increases in Chinese grain exports to the USSR. This could further lessen Moscow's need for North American grain. (It is ironic that China's retreat from a Stalin-Mao collective farming method is now making grain surpluses for Soviet import possible.)
In many ways Gorbachev's move toward Japan is his most interesting. It illustrates both the potential for a major economic deal, and the likelihood that past stonewalling tactics of the Kremlin have let the moment for most of these potential benefits slip away.
During the past decade, Kremlin leaders were more inclined to snub Japan's leaders than to take advantage of what seemed a logical marriage of Japanese technology and the largely untapped mineral and timber resources of eastern Siberia.
As already noted, Moscow has an almost desperate need for new machine tools in most of its basic industries. Japan is the world's leading supplier of such tools. Soviet planners have neither the advanced technology nor the capital (nor the surplus labor) needed to exploit the resources of far eastern Siberia. Japan has the technology and the capital, as well as the proximity.
But time has changed the equation. Economists who monitor Japanese strategy wonder whether the Japanese economy still needs the raw materials that Siberia has to offer. Once Japan Inc. consumed raw materials to make basic products for home use and for export. Now Japan's industrial base has shifted to one that adds high-tech sophistication to products that other low-labor-cost economies process from raw materials.
Even in the prefab housing area, where Japan is expanding for both domestic and export market purposes, other nations are supplying plywood and similar products, while Japan is doing the automation. Siberian timber would have to compete in this tough market against such suppliers as Alaska and the slumping Northwestern US lumber industry.
In the machine-tool area, it is possible that Tokyo will seek new deals with Soviet state industries. But deals may depend on what kind of credit-buying Moscow proposes. And how much credit the Soviets decide to seek may in turn depend on whether Mr. Gorbachev can divert investment capital from the military sector as a result of an arms reduction agreement with Washington.
Meanwhile, Kremlin strategists are likely to purchase machine tools from West Germany. Politically, they may wish to keep Bonn tied into trade with the East bloc. And, in some areas of mid- and high-tech, Russia's traders are also likely to seek American tools and technology on favorable terms. That is one of the forces moving Jewish-Soviet talks.
Clearly, the creditworthiness of Moscow and its Eastern allies, plays a role in the trade dealings of Japanese, German, and US bargainers. So does the tightness or looseness of Western definitions of strategic export items. The lowering of both credit and strategic barriers is tied to success in arms reduction efforts.
Such a bootstrap effort would cut the need for imports bought on credit. But prompt, widespread success is unlikely. This means that the pressure is on the new leadership to find outside suppliers. It also puts pressure on the lagging Soviet petroleum industry -- Moscow's big hard currency earner -- to bring in more cash in a declining world oil market.
Moscow and Washington seem to have overlapping interests in this area. The US has a slumping oil-service and exploration industry to meet Soviet needs. Japan continues drilling work with the Soviets on the Pacific Rim of Siberia. But expansion of investment from either source probably requires success at the summit. Many roads lead to and from the summit.
Earl W. Foell is editor in chief of The Christian Science Monitor.