The Multinational Monitor


N E W S   M O N I T O R

Corporatists vs. Conservative

The U.S. - U.S.S.R. Trade Debate

Just about the only area where Reagan Administration policy collides with the interests of major corporations is in trade with the Soviet bloc. Hardliners in the Defense, Commerce, and State Departments have cooperated to form an array of governmental task forces, liaison offices, intraagency committees, departmental steering committees, panels, industry and university advisory groups, lecture services and even a "Tiger Team" of unpaid Naval Reserve Officers to monitor such trade, and to block technology transfers to the Soviet Union that are deemed harmful to national security.

An overview of this blizzard of activity, centered in the Department of Defense (DoD), is contained in a littlenoticed report to Congress by Defense Secretary Caspar Weinberger, entitled "The Technology Transfer Control Program." Along with graphs showing where the U.S. is superior, equal to, or inferior to the Soviet Union in basic technology areas and deployed military systems, the report describes a new DoD Directive, 2040.2. This rule defines "defense-related technology" as a valuable limited national security resource, to be "husbanded and invested in pursuit of national security objectives." Key policy guidelines outline how DoD should treat sales or projected sales to the Soviets, along with procedures to use in reviewing export license request cases.

In the report and in interviews, Weinberger gives the clear impression that it is his personal crusade to impose greater restrictions and enforcement against shipments thought to pose national security risks. His report declares, "Through the Office of Industry and Government Liaison, in 1984, DoD will also seek generally to increase the involvement of industry, the scientific community and academia in export control, hut especially in the difficult problem of technical information controls. More concrete examples with which we can tell the story of the threat of our technological edge, and its impact on our national security are expected to emerge from an ongoing study on the relationships between U.S. and Soviet technology development, transfer and insertion, scheduled for completion in 1984."

A substantial number of leading U.S. business executives seem unconvinced of the wisdom behind the Reagan government's contraction of trade with the Soviets. In an unusual display of defiance last month, a group of top U.S. executives and a high level Soviet trade delegation met at the New York Hilton under the auspices of the U.S.-U.S.S.R. Trade and Economic Council. The Council is a private organization of 220 U.S. corporations and 125 Soviet foreign trade firms dedicated to the principle that trade should be separated from politics.

The Council co-chairman, Armco's William Verity Jr., noted at a news conference that American companies were being denied at least $10 billion a year in sales to the Soviet Union due to U.S. government restrictions. In most instances, he said, the Russians went ahead and purchased the technology from other countries. He gave the example of a $353 million Armco deal to build an electrical steel mill, the export licenses for which were cancelled after the Russian invasion of Afghanistan. A French company got the business instead.

Present at the two-day conference were David Rockefeller, formerly with the Chase Manhattan Bank, Pepsico's Donald Kendall, Dresser Industries' chairman John Murphy, and long-time Soviet Ambassador to the U.S., Anatoly Dobrynin. The audience of corporate officials were cool to claims by two Reagan Administration spokesmen that export controls were needed for national security and foreign policy reasons. As world traders, Council members understand the difficulty of preventing diversions of technology through third countries, and how easily, with a few exceptions, the Russians can find willing vendors in other industrialized countries.

Misreading the conference sentiments, however, Robie Palmer, Deputy Assistant Secretary of State for European Affairs was critical of the Soviet Union. "It was very poor judgment," Verity later remarked.

Reagan is promoting the expanded version of export controls because he knows, especially in an election year, that his right-wing constituency demands it and that such a policy serves to highlight his view of the Soviets as relentless specialists in obtaining U.S. technology for military strength.

Table of Contents