To Russia with grain
American Midwest farmers no doubt are pleased by President Reagan's announcement that the United States will sell up to 23 million metric tons of grain to the Soviet Union during the current crop year. With bulging granaries and falling prices, farmers look to world markets to dispose of the surpluses. On the eve of an election it is not surprising to find Mr. Reagan sticking steadfastly to his pledge to farmers in the 1980 campaign.Skip to next paragraph
Subscribe Today to the Monitor
But the President will have to reckon with the further cynicism his move is likely to engender in Western Europe. The Russians were eligible for between 6 million and 8 million tons of US grain, so this is making available to them another 15 million tons. Meantime Mr. Reagan is penalizing the West European subsidiaries of American companies for exporting US-designed technology to the Russians for the Siberian natural gas pipeline.
To compound the inconsistency in European eyes, the US grain announcement did not even mention the latest repression in Poland - to which the American economic sanctions after all are supposed to be linked. Despite his avowed concern about the Polish people, the President is seen to be providing assurances for an expanded US grain trade even while the situation in Poland seems to be deteriorating. That may be good domestic politics, but it makes for very confusing foreign policy.
This is not to say that selling the Russians more grain does not make good economic sense. In fact there is a world glut in grain at the moment, and the Russians, without access to US stocks, could still make up their shortfall by buying from Canada, Argentina, France, and other countries (with whom they have already signed contracts). The latter would not embargo their grain, so American farmers - and the US economy - would simply be the losers.
It is also not to say that the West Europeans are entirely blameless. While the Reagan administration tends to be somewhat fanatic on the subject - with some voices believing the West should do nothing that helps the Soviet economy - the Europeans clearly have let East-West trade run on without much thought to its long-term direction and results. Generous credits at less than market rates have led to massive Western imports - and massive debt. Sensitive Western technology has made its way to Soviet defense plants. Even the question of energy dependency on the USSR tended to be downgraded until Washington made such a fuss.
These are not irrelevant issues, and it is time they were addressed. What the US grain announcement says is that there will continue to be inconsistency and muddle in Western trade policy until the allies work out new guidelines for East-West trade.