With new US-Soviet grain deal sown, nonfarm exporters are waiting in line
This month American farmers got a break: a new five-year grain deal with the Soviet Union. But those in the nonagricultural sector are still waiting to get theirs.Skip to next paragraph
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With embargoes, sanctions, and tight export controls interrupting US-Soviet trade over the last five years, the Soviets have come to view the United States as an unreliable supplier, industry and government officials say. They have taken their business elsewhere, especially to Europe and Japan.
It is ''a question of government policy,'' says Hertha Heiss, head of the USSR division at the Department of Commerce. Or, in the words of Harald Malmgren , former deputy trade representative: ''Do you or don't you do business with . . . a sometimes enemy?''
US policy toward East-West trade is still unclear to businessmen, but recent developments hint that the US may be getting down to answering such a fundamental question.
The grain deal was a start. Last week Commerce Secretary Malcolm Baldrige and Secretary of State George Shultz requested the White House to relax controls on oil and gas pipeline equipment to the Soviet Union.
And this fall the Export Administration Act is expected to undergo revisions as Congress takes up two bills that have already passed House and Senate panels. The act has been cited as too restrictive of US exports - especially computer-controlled equipment. The bills would guarantee contract sanctity, prohibiting export controls that would break ongoing US-Soviet contracts. They would also limit the president's ability to impose economic embargoes for foreign policy purposes.
The ups and downs in economic policy have been costly to US manufacturers. While nonagricultural exports to the Soviet Union rose last year by $59 million, exports in this category would have dropped had it not been for $268 million in exports of phosphoric acid, a chemical used in fertilizers.
Opinion is divided in the business community as to how much current developments will improve US-Soviet trade.
Kempton Jenkins, vice-president for government affairs of the Armco steel company, is heartened by recent developments. ''I think we are close'' to an improved export situation, he says, talking about the two bills. And the grain agreement ''is a deliberate (Soviet) signal to encourage us to move ahead in the business field,'' comments this former deputy assistant secretary of commerce for East-West trade. Armco lost ''a deal worth several million dollars because of (Afghanistan sanctions),'' Jenkins says. Since then it has had ''further business, but very small.''
But ''I don't think just a grain deal is going to turn on the light switch and make it all change,'' argues Frank Briber Jr., a vice-president of the Allis-Chalmers Corporation, a multinational manufacturer of machinery and consumer goods. Allis-Chalmers supplied the Soviets with two $50 million iron-ore processing plants in the late '70s. But now it only gets small orders for parts. ''If we could have either order we got in the '70s right now, it would be tremendously significant,'' he adds.
Lev Zak, president of FZ Inc., a Boston-based trading company that is just starting to arrange the export of US consumer goods and services to the Soviet Union, says US policy is too wishy-washy. ''The Commerce Department doesn't promote trade and it doesn't prohibit it. This is a time when the US government should come up with a positive policy.'' His suggestion is to have the Soviets approach the Commerce Department first - to get orders cleared - before entering lengthy negotiations with US companies that often end up bogged down by US export controls.
While lack of a concrete export policy has left US business people ''confused and frustrated,'' says Mrs. Heiss, they haven't turned their backs on Soviet trade, either.
Both Armco and Allis-Chalmers still maintain Moscow offices - although no US employees are permanently stationed there now. ''There's a big market out there, '' comments Jenkins. It's worth ''keeping ties going.''
''Quite frankly, we maintain very close contact with the federal trade organizations in the Soviet Union,'' says Richard Kuba, international marketing director of the National Machine Tool Builders Association. Machine tool exports to the USSR trickled last year: $1.3 million, compared with the detente peak of
Even if a concrete policy is established, Mrs. Heiss warns, it would still be a bumpy road for US exporters. ''A lot of exports of machinery and equipment are related to specific Soviet projects.'' Right now, for instance, the Soviets are concentrating on agricultural machinery and food processing and delivery. But a few years from now the Soviets could be putting emphasis on some other industry.