New Zealand's diplomatic break with USSR didn't stop trade

The rift in New Zealand's diplomatic relations with the Soviet Union has not left New Zealand farmers high and dry. In fact, during the four years in which the two countries have kept their ambassadors home, New Zealand's exports to the USSR have jumped more than 250 percent.

The split was bridged Feb. 20 with an announcement here that the two nations will exchange ambassadors for the first time since January 1980. Since then each has maintained an embassy in the other's capital, but only under the control of a charge d'affaires.

The break came just after the Soviet invasion of Afghanistan but had nothing to do with that. Rather, it was caused by an internal scandal: The then-Soviet ambassador had been caught red-handed by New Zealand intelligence officers passing money to the Socialist Unity Party, a small but vociferous Marxist political party that supports the Moscow line.

The ambassador, Vsevolod Sofinsky, who denied the charge, was given 48 hours to leave the country. The Soviet government retaliated by asking the New Zealand ambassador in Moscow, who was nearing the end of his term, to leave forthwith. The Soviets also refused to accept the credentials of his designated successor.

Successive New Zealand governments have always divorced trade questions from purely political considerations, since this South Pacific nation of 3.2 million people needs to trade to survive.

After the Afghanistan invasion, for example, New Zealand rejected US-led calls for trade sanctions against the USSR.

The Wellington government did suspended certain exchanges, including scheduled trade talks between Soviet and New Zealand officials. The government also successfully pressured sporting organizations to boycott the Moscow Olympics.

But the retaliation stopped at that.

''We do not believe in cutting off our nose to spite our face,'' a New Zealand official said. ''We said we would continue to trade in traditional items , though we would have rejected any Russian request to fill a gap caused by an allied country's trade embargo.''

Given New Zealand's dependence on exports, it was no surprise that diplomatic tensions did nothing to harm trade development.

In 1979, its exports to the Soviet Union had totaled $85 million and were limited to wool, mutton, and butter. But by last year, exports had jumped up to Russians buying about $36 million worth of lamb for the first time.

The Soviet Union is now New Zealand's sixth largest trading partner, after Australia, the United States, Japan, Britain, and Iran, whose meat purchases last year put it into the top bracket.

In the past, the Soviets were unpredictable buyers, coming into the market after hard winters and wanting to pay only rock-bottom prices. New Zealand officials now sense a more regular pattern emerging as the Russians strive to improve living standards, though the change in political leadership in Moscow is not seen as having any effect on Russian food-buying policies.

''They still strike a hard bargain,'' an official said, ''but they seem prepared to pay a premium for quality and assured delivery.''

The biggest problem for New Zealand in the trade is that the Soviets will not enter into long-term agreements, each sale being negotiated as they require more imports.

A four-year supply agreement for butter was signed in 1980, but officials here say it is not a binding contract. ''We can expect they will buy some butter every year - but it's pretty loose,'' one said.