Reagan riddle: Should US feed a hungry bear?

President Reagan, fresh from his controversial decision to sell advanced military aircraft to Saudi Arabia, now moves to another bristly foreign policy issue -- whether or not to lift the Soviet grain embargo.

The President is reported to be weighing conflicting advice from within his Cabinet and is on the verge of decision.

Meanwhile, Mr. Reagan will emerge into public view on the night of April 28, when he will address a joint session of Congress in an effort to boost his economic program.

The President's tax and budget policies are under challenge particularly in the House, and Reagan -- often called the "great communicator" by his staff --and national support for his program.

His speech will mark the President's first full-scale public appearance since March 30, when he was wounded during an assassination attempt.

On the subject of the Soviet grain embargo, current speculation -- and at this writing it is little more than that -- is that Reagan may authorize limited shipments of grain to Moscow.

His motives, if he does so, would appear to be twofold:

* To help American farmers, who -- the President says -- bore a lonely and expensive burden when President Carter cut off grain shipments to Moscow following the Soviet invasion of Afghanistan.

* To encourage the Soviets, through a move to bolster their troubled economy, not to intervene in Poland.

White House officials confirm that top-level meetings on the subject have been under way. But the President's deputy press secretary says no final decision has been made.

Those favoring an end to the embargo, including Secretary of Agriculture John Block, claim that the cutoff hurt American farmers more than it did the Soviets, partly because Moscow obtained some replacement wheat, corn, soybeans, and flour from other nations --

Those who want the embargo to continue claim that the pledge of Soviet leaders to provide more meat for their people will be harder to fulfill because of the embargo. [See "Inside Report" today, Page 2.]

Some conservative Republicans, including Sen. Jesse Helms (R) of North Carolina, would broaden the grain embargo to cover other areas of trade.

Others, like Secretary of State Alexander M. Haig Jr., have argued that lifting the embargo would send the wrong signal to Moscow, when it still is not clear that the Soviets and their allies will not invade Poland.

Meanwhile, several West European countries -- some of America's closest NATO allies among them -- continue negotiations with the Soviet Union on an enormous natural gas deal.

West Germany, France, Belgium, the Netherlands, and other Western nations would help the Soviets build a multibillion-dollar gas pipeline through which Soviet gas would flow to Western Europe.

Through this gigantic deal Western powers hope to reduce their current dependence on Arab oil.

Apart from natural gas, trade generally with the Soviets is important to West Germany, France, and other European countries, which export large quantities of machinery, machine tools, and other manufactures to the USSR.

This, to some US critics of the grain embargo, means that America's allies continue to profit from "business as usual," while American farmers and the US balance of trade are punished.

The debate over the grain embargo coincides, as it happens, with a Reagan administration effort to redraft some trade laws to make it easier for US firms to compete with foreign companies for overseas sales.

Specifically, the White House wants Congress to reduce the tax burden on Americans working overseas and to simplify the Foreign Corrupt Practices Act. Work on these measures would follow passage of the President's current tax and budget proposals.

Separately, President Reagan rejects the argument of US automakers that the United States should formally curb the import of Japanese cars.

The administration, in other words, approaches its debate over the Soviet grain embargo from a position of supporting free trade.

President Reagan must decide two things --all, and whether or not to conclude another multi-year grain agreement with Moscow.

In 1972, heavy and unexpected Soviet grain purchases drove up domestic US prices of bread and other grain products. To avoid a repetition, the United States negotiated a five-year agreement with Moscow, running from October 1976 to Sept. 30, 1981.

The Soviets were obliged to buy a minimum of 6 million tons of grain (half wheat, half corn) each year, with permission to buy another 2 million tons of grain.

To satisfy Soviet demand beyond the 8 million-ton figure, US grain exporters had to win approval from the US government. In October 1979 the US approved the sale of 25 million tons in all -- roughly two-thirds corn and other feed grains, one-third wheat -- to be delivered during the pact's fourth year.

On Jan. 4, 1980, President Carter canceled contracts on 17 million tons of grain, allowing the Soviets to buy only the 8 million tons called for under the five-year agreement. On Jan. 2, 1981, he renewed the embargo.

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