The Soviets, along with clashing factions within the Reagan administration, are watching closely to see how President Reagan tackles the explosive issue of selling grain to the Soviet Union.
If the new sales agreement sought by US farm leaders in sessions with US Secretary of Agriculture John Block July 20 is signed, it "would give the Russians license to invade Western Europe and still receive regular grain shipments," one White House official told the Monitor.
The issue has ballooned in importance because it has become a test of consistency in foreign policy for the new administration among:
* Europeans. Resumed grain sales would be contradictory to West European allies at a time when Mr. Reagan is pressuring them to cancel plans for pipelining Soviet natural gas to Europe.
* Reagan's conservative Republican supporters. The administration should "come up with a coherent, effective response to Soviet aggression in Afghanistan and Poland," rather than offer new trade deals, says Jeff Gayner, director of foreign policy studies for the conservative Heritage Foundation.
* Farming and agribusiness interests. It is "Carter- style, flip-flop diplomacy" for Reagan to first end the grain embargo and then follow up with "a de facto embargo because of the inability of the executive branch departments to reach agreement on what ought to be the foreign policy of the United States vis-a-vis trade with the Soviet Union," according to a key congressional aide.
While Reagan was fending off European complaints at the Ottawa summit July 20 and 21, his staff in Washington had to contend with a fresh bipartisan attack from Congress. A joint letter from Sen. Robert Dole (R) of Kansas and Rep. Thomas S. Foley (D) of Washington called for "a clear indication as to what our future sales policy toward the Soviet Union will be."
The letter to the President criticized the administration for "foreign policy indecision" based on "an apparent disagreement in your Cabinet." The lawmakers called for a new five-year grain sales agreement. They argued that a one-year extension of the current agreement, which expires in September, would not be "consistent with your decision to lift the embargo in April and allow agricultural trade to return to normal."
Present indications are that the administration does plan to draw up a one-year grain sales agreement with the Soviets -- despite continuing opposition from the State Department.
To try to settle differences between the Agriculture Department and the State Department, the President has named Special Trade Representative William E. Brock III to conduct grain sales negotiations with the Soviets. White House spokesmen explain Ambassador Brock's task is to convince both the State Department and skeptical Europeans that there are "different types of trade which carry different political messages." In this view, selling foodstuffs is very different from selling "computers, ball bearings, alloy steels, and other exports with military applications" -- and also very different from Europe becoming dependent on the Soviet Union for vital energy supplies.
To press its case for signing a new agreement, the US Department of Agriculture polled agricultural producers and exporters in a series of Washington meetings July 20. The choice was one of negotiating a new long-term agreement, extending the present agreement for one year, or no agreement.
The consensus was that the first option is too difficult to achieve, given the present East-West political climate. One industry representative who attended the talks said the final vote was for "a one-year extension of the current agreement, including the clause that indicates it will not be subject to any shutoffs."
Apparently, the so-called "non-interruption clause" remains the stumbling block. The State Department refuses to accept this limitation. Soviet officials, in their usual pre-negotiation maneuvering, have made it clear this clause is essential.
To press home their advantage, Soviet officials claim they are having no difficulty buying grain elsewhere. "We are buying everywhere the grain we need, in Canada, in Argentina, and other countries," Soviet trade representative Vladimir Zaichenko told the Monitor, "and what will be left for this [US] market , I don't know."
One American grain sales negotiator explains that the Soviet's present bargaining advantage is the lingering cost of President Carter's grain embargo. As a result of that embargo, he says, "the Soviets learned how to secure their grain from other countries." He sees little doubt that the Soviets can buy 25 million to 30 million tons from other suppliers over the next 12 months.
The US officials says that the only compelling reason for the Soviets to become direct US grain customers again is that "as a centrally planned country, they basically prefer to trade under agreements and with reliable suppliers."