Going with the grain
There are strong indications the Reagan administration is about to renew the grain trade agreement with the Soviet Union for one more year. This is significant news. The President stands opposed to negotiating a new long-term agreement while martial law continues in Poland. But American farmers - those titans of food production - need to sell their crop surpluses and are pressing Mr. Reagan for a deal with the Russians. Such domestic pressures are hard for the administration to ignore in an election year. Even a short-term grain deal makes for good politics.
It also makes for good economics. With worldwide recession causing a dramatic drop in the US export of manufactures, trade in grain and food products is a major source of helping the nation's balance of payments. It also aids the farmers, many of whom are struggling to stay afloat in the face of mounting debt and high interest rates.
But Mr. Reagan clearly has a dilemma. This is the kind of action which opens the US to the charge of having a double standard. The European allies are asked - indeed pressured - to delay their long-planned pipeline project with the Soviet Union while the United States, when it suits its convenience, carries on profitable grain sales to the Russians. The allies smart at what they see as the administration's parochial view of trade - spelled out by US Treasury Secretary Donald Regan recently when he said that ''as far as we're concerned anything that's done to improve the Soviet economy. . . will eventually hurt us and could harm us. . .''
How much such talk is designed for domestic political consumption and how much it reflects thinking at the top is hard to know. Certainly there can be honest differences of approach on how to deal with the Soviet Union. The President by instinct and inclination favors a tough posture. But, if further allied strains are to be avoided, the whole issue of East-West trade has to be clarified. Not only within the administration - something a new intergovernmental group on international economic policy is set up to do - but between Washington and the allies. Secretary of State George Shultz, with his economic experience and understanding of the importance of global trade to the US national interest, doubtless will want to work out guidelines to avoid frictions in the future.
Trade with the Soviet bloc, contrary to the view of some in the administration, is not a giveaway. Of course it benefits the Soviet and other communist economies. That is the nature of trade - it is mutually beneficial. Otherwise there would be no trade. In the case of the Soviet Union, it is a question how much imports of Western technology have actually contributed to economic growth (now stagnant). But, in any event, the idea that any help at all to the Soviet economy necessarily harms the West is an oversimplified way of looking at things.
Such an idea seems to reflect a fearful view that the Soviet system has no capacity for change and that denying the Russians the achievements of the West will force it to bring about internal reforms. There is no evidence this is so. Nor should it be thought, to take the other extreme, that East-West trade will somehow liberalize the Soviet regime. It won't. The dynamic of change comes largely from within not from without (and there has been significant change since the time of Stalin terrorism). But it can be said that trade does involve the Russians in the international arena in a constructive rather than aggressive way, gives them a stake in global stability, and helps foster the climate in which those internal Soviet forces favoring reform - because the system is not working - can operate. On the other hand, if the Russians feel themselves besieged from without, it is unlikely they will lift the lid at home.
Moreover, let the fact not be lost sight of that trade means jobs and good business for the West.
This is not to deny that trade should be conducted according to strict credit and other standards. It is not to deny that the West should be wary of dependency on the Soviet Union for key resources. It is not to deny that NATO should negotiate arms control with the Russians from a position of military strength. It is not even to deny that economic sanctions are sometimes a useful political weapon (if consistently applied, as they were not in the case of Afghanistan).
But it is doubtful that economic warfare as a general policy serves the interests of the United States and its allies. Cautiously extending the US grain agreement with Moscow makes sense. It also points up the urgency of getting the allies together and straightening out the rules by which they do business with the East.