France begins shipments to USSR
Paris — French officials underlined their determination to meet French contractual obligations for the Soviet pipeline by loading three gas compressors on a freighter Aug. 26, bound for the Soviet Union.
''We warned the United States of the gravity of the issue in France,'' said an official in the French Ministry of Industry, which forced the US subsidiary Dresser-France to deliver the first three compressors of a total shipment of 21. ''There was a possibility earlier to avert action through negotiation.''
The French have insisted that Dresser-France is a company registered in France, subject to French law, and so it is up to the US to find grounds for a compromise in this increasingly acrimonious dispute.
If no solution to the pipeline sanctions quarrel is found, the French official warned of ''great problems for commerce and exchange between the US and Europe.''
An American official here saw the situation differently. ''American law can be made to apply to wholly owned subsidiaries of American companies,'' he maintained.
This is where it stands for the moment, as the other Western European countries with contracts for the pipeline - Britain, West Germany, and Italy - watch nervously to see what the US response to the French challenge will be.
Clearly, the French move, coming as the first concrete measure by a European government against the US-imposed embargo, has presented the Reagan administration with a difficult dilemma.
If the US stands firm on the pipeline sanctions and its threat of punitive action against firms that violate the ruling, as President Reagan has been indicating, it must set an example with the first violation, committed by Dresser-France under French pressure.
If it does nothing, the US faces the likely prospect that the other European countries involved in the mammoth $10 billion construction project will follow their stated intention to fulfill their contracts to supply material for the pipeline.
West Germany has already written to companies due to deliver pipeline equipment, urging them to ignore US sanctions. Britain possesses the legal means , like France, to force British subsidiaries of US firms, or British firms with US licensing agreements, to deliver on their contracts.
Analysts here warn that a heavy-handed attempt by the US to counter the French move could backfire, and deepen already deteriorating Franco-American relations. Where Dresser-France fits in
Operating since 1956 in Le Havre, Dresser-France is a US-owned affiliate of the Dallas-based Dresser Industrial Corporation.
Dresser-France had sales of 476 million francs in 1981 ($95 million), 92 percent of them in exports.
Its contract with the Soviet Union for 21 compressors represents one-quarter of its annual sales. A compressor built by Dresser-France measures 7 meters long and 3 meters high, and weighs 60 tons. The compressors Dresser-France is building will keep up the pressure of the gas in the Soviet pipeline.
Dresser-France's order from the Soviet Union, to be filled by 1983, is worth 120 million francs ($17.6 million).