Gordon B Smith - The Politics of East-West Trade

The Politics of East-West Trade

* National Security and Technology Transfer: The Strategic Dimensions of East-West Trade, edited by Gary K. Bertsch and John R. McIntyre

East-West Relations in Europe: Observations and Advice from the Sidelines, 1971-1982, Paul E. Zinner

Soviet Diplomacy and Negotiating Behavior: The Emerging New Context for U.S. Diplomacy, Joseph G. Whelan

*Managing U.S.-Soviet Rivalry: Problems of Crisis Prevention, Alexander L. George and others

The Future of European Alliance Systems: NATO and the Warsaw Pact, Arlene Idol Broadhurst

Nuclear deterrence in U.S.-Soviet Relations, Keith B. Payne

* China, the Soviet Union, and the West: Strategic and Political Dimensions for the 1980s , Douglas T. Stuart and William T. Tow

*Securing the Seas: The Soviet Naval Challenge and Western Allianae Options, Paul H. Nitze, Leonard Sullivan, Jr., and the Atlantic Council Working Group on Securing the Seas

*Available in hardcover and paperback.

edited by Gordon B. Smith

Trade and technology transfer have come to occupy a major role in Soviet-American relations. Twice in recent years embargoes have been imposed on the sale of U.S. high technology to the U.S.S.R., and these sanctions have had wide-ranging political and economic consequences in the Soviet Union, Europe, and the United States.

The Politics of East-West Trade draws together leading U.S. and European scholars, government officials, and businesspeople to explore the complex issues arising from U.S. trade policies toward the Soviet Union. The book begins with an assessment of the degree to which the Soviet economy is dependent on Western technology imports. In subsequent chapters, in addition to assessing the general nature and volume of U. S .-U. S. S .R. trade, the contributors consider the extent to which Western technology has helped or hindered Soviet economic and technological growth; the specific impact of U.S. trade sanctions in four critical sectors (computers, energy, agriculture, and defense); and the impact in the West of U.S. trade policies (for example, recent embargoes have resulted in the loss of several billion dollars in U.S. equipment and commodity sales to the U.S.S.R.). Examining the serious strains that differences over East-West trade policy have put on U.S. relations with its West European allies, the authors conclude that there are tangible limits on the ability of the United States to use technology trade as leverage to alter Soviet policies.

Gordon B. Smith is associate professor in the Department of Government and International Studies at the University of South Carolina. He is co-editor (with Peter B. Maggs and George Ginsburgs) of Law and Soviet Economic Development (Westview, 1982).

edited by Gordon B. Smith

First published 1984 by Westview Press

Published 2019 by Routledge
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Library of Congress Catalog Card Number: 84-51106

ISBN 13: 978-0-367-29511-0(hbk)

On January 4, 1980, less than two weeks after the initial Soviet intervention in Afghanistan, President Carter imposed a series of sanctions designed to "make the Soviets pay a price for aggression." The sanctions included:

As the President explained in a briefing to Members of Congress, the Administration had three options: military, political, and economic. The military option was ruled out because it was deemed "inappropriate" and "infeasib1e." Political actions, such as a resolution in the U.N. General Assembly condemning the intervention, were considered too mild. The U.S. opted for trade sanctions "to punish" the Soviet Union and to impress on the Soviet leadership the seriousness with which the U.S. viewed the invasion.

This was not the first time that the United States undertook economic sanctions against the Soviet Union. Rather, it was the renewal of a policy frequently employed since the rise of the Bolshevik regime. In 1919 the refusal of the Soviet Government to honor the debts of the tsarist regime prompted the Supreme Allied Council to impose an economic blockade on Soviet Russia.

In February 1949, following the Soviet takeover of Eastern Europe, the United States Congress enacted the Export Control Act to prevent the export of goods which could make a significant contribution to the military potential of the Eastern bloc countries. During the Korean War the Export Control Act was strengthened with the passage of the Battle Act, which empowered the President to terminate all military, economic, and financial aid to any nation shipping strategic products to the East.

Trade sanctions directed against the U.S.S.R, were imposed by the United States even during the era of detente. In 1974 Congress attempted to link Most Favored Nation trading status for the U.S.S.R. to increased Jewish emigration. Concerns in the U.S. over human rights violations in general, and the trials of Anatoly Shcharansky and Alexander Ginzburg in particular, resulted in a tightening of U.S. export regulations on oil and gas equipment during the summer of 1978.

But because of their scope and visibility, Western trade sanctions directed at the U.S.S.R. in the wake of the invasion of Afghanistan caused a significant erosion of commercial relations that had been established since the mid-1960s. The Afghanistan trade sanctions sparked widespread controversy in the West over the utility of employing economic embargoes. During the 1980 election campaign candidate Reagan pledged to lift the grain embargo, noting that its primary effect was to harm American farmers. However, concerns in the West surrounding events in Poland and the planned construction of a natural gas pipeline from Siberia to Western Europe prohibited the normalization of trade in high technology goods and equipment.

Facing a seriously deteriorating domestic situation, the Jaruzelski regime in Poland declared martial law on December 13, 1981. The U.S. responded ten days later by: