1581 



It is also possible that tlie internal organization of the Soviet Union 

 in response to the pressures generated by expanded trade with the 

 West may include such reforms as indicators of "profitability," de- 

 centralized decisionmaking by cnteiprise managers, and wage and 

 profit "incentives". Thus, "New planning technicpies, a more flexible 

 piice system, and increased reliance on market forces are key aspects 

 of the reforms". (]). 550) 



As the report pointed out : 



While Soviet reformers have not emphasized the international implications of the 

 reforms, it is clear that a more rational economic decisionmaking structure would 

 facilitate the integration of the Soviet economy into the international economic 

 system. Rationalization of Soviet prices would encourage the importation of goods 

 produced inefRcientlj' by domestic industries. At the same time, by fostering effi- 

 ciency in domestic enterprises the Soviet Union may be able to expand its e.\))orts 

 to Western markets. Moreover, economic reform would remove many of the 

 features of Soviet central planning which inhibit Western businessmen from 

 dealing with Soviet foreign trade ()rganizations. (]>]). 5i)l-~>k>2) 



How the Case Developed 



The Hardt-Holliday study traced the uneven course of U.S.- 

 U.S.S.R. trade relations from the 1920s through diplomatic relations 

 and a trade agreement of 1933; at that time the U.S. Export-Import 

 Bank was created to finance trade with the Soviet Union. Then, during 

 Workl War II, U.S. military and civilian goods were delivered to 

 the U.S.S.R. through the Lend-Lease Program. After 1945 efforts to 

 normalize peacetime trade relations between the two countries and 

 to bring the Soviets into the world economic community were largely 

 abortive. There were several reasons for this failure. As the report 

 observed : 



To a large extent, Soviet foreign economic policy in the late 1940s and early 

 19o0s was a continuation of its j^rewar strategy of minimizing its economic ties 

 to the industrial West. During the 1930s, Soviet foreign economic relations had 

 been characterized by a policy of self-sufficiency or autarky. Although the im- 

 portation of high-technology products and, for a time, the services of foreign 

 engineers were permitted to meet high-priority, short-run needs, minimum 

 reliance on the non-Communist world economy was a primary indicator of 

 econouiie .success, (pp. 53^^-534) 



Other factors on the Soviet side were the leadership's ideological 

 hostility toward the United States, unresolved questions of pre- 

 1920 indebtedness of Russia to the United States, and more generally 

 the suspicion of "capitalist" countries and the "Soviet predilec- 

 tion for comprehensive planning and control of the domestic 

 economy. ..." 



"Cold war" attitudes began to harden soon after the close of World 

 War II, with trade declining to a low point in the early 1950s. Soviet 

 moves to relax from an extreme position of autarky in the late 1950s 

 and the 1960s were again set back by the Cuban crisis, the invasion 

 of Czechoslovakia, and the Vietnam War. 



On the United States side, "The central feature of U.S. foreign trade 

 polic}^ toward the Soviet Union during the Cold War period was an 

 attempt to deny the Soviet Union the benefits of trade with the more 

 advanced industrial West." There were also allegations of unethical 

 Soviet trade practices such as dumping, pirating of inventions, de- 

 liberate disruption of markets, and use of slave labor. 



However, during the 1960s, several small steps were taken to expand 

 U.S. -U.S.S.R. trade. U.S. export controls were eased and agricultural 



