1587 



Credit Corporation, and private sources, (c) U.S. willingness to extend 

 most-favored-nation status to the U.S.S.R,., and (d) So\-iet ability 

 to mobilize production of items for Western markets, (p. 569) 



Apart from emergency demands for grain to make good the short- 

 fall of Soviet harvests, Soviet representativ^es appear most interested 

 in imports in which the United States has a degree of technological 

 leadership, such as: 



(1) Large-scale petroleum and natural gas extraction, transmission, and dis- 

 tribution systems, including special permafrost problems and oil recovery sys- 

 tems; 



(2) Management control systems utilizing computer facilities; 



(3) Mass production machinery output, such as of trucks and cars; 



(4) Animal husbandry as characterized by U.S. agricultural business; and 



(5) Tourist systems including hotels, packaged tours, and transport. 



Each of these technological areas requires large-scale financing, consortium 

 ■operations, and marketing systems. The experience of U.S. multinational cor- 

 porations might lend itself to industrial coojioration with the Soviet Union, (p. r)59) 



However, the report concluded that the volume of Soviet exports 

 to the United States is unlikely to reach a large share of either U.S. 

 trade or GNP. The U.S. advantages as likely to center on such specifics 

 as imports of oil and gas and exports of feed, cereal grains, and com- 

 puters and other high technology products. 



POLITICAL CONSEQUENCES 



The report strongly suggested that the thawing of the Soviets 

 toward trade relations with the United States is attributable to an 

 "apparent reordering of Soviet priorities," in favor of "technological 

 change and an improvement in the availability of desirable consumer 

 goods to the Soviet workers and peasants." The extent of this re- 

 ordering "turns in large part on how much of the ^Soviet output 

 goes to defense and on the volume of Soviet trade with other nations." 

 The question is whether military priorities will be sustained along 

 with the increased emphasis in other areas, or be superseded by 

 nonmilitar}^ economic activity. Even the prospect of a change in 

 priorities gives rise to some hope of a relaxation of the arms race. 

 Thus: 



... if the Soviet Union should reorder its priorities and permit more foreign 

 decisionmaking involvement in domestic cooperative ventures, significant long-run 

 benefits of a predominantly political nature might accrue to the United States 

 such as: (a) the potential reduction of the Soviet threat to our security from 

 reordered Soviet priorities; (b) a degree of Soviet acceptance of the international 

 system, implied by the U.S.S.R.'s permitting domestic involvement of foreign 

 corporations as partners; and (c) political advantages inherent in increasing 

 international commercial and financial intercourse. Overall, such political gains 

 might far outweigh the relatively modest economic returns, (pp. 602-603) 



The report identified three political costs to the United States 

 that warrant attention: 



1. The risks involved in the unreliability of the Soviet Union as a supplier of 

 important raw materials. Reliance on the Soviet Union as a source for vitally 

 needed energy resources appears to be a particularly risky undertaking. 



2. Contributions to the Soviet fund of technical knowledge that could be 

 translated into security programs or which could result in the release of resources 

 for military programs. 



3. Potential leverage to the Soviet Union that could result from Soviet control 

 over U.S. investments and personnel — a possible source of economic blackmail, 

 or an economic hostage system. 



There were also three possible political benefits: 



