1828 



"manifest destiny" would imply. The outcome of the problem remains 

 in doubt, although some progi-ess toward a comprehensive treaty has 

 been made in the United Nations Law of the Sea Conference. What- 

 ever it proves to be, it will have great significance for the supreme 

 global issue of striking a workable balance between independence and 

 interdependence. 



CASE six: U.S.-SOVIET COMMERCIAL RELATIONS 



Much has happened in United States-Soviet commercial and politi- 

 cal relations in the 4 years since the Hardt-Holliday study *^® was pre- 

 pared. However, in tlie context of interdependence the study seems 

 more relevant and timely than ever. 



A basic question raised in the study is whether the Soviet Union 

 is prepared to operate as a participant in the international economy. 

 Another question of more direct and immediate significance for the 

 United States is whether the Soviet Union is ready to shift resources 

 from a continuation of the arms race in order to use its role in the 

 international economic system to benefit consumers within the U.S.S.R. 

 A third question that has emerged since the study was published in 

 1973 is whether the United States is prepared to facilitate such changes 

 of direction by the Soviet leadership. 



A significant statement was made in the study regarding the possi- 

 bility that closer United States-Soviet economic relations might 

 "unleash irreversible forces of constructive change which could, in 

 turn, contribute to international interdependence and stabihty." 

 Moreover, transactions resulting from relationships established by 

 U.S. agribusinesses and by the U.S. oil and gas industry with their 

 Soviet counterparts might prove substantial, but "political gains 

 might far outweigh the relativeh^ modest economic returns." 



The statement was preceded by caveats and a balancing of political 

 costs and risks against foreseeable or likely political benefits. These 

 were then summarized in relation to likely economic gains to the United 

 States : 



The volume of Soviet trade with the United States by any projection is not 

 likely to represent a large share of U.S. trade or GNP. Economic advantages to 

 the United States are likely to be centered on such specific sectors as imports of 

 petroleum and natural gas, and exports of soybeans, feed and cereal grain, and 

 comjbuters, and other high-technology products. The balance of payments deficit 

 of the United States and our program for expanding the export of high technology 

 may receive benefits which are, at best, only marginal compared to those which 

 may derive from potential changes in economic relations with non-Communist 

 countries. 



At the same time, 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 potenticil reduction of the Soviet threat to our 

 securitj' 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 in- 

 creasing international commercial and financial intercourse. Overall, such political 

 gains might far outweigh the relatively modest economic returns.^*" 



The concept of interdependence is given concrete meaning by the 

 estabhshment and growth of institutions, relationships, and procedures 

 for coping with it. The eventual development of United States-Soviet 



«» Hardt and HoUiday, U.S.-Soviet Commercial Relations, vol. I, pp. 526-606. 

 "o Ibid., pp. 601-602. 



