CHAPTER 8— UNITED STATES-SOVIET COMMERCIAL RE- 

 LATIONS: THE INTERPLAY OF ECONOMICS, TECHNOL- 

 OGY TRANSFER, AND DIPLOMACY 



I. Introduction 



The general purpose of this study is to examine the interaction of 

 science and technology — including agricultural, commercial, man- 

 agerial, and industrial technology — with diplomacy, in the context of 

 the current and potential growth of U.S.-Soviet commercial relations. 

 A more specific purpose is to assess the prospects for future U.S.- 

 Soviet economic relations, primarily in terms of costs and benefits to 

 the United States, as a subject of importance and immediate concern 

 in itself. 



The establishment of the Joint U.S.-U.S.S.R, Commercial Commis- 

 sion at the May 1972 Summit Conference and the signing of a compre- 

 hensive set of trade agreements on October 18, 1972 opened a promis- 

 ing new period of economic relations between the two nations. The 

 agreements provided a mechanism for removing many of the barriers 

 to normal economic interaction. More importantly, the agreements on 

 economic matters represented another step toward general rapproche- 

 ment between the United States and the Soviet Union. While the 

 agreements were limited to questions of foreign trade and payments, 

 officials of both countries asserted that they would influence the 

 broader spectrum of diplomatic relations. 



A New Opportunity for U.S.-Soviet Relations 



The creation of a new U.S.-Soviet commercial relationship was an 

 important event with historical parallels. In the 1920's and 1930's, a 

 number of U.S. companies established close commercial ties with 

 Soviet industries. After the two countries established diplomatic re- 

 lations in 1933, the U.S. Export- Import Bank was created to finance 

 U.S.-Soviet trade and a trade agreement was signed in order to ex- 

 pand commercial relations. During World War IT a key aspect of the 

 alliance between the United States and the Soviet Union was the de- 

 livery of U.S. military and civilian goods to the Soviet Union through 

 the Lend-Lease program. Again, at the end of World War II, steps 

 were taken to involve the Soviet Union in the world economic commu- 

 nity and to improve U.S.-Soviet economic relations. 



None of these earlier attempts to normalize East-West economic 

 relations was successful. In each case, a change in the international 

 political environment destroyed the basis for long-term economic 

 cooperation. 



Now, once more, a favorable political and economic climate exists 

 for progress in Soviet-U.S. relations. The new commercial relation- 

 ship is one vehicle for progress in relations between the two major 

 world powers. The October 1972 commercial agreement was but one 

 of a series of agreements, with others on science and technology, nu- 

 clear weapons, space cooperation, medical science, and the environ- 

 ment, In previous attempts to improve U.S.-Soviet relations, political 

 understandings were followed by improved commercial relations 



Note : This chapter was prepared in 1973 by John P. Hardt and George D. Holliday. 



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