530 



which, in turn, were expected further to facilitate improved political 

 relations. On those earlier occasions the seeming reconciliation of the 

 differences between the two systems led to an apparent assumption in 

 the United States that Sovietleaders would be willing to modify their 

 system for economic gains. In this earlier adversarial relationship 

 Soviet political concessions appeared to be equated with political gains 

 to U.S. interests. Now the idea that their loss is our gain — a zero-sum 

 game approach — has given way in official thinking to Dr. Henry Kis- 

 singer's notion of mutual interest and constraint. In reference to the 

 Joint Commercial Commission and the Summit accords, Mr. Willis C. 

 Armstrong, Assistant Secretary of State for Economic and Business 

 Affairs, observed : 



. . .These programs are leading us into a stage of practical forms of intimate 

 cooperation with the Soviet Union for years ahead. They constitute a framework 

 of interlocking agreements to build a vested interest on both sides in reducing 

 tensions and freeing us from confrontation. 1 



The linkage of the new commercial relationship to U.S. -Soviet polit- 

 ical relations highlights the need for careful scrutiny by the U.S. Con- 

 gress. Members of Congress have expressed interest in improved East- 

 West trade relations in a series of legislative proposals and hearings 

 dealing with import restriction, export controls, and credits. Congress 

 has already acted to reduce substantially the impact of export controls 

 on U.S. -Soviet trade. As of May 1973, other issues of East-West trade 

 await congressional action. The most important of these is considera- 

 tion of the President's request for authorization to extend most- 

 favored-nation (MFN) status to the Soviet Union. Favorable congres- 

 sional action on the President's proposal is necessary for the trade 

 agreement to enter into force. Congress may also be asked to consider 

 Export-Import Bank (Eximbank) financing of U.S. -Soviet trade. 

 While no additional authorization is needed for Eximbank participa- 

 tion in trade with the Soviet Union, it is likely that Congress will be 

 asked to increase the Bank's overall lending authority and terms of 

 loans so that it may accommodate some proposed large transactions 

 between U.S. companies and Soviet foreign trade organizations. 



A Net Assessment of U.S. Interests in Expanding Commercial Rela- 

 tions With the U.S.S.R. 



This study will consider U.S. policymakers' expectations of diplo- 

 matic, national security, and economic gains to the United States from 

 expanded economic exchanges with the Soviet Union, and will attempt 

 to assess the net advantage to the United States. Are the projected 

 changes likely to be in the best economic interests of the United States? 

 What effect are increased economic exchanges, especially in technology- 

 intensive products, likely to have on U.S. foreign policy goals and on 

 U.S. national security? 



A crucial consideration for U.S. policymakers is the Soviet leader- 

 ship's motivation for seeking better economic ties with the United 

 States. ( Jonsequently, this study will also attempt to provide a rationale 

 for the apparent Soviet change in foreign economic policy. How is the 



1 Speech before the World Trade Institute of the World Trade Center at New York. N.Y., 

 on November 28, 1972 (State Department press release 294 dated November 29). 



