561 



United States expanded significantly in 1972, they still totaled only 

 $95 million, and the trade deficit worsened (imports from the United 

 States were $547 million). In 1973, the imbalance is likely to be at 

 least as great because of the large amounts of grain purchased by the 

 Soviet Union. Thus. Soviet obligations to the United States can be 

 expected to grow at a rapid rate. How will these obligations be met? 

 The following are areas in which increases in Soviet dollar earnings 

 are possible : 



(1) Increased Soviet exports of raw materials, such as energy 

 sources and metals, and industrial goods ; 



(2) Gold sales; 



(3) Non-trade income, such as tourism and shipping; 



(4) Multilateral relations, such as balancing a trade deficit with 

 the United States by a trade surplus with Japan ; 



(5) Cooperative ventures; and 



(6) Credits (only a short-term consideration, as eventual repay- 

 ment is required, plus interest) . 



SOVIET EXPORT POTENTIAL 



Soviet exports to the developed West (see Table 5) appear to include 

 several commodities with inelastic demand, i.e., regardless of the price 

 of Soviet exports, the foreign demand is unlikely to change much. 

 Foreign demand for Soviet furskins, for example, appears to be in- 

 elastic. Other commodity exports such as petroleum, natural gas. and 

 some non-ferrous metals face more elastic demands. For this latter 

 group, development of rich Soviet sources in Siberia may facilitate a 

 reduction in price and an increase in supply. If the Northern Sea 

 Route in the Arctic Ocean should become economically usable on 

 closer to a twelve-month basis, the transport by water of wood and 

 wood products, coal and coke, and some other raw materials to Europe, 

 the United States, and Japan might help to expand Soviet exports. 



Metal products such as nickel, palladium, platinum, and chrome ore 

 have been the Soviet Union's biggest exports to the United States (see 

 Table 6). An expansion of U.S. -Soviet trade would bring some in- 

 crease in Soviet exports of these commodities, as the demand of certain 

 U.S. industries for them is growing. Palladium and platinum, for 

 example, are becoming increasingly important in the automobile indus- 

 try for antipollution catalytic exhaust devices. Chrysler Corporation 

 reportedly contracted to import 100,000 ounces of Soviet palladium 

 in 107.3 at a price of $00 an ounce. 07 U.S. imports of nickel, traditionally 

 important in U.S. -Soviet trade, are also increasing. 



87 U.S. News and World Report, Oct. 16, 1972. 



