567 



supply equipment and technical services on credit and are repaid by 

 deliveries of raw materials or commodities produced in the joint ven- 

 tures. Western European shipments of gas pipeline in return for 

 natural gas, and joint Soviet-Japanese exploitation of Siberian timber 

 resources, are examples of East-West coproduction arrangements. 



Representatives of several American companies have discussed co- 

 production ventures with Soviet officials. By far the largest project 

 envisioned at present is a bid by several U.S. and Japanese companies 

 to help finance development of Soviet natural gas reserves. The trans- 

 action could reportedly result in repayment delivery of $45.6 billion 

 of natural gas to the United States and Japan. 78 Several other large 

 projects for raw material development have been discussed. If U.S.- 

 Soviet cooperative ventures on this scale should be established and the 

 central problem of credits resolved, the U.S. -Soviet balance of pay- 

 ments would look quite different. For a number of years, large U.S. 

 surpluses in the trade balance would be offset by outflows of U.S. cred- 

 its. Some of the projects now being discussed would increase Soviet 

 export capabilities only after an extended development period. 



Potential Level of U.S.-Soviet Trade 



A number of optimistic estimates have been made on the future ex- 

 pansion of U.S.-Soviet trade. The former Secretary of Commerce 

 Maurice Stans predicted that Soviet-U.S. trade turnover increases 

 might cumulate $5 billion from 1971-1975. 79 This would imply a trade 

 turnover of over $1 billion in 1975, as compared with $200 million in 

 1971. The U.S.-Soviet commercial agreement more modestly forecast a 

 threefold cumulative increase in three years (1972-75), over the pre- 

 vious three years ( 1969-71 ) . 



Mr. Steven Lazarus, Director of the Bureau of East-West Trade in 

 the Department of Commerce, speaking in Houston in January 1973 

 stated: 



We hope the volume of U.S. East-West trade will approach 4 billion and will 

 yield a positive contribution to our trade balance of approximately one billion 

 annually by the end of the decade. 60 



The trade imbalance of a billion dollars implies U.S. exports of $2.5 

 billion and imports of $1.5 billion with Communist countries. How 

 much of the trade was projected for the U.S.S.R. and how much for the 

 East European countries and the People's Republic of China in 1980 

 is not clear. 



The Lazarus projection may well be very conservative. Preliminary 

 estimates of individual analysts in the Department of Commerce indi- 

 cate that U.S. exports to the Soviet Union and other Eastern Euro- 

 pean countries might reach $2.6 billion in 1978. 81 (See Table 8.) 



w Washington Post. Nov. 3. 1972 and Dec. 26, 1972. 



™?>~eic York Times, Nov. IS. 1971, p. 1. 



* World Trade Club, Houston. Tex.. Jan. 16, 1973. 



81 Erast Borissoff and Stephen Sind, Projections of U.S. Exports to U.S.S.R. and Eastern 

 Europe. U.S. Department of Commerce, Bureau of East-West Trade. Research Note No. 3. 

 May 1973. 



