569 



sales of the bulk of the U.S.S.R.'s annual gold output, a more effective 

 system of attracting American tourists, and a full exploitation of the 

 new shipping opportunities for both freight and passengers. Joint ven- 

 tures in the tourist and shipping areas would probably be necessary to 

 teach the higher levels. 



In assessing Soviet export trade potential, the following variables 

 are most relevant : 



(.1) Soviet willingness to shift exports of oil and gas from other 

 markets, including domestic and Comecon, to the United States; 



(2) the size of L7.S. Government (P^xport-Import Bank and Com- 

 modity Credit Corporation) and private credits to the Soviet Union 

 as part of large-scale joint ventures for raw material extraction proc- 

 essing, transportation, and marketing. Without large-scale projects, 

 potential energy, metal, timber and other raw material resources may 

 not be economically exploitable. Moreover, without Western capital, 

 credit, and technology, many of the rich potential Siberian resources 

 may not be exploited for decades. Increased output marketed by West- 

 ern multinational corporations may permit a significant net increase 

 in export capability above that required to repay the financing. 



(3) U.S. willingness to extend most-favored-nation treatment to 

 the Soviet Union; 



(4) Soviet ability to launch a major effort to produce industrial 

 products for the AVestern market facilities that provide efficient mar- 

 keting not subject to market disruptions problems. Use of such multi- 

 national companies, as International Telephone and Telegraph Cor- 

 poration, which might involve trade of machine tools for electric 

 equipment — an industrial version of the Pepsi for vodka barter ar- 

 rangement — could prove attractive. 



These variables will largely determine the size of total U.S.-Soviet 

 trade turnover in the years ahead. With current Soviet priorities for 

 technologically advanced goods, the detente environment, and the 

 equalization of U.S. commercial policy toward the U.S.S.R. with that 

 of other industrial countries through liberalized export control and 

 credits, the Soviet demand for U.S. imports is likely to run ahead of 

 their ability to pay. Therefore, the Soviet-U.S. trade turnover may be 

 expected to maintain its current level, increase modestly, or rise signifi- 

 cantly, depending on the above noted variables. 



These three steps in potential turnover of 1980 may be illustrated 

 by the following estimates : 



(1) A diversion of Soviet oil and gas exports and other hard cur- 

 rency earning exports to the United States and modest credit allow- 

 ances, for example, might lead to an expansion of trade to an average 

 annual level of $700-800 million. 



(2) If the Soviet Union receives MFN status and liberal credits 

 and initiates an aggressive industrial product sales effort, a $2-3 bil- 

 lion trade turnover is possible. 



(3) A projection of $4-5 billion annual trade turnover is conceiv- 

 able if negotiations on joint U.S.-Soviet development of Siberian nat- 

 ural gas resources are successful. The two Liquified Natural Gas 

 (L.NG) projects under discussion could total investments of $5-6 bil- 

 lion each with repayment presumably over an 8-10 year period (the 

 presumed Export-Import Hank maximum). 



