572 



led to a further revision in Soviet economic priorities, and large orders 

 for British textiles were not forthcoming. 



The traditional Soviet foreign trade policy of autarky or self-suf- 

 ficiency seems to foster instability in foreign trade relations. Soviet 

 leaders who advocated an autarkical foreign trade policy believed that 

 continued reliance on foreign sources would be politically undesirable 

 and economically hazardous. There was a tendency among Soviet pol- 

 icy makers to overestimate the political and economic dangers of trad- 

 ing in the "anarchic" capitalistic markets. The present Soviet leader- 

 ship appear to be willing to reassess the ideological underpinnings of 

 the traditional policy of autarky: if so. the Soviet Union may become 

 a steadier customer over time. 



Certainly, the new policy of industrial cooperation with Western 

 industrial countries would suggest a change in policy. Coproduction 

 ventures with Western firms to develop oil and gas resources in Siberia 

 would presumably be negotiated to continue for a decade or more. 

 Moreover, feed grain sales and other agricultural exports to extend 

 over multiple years — three at the outset — may create a more stable pat- 

 tern of trade. 



Increasing U.S. sales in agribusiness facilities, petroleum and natu- 

 ral gas equipment, computer systems, and a variety of other high-tech- 

 nology lines may be an effective wedge into the Soviet market: once 

 begun, these sales tend to accelerate over time. Soviet purchases of T \S. 

 computers, for example, may lead to follow-up sales of software, to 

 new Soviet requirements for peripheral equipment, and to broader 

 Soviet requirements for managerial expertise. The complexity of mod- 

 ern technology transfer creates a need for long-term commitments. In 

 many cases, the Soviet Union will be required to make substantial pur- 

 chases over a number of years in order to receive and continue to bene- 

 fit from T'.S. technology. Thus, requirements for long-term technologi- 

 cal transfers will tend to stabilize the pattern of Soviet foreign trade. 



Tt clmvlogiral Export Policy 



Increased Soviet demand for U.S. high-technology products should 

 help to achieve the U.S. goal of increasing that type of export. Such 

 industries as elect ionics, agribusiness, petroleum refining, and automo- 

 tive tooling and forging equipment are characterized by economies of 

 scale, i.e., the larger the volume of production, the lower the per unit 

 cost. At a time when government investment, subsidies, and tax incen- 

 tives are being used to ensure that U.S. prices are competitive in the 

 world market, an expansion of foreign markets is a factor that may 

 facilitate reductions in cost and presumably prices. The opening of 

 the Soviet market to U.S. businesses may provide the basis for a larger, 

 more economical scale of domestic output. Moreover, an expanding 

 market may encourage research and development on a scale that would 

 help U.S. industries mail it am their competitive position. 



Two important considerations should be kept in mind in assessing 

 the advantages of increased U.S. -Soviet technology transfers. First. 

 does the sale of high-technology products to the Soviet Union encour- 

 age or discourage Soviet military preparedness? " Second, will such 



86 See above, Changing Priorities in Resource Allocation: Growth vs. Defense, pp. 24-29. 



