II. Setting 



The signing of the U.S. -Soviet trade agreement in Washington, on 

 October 18, 1072, represented the culmination of a gradual change in 

 U.S. foreign economic policy toward the Soviet Union. It came after 

 several years of discussion and review of a foreign trade policy de- 

 signed in the early years of the Cold War. The new commercial ar- 

 rangements are a part of an overall change in U.S. -Soviet diplomatic 

 relations. The political detente between the two countries has provided 

 a favorable atmosphere for long-term and mutually beneficial tech- 

 nology transfers. At the same time, the evolving commercial and tech- 

 nological relationship is likely to influence political decisionmaking 

 in both the United States and the Soviet Union. 



TLR. -Soviet Commercial Relations After World War II 



The central feature of U.S. foreign trade policy toward the Soviet 

 Union during the Cold War period was an attempt to deny the Soviet 

 Union the benefits of trade with the more advanced industrial West. 

 Those who advocated restrictions on U.S. -Soviet trade argued that the 

 United States should not contribute to the economic and military 

 power of a country whose domestic and foreign policies were inimical 

 to U.S. interests. This argument was based on the assumption that the 

 United States could retard the growth of Soviet economic and military 

 power by preventing U.S. companies from trading with the Soviet 

 Union. Exports of U.S. technology were considered to be particularly 

 important to the Soviet Union and were therefore singled out for ex- 

 tremely strict controls. 



Another major argument against trading with the Soviet Union 

 was the alleged existence of unethical Soviet foreign trade practices. 

 Among the charges directed at Soviet foreign trade organizations 

 were those of dumping, pirating of foreign inventions, disruption of 

 Western markets for political purposes, and use of slave labor. Such 

 arguments were widely accepted in the early days of the Cold War. As 

 a result, numerous artificial barriers were erected to inhibit normal 

 economic ties between the United States and the Soviet Union. Eco- 

 nomic rationality gave way to national security considerations as a 

 major determinant of U.S. -Soviet economic relations in the early 

 postwar period. The curtailment of commercial transactions with the 

 Soviet Union was consequently made an important U.S. foreign policy 

 goal. 



U.S.-imposed restrictions were not the only causes of Soviet eco- 

 nomic isolation. To a large extent, Soviet foreign economic policy in 

 the late 1940's and early 195CFs was a continuation of its prewar strat- 

 egy of minimizing its economic ties to the industrial West. During the 

 1930's, Soviet foreign economic relations had been characterized by a 

 policy of self-sufficiency or autarky. Although the importation of 



(533) 



