535 



slowly eroded. Restraints on U.S.-Soviet trade were criticized on sev- 

 eral grounds. Advocates of expanded East-West trade claimed that 

 U.S. controls were not effective. Communist countries which were de- 

 nied certain U.S. poods could often import the same products from 

 other Western countries. It was argued that U.S. companies were 

 needlessly forced to forego mutually advantageous trade opportunities. 

 Those who favored more trade with the Soviet Union also claimed 

 that such trade would improve political ties between the two coun- 

 tries and would help to achieve a more stable international order. Pres- 

 ident Lyndon Johnson appointed a special committee, headed by J. 

 Irwin Miller, to reexamine U.S. trade policy toward the Soviet Union 

 and other East European countries. The committee recommended sev- 

 eral trade liberalization measures and concluded: 



The intimate engagement of trade, over a considerable period of time, when 

 taken with the process of change already under way, can influence the internal 

 development and the external polices of European Communist societies along 

 paths favorable to our purpose and to world peace. Trade is one of the few 

 channels available to us for constructive contacts with nations with whom we 

 find frequent hostility. In the long run, selected trade, intelligently negotiated 

 and wisely administered, may turn out to have been one of our most powerful 

 tools of national policy. 3 



Such arguments led President Johnson to urge increased economic 

 exchanges in order to "build bridges" to the East European countries. 



Soviet- American Trade Prospects Come of Age 



The U.S. domestic economic recession of 1969-70 and the recur- 

 ring balance-of-payments deficits gave rise to a far-reaching review 

 by the Nixon Administration of foreign economic policy. Expanded 

 trade with Communist countries was considered as a means of increas- 

 ing U.S. exports and stimulating domestic production and employ- 

 ment. Initially, however, the administration made no major effort to 

 increase U.S.-Soviet trade. The report of the Commission on Inter- 

 national Trade and Investment Policy, established by the President 

 in May 1970 to study major problems in the field of U.S. foreign trade 

 and investment, was cautious in its appraisal of U.S. foreign trade 

 policy toward the Communist world : 



We see few economic problems in our trade relations with Communist coun- 

 tries. The course of these relations is mostly determined by political factors. 

 The volume of U.S. trade involved is small and is likely to remain so for the 

 1970's. 4 



While recommending change, the Commission expressed specific 

 reservations on expanding technological transfers and on the use of 

 bilateral arrangements in trade: 



Within the bounds set by strategic considerations, the United States should 

 attempt to expand its trade with the Communist countries. To this end, we should 

 align our export restrictions and related regulations with those of other Western 

 nations. 



However, transfers of technologies, production processes, and/or assistance in 

 the establishment of manufacturing facilities should continue to be subject to 



•■""Report of the Special Committee on U.S. Trade With East European Countries and 

 the Soviet Union," Department of State Bulletin, May 30. 1966, p. 855. 



4 A. L. Williams (Commission Chairman), United States International Economic Policy 

 in an Interdependent World (Washington, D.C. : U.S. Govt. Print. Off., July 1971), 

 Vol. I, p. 10. [Hereafter cited as: Williams Report.] 



