Opinion • Commentary

THE SUN, Wednesday, May 26, 1982

A 11

Washington.

IN THE WAKE of the Soviet invasion of Afghanistan and then of the suppression of liberty in Poland, two successive American administrations vainly sought European support to restrict East-West trade. The resulting disagreements have left an unfortunate residue. In America, many believe that Europe subordinates long-term strategy and even security to short-term domestic politics; in Europe, many argue that America seeks to play for geopolitical stakes with European chips, risking the domestic cohesion of friendly countries without ourselves making

By Henry A. Kissinger

equivalent sacrifices, as the lifting of the grain embargo suggests.

Pressures for East-West trade grew in the late 1960s and early 1970s—ironically, following the Soviet invasion of Czechoslovakia. It was argued in some quarters that despite occasional Soviet transgressions, increased trade would moderate Soviet behavior by making the U.S.S.R. increasingly dependent on the technology and grain of the industrial democracies. The American administration then in office, in which I served, held from the first that trade should follow prior demonstrations of Soviet commitment to a more peaceful course and should be linked to Soviet international behavior. When the Soviet Union entered into serious negotiations on Berlin, strategic arms limitations, mutual force reductions and other matters, the United States gradually lifted restrictions, on a case-by-case basis and tied to specific projects. Our European allies followed, and far surpassed us in both the scale of their trade and credit and the ease with which they made it available.

# Trading with Russia—I

## A Political Strategy for Economic Relations

Whatever the merit of the original theories, it is now clear that trade and credits can moderate Soviet conduct only if the Kremlin fears that intransigence will cost it the economic benefits it seeks. Yet that is what is most insistently rejected by the domestic interest groups in all countries that gain from East-West trade and by the Western governments that they influence. More and more, the governments of the industrial democracies act on the premise that the immediate gains in employment outweigh the political risks of strengthening a hostile and aggressive political system. This is all the more shortsighted, since a mounting tide of radicalism and insecurity in the world—inevitably encouraged or abetted by a growth of Soviet power unrestrained by some agreed code of conduct—will sooner or later compound all economic difficulties as well.

There is little doubt that the negotiating balance in East-West trade has been reversed over the past decade. In every crisis, the West invents new excuses for declining to interrupt economic relations. Indeed, economic relations have done much more to induce Western restraint in the face of Soviet misconduct than to encourage Soviet restraint in international behavior.

The inequality in bargaining positions is almost entirely the result of the disunity of the democracies. The West is divided into competing units that are sometimes prevented by antitrust legislation from acting together, and often encouraged by governments that seek special benefits for their national industries by concessional credits. Loans

have been offered or encouraged with little or no consideration of Soviet or East European ability to use or repay the funds. Default is avoided by "rescheduling," that is, lending more money to pay interest on what are in effect bad loans—protecting the lenders' balance sheet. In these circumstances it is easy for the Kremlin to play Western countries, and even industries, against each other, obtaining benefits not justified by the economic balance of advantage, much less by political circumstances.

The result has been an anomaly. By any objective analysis, the Soviet Union and its satellites are infinitely more dependent on East-West trade than their trading partners, the industrial democracies are. The Soviet Union cannot feed itself without the non-Communist world's grain; it desperately needs Western technology. The inequality in benefits would long since have reduced trade to a trickle had not Western governments stepped in with direct or hidden credits, which now amount to nearly $90 billion for the Communist world. In addition, many export prices are subsidized by governments directly or indirectly. The Communist countries thus are not only gaining a relative advantage in trade, but are also being financed by the nations against whom they are simultaneously conducting a geopolitical offensive. Lenin's legendary dictum that capitalists would compete to sell the rope with which they would be hanged is coming true with a vengeance—for Lenin never guessed that Western governments would provide the money to buy the rope and subsidize the

price to facilitate the purchase.

It is unthinkable that the West should continue to use its overwhelming share of the world's economic power so frivolously. We are on the defensive not because we lack resources but because we have failed to muster the will or the leadership to organize a coherent response. We have tried stop-and-go sanctions. They have failed because they affected various countries and different sectors of the economy unequally. They have turned into pinpricks dramatizing the West's weakness rather than its mastery of the situation.

The issue has further been clouded by the extreme manner in which the choices have been stated. Some opponents of East-West trade seem to hope that a total denial of economic benefits would force the collapse of the Soviet system. This theory is disproved by history. The Soviet system survived several decades of economic isolation and did not crumble. And it runs counter to the domestic pressures for seeking negotiations on a broad front. The last 18 months show that the alliance will not sustain a policy of confrontation for its own sake, unrelieved by any hope of diplomatic progress.

But the opposite theory, of the automatic mellowing effect of trade, has also been demonstrated to be fallacious. Soviet behavior in recent years has given the lie to the argument that trade and credits by themselves will bring about a benign evolution of the Soviet system. Soviet-Cuban intervention in Angola, in Ethiopia, and in South Yemen; the invasion of Afghanistan; the suppression of Soli-darity in Poland; and the use of toxic chemical and biological warfare in Afghanistan and Southeast Asia have all occurred in precisely the period of expanded East-West economic cooperation.

(First of two articles.)

Mr. Kissinger's latest book is "Years of Upheaval."

Copyright 1982 The New Republic, Inc.