EAST-WEST TRADE: Moscow Wants a Deal

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AS U.S. Agriculture Secretary Earl Butz left Moscow last week after an unprecedented 90-minute talk with Soviet Party Leader Leonid Brezhnev, he characterized the conversation as "warm, frank and friendly." For once those diplomatic clichés seemed apt. With President Nixon's visit scarcely a month away, Brezhnev, who never before has talked so long with an American official, was making a major gesture of cordiality toward the U.S. He also was emphasizing Moscow's desire for a big increase in trade with the U.S.—a desire that Washington shares.

Butz later predicted that the Soviets might buy as much as $200 million worth of American wheat and feed grains every year for the next decade. That puffy prediction was bound to please American farmers—but how would the Russians raise the money? Butz suggested to Brezhnev that the Soviet Union might consider paying for the grains by exporting its surplus of Siberian natural gas to the U.S. It was, of course, too early to agree on a deal that would cost at least $5 billion for plants, pipelines and ships, with most of the cost borne by the Russians. Nonetheless, Butz left behind a team of experts who are negotiating the terms of a big grain deal, which may be signed, along with an agreement limiting anti-ballistic missiles, during Nixon's visit beginning May 22.

Buying Spree. The U.S. needs to catch up with other non-Communist nations, which find the Soviet Union an expanding and often profitable market. Hoping to modernize outmoded industries, the Russians have bought scores of modern plants and equipment abroad: synthetic-fiber factories from Britain, chemical factories from Japan, and $250 million in equipment from Italy's Fiat for an auto plant, which is now turning out nearly 1,000 cars a day. West Germany last year sold $460 million worth of goods to the Soviets, followed by Japan ($375 million) and Italy and France (each nearly $300 million). But U.S. exports to Russia were only $160 million.

This could be greatly increased because Russian experts profess a preference for U.S. technology, and they are fascinated by the prospect of dealing with powerful American corporations. Moscow is especially keen to buy U.S. oil-drilling and refining processes, chemical plants, automated machine tools, food-packing equipment, and road-building machinery. The Kremlin would like—and will probably get—help from American firms in setting up the long-delayed Kama heavy truck factory. Pittsburgh's Swindell-Dressier Co. has won a $10 million contract for designing the arc furnaces for the plant.

There is progress on some other fronts. Collins Radio has landed a contract to install navigation and communication equipment on every Russian Yak-40 jetliner that is sold in non-Communist countries; the deal is worth $150,000 a plane. Joy Manufacturing Co. has sold several million dollars worth of the latest automated mining equipment. ITT will send a team to Moscow this month to discuss what it might do for the Soviets' underdeveloped communication systems. The Brunswick Corp. is even equipping a 24-lane bowling alley in Moscow.

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