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One of Russia's big lures is its interest rates and repayment terms. U.S. loan interest is high, usually 4%-4½%, compared to 2% on Russia's $100 million loan to Afghanistan, repayable over 30 years. But perhaps the chief appeal of the Soviet program is that Russia, a nation that still needs many raw materials and foodstuffs, can accept commodities in trade that Western countries already have in abundance. The U.S. is actually a competitor of underdeveloped nations in selling such surplus items as rice and cotton, buys many other commodities only when they are scarce. -
With the world commodity market now glutted, the situation is made to order for the Soviets. Iceland made a trade deal with Russia to dispose of its surplus fish, Burma to dispose of its surplus rice. Such countries often accuse the U.S. of damaging their economies by sales of its surpluses on the world market; less well known is the fact that Russia often puts the commodities it takes in trade right back on the market, as it did with Egyptian cotton, Turkish tobacco, Syrian wheat.
A more serious complaint about the U.S. is American trade barriers. Chile last week was preparing to open sales talks with Russia because new U.S. trade restrictions have squeezed its outlet for copper. To make matters worse, the U.S. Tariff Commission last week recommended higher tariffs on imports of lead and zinc, which several Latin American countries export heavily to the U.S.
Russian economic offers often prove less attractive than they first seem; most countries have to accept barter instead of hard cash, often find Russian goods shoddy, Soviet maintenance poor. But so long as the threat of a congressional cutback in U.S. aid and trade programs and increasing pressure for more U.S. tariffs on basic commodities exist, the attractions of the Soviet lure are apt to become even stronger. U.S. business will not only lose some of its present markets, but, far more important, will be kept out of the markets of the future.