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Negotiators Resume Discussions on Trade Treaty

February 13, 1990

WASHINGTON (AP) _ Soviet and U.S. representatives resumed discussions today expressing optimism that they will be able to complete a wide-ranging trade agreement in time for signing at the summit meeting of President Bush and Mikhail S. Gorbachev.

″We have to do it,″ chief Soviet negotiator Yuri Chumakov told reporters as negotiators gathered at the offices of U.S. Trade Representative Carla Hills for a second day of discussions.

Both sides said they expected to meet a tight deadline to produce a finished document which could be signed when Bush and Soviet President Gorbachev meet in Washington in June.

U.S. Trade Representative Carla Hills said the negotiators were focused on obtaining a treaty that would normalize trade relations between the two countries.

After the opening round of talks, further meetings are scheduled for later this month and in early March.

As Hills’ group worked on a new trade treaty, other administration officials prepared for meetings Wednesday and Thursday in Paris where the United States will seek a coordinated strategy with its Western allies for easing curbs on high technology exports to Eastern Europe.

The meeting of the 17-nation Coordinating Committee on Multilateral Export Controls, known as Cocom, is likely to be stormy. The group sets the rules for selling goods with possible military applications to communist nations.

Last month, the Bush administration said it supported increased sales of advanced computers, telecommunications equipment and machine tools to East European nations that have rejected their former communist governments and have started liberalizing their economies.

The plan calls for eased curbs on high technology sales to take place in stages, with Hungary and Poland to be the first countries to benefit. But there still would be restrictions on the sale of the products to the Soviet Union and spot inspections would ensure the goods intended for Eastern Europe were not later shipped to the Soviets.

Although the administration position represents a major change, Western allies - particularly West Germany - complain the United States is not going far enough given the dramatic changes occurring in Eastern Europe and the need those nations face for Western technology to modernize their economies.

There is also sentiment in Congress for the administration to go further.

Sen. Donald Riegle, D-Mich., said the administration should include the Soviet Union in the expanded trade, especially in the area of machine tools, machines used to make other machines.

″Our negotiators should send a strong signal to their Soviet counterparts that the U.S. government supports our industry’s efforts to market high quality competitive products in the Soviet Union,″ he said.

Riegle, whose state includes several leading machine tool manufacturers, said U.S. companies supply less than 0.5 percent of Soviet machine tool imports, down from 15 percent in the mid-1970s.

The administration has expressed hope that moving to normalize trade with the Soviet Union will boost the Soviet economy and provide economic support for Gorbachev’s political reforms.

U.S. officials predict two-way trade between the two countries could double or even triple over the next three years with a new agreement, although private economists doubt that assessment, given the numerous troubles plaguing the Soviet economy.

The trade treaty would be used to grant the Soviet Union ″most favored nation status,″ qualifying it for the lowest tariffs granted to any other country.

Soviet exports into the United States currently bear duties as much as 10 times higher than imports from other nations.

The higher tariffs are a result of the 1974 Jackson-Vanik amendment, which was passed by Congress in retaliation for the refusal of the Soviet government to allow Soviet Jews and other dissidents to leave the country.