The Reagan administration, signaling the Soviet Union that it is not too late for it to change its ways, said yesterday it intends to continue trade with communist countries based on their international behavior and strategic factors.
The administration's Trade Policy Committee released a quarterly report on East-West trade that is billed by administration officials as a prelude to a major East-West trade policy pronouncement scheduled for later this year. One official said the report may have had more significance in what it didn't say than in what it did.
"Politically unstable countries have no chance," the official said. But he added the report merely made a preliminary trade statement and by excluding outright harshness toward the Soviets or precluding them from trade, "It's sending a mild signal to the Russians that our mind is not closed. We're looking to evaluate their overall conduct."
The report said that since this country placed economic sanctions against the Soviets following their invasion of Afghanistan in December 1979, China has surpassed the Soviets as the United States' largest nonmarket-economy trading partner. The sanctions included a suspension of exports to the Soviets of high technology and possibly strategic materials and a grain embargo. However, the embargo has since been lifted by Reagan. Trade with the Soviets last year dropped to less than half of the 1979 level as a result of the sanctions.
"U.S. trade policy towards the nonmarket economy countries must be viewed in the context of overall bilateral relations as well as in the context of international commitments," the report said. "As such, this policy recognizes the inter-relationship among the economic, political and strategic factors shaping bilateral relations."
U.S. trade policy will differ from country to country and "will continue to be based on the concept of reciprocity and mutual benefit."
ythe report was sent to Congress yesterday as required quartrly by the Trade Act of 1974. It is the first East-West trade report of the Reagan administration.
U.S. trade with the Soviets fell from an all-time high of $4.5 billion in 1979 to $1.9 billion last year. U.S. exports declined from $3.6 billion in 1979 to $1.5 billion last year. Imports from the Soviets dropped from $873 million to $453 million.
On the other hand, trade with China jumped from $2.3 billion in 1979 to $4.9 billion last year. U.S. exports increased from $1 billion in 1979 to $2.2 billion last year. Imports of Chinese goods rose from $592.2 million in 1979 to more than $1.1 billion last year.
U.S. trade policy with Albania, Hungary, Poland, Bulgaria, the German Democratic Republic, Romania and Czechoslovakia remained unchanged last year, the report said.