The Reagan administration, as part of its new East-West trade policy, plans to further restrict exports of military-related technology while expanding sales of nonstrategic goods to the Soviet Union..
High-ranking government officials strongly suggested the thrust of the administration's new policy -- which still is under review -- during a hearing of the Senate Foreign Relations subcommittee on international economic policy.
"If the Soviets act responsibly and with restraint in the international arena, we are prepared to continue and expand our trade in nonstrategic areas on the basis of mutual advantage,"said Myer Rashish, undersecretary of State for economic afairs. "While it is the Reagan administration's goal to reduce foreign policy trade controls, we are not prepared to forswear the use of these controls as part of an overall response to future Soviet aggressive action."
The administration plans to consult allies on trade controls and to monitor the Soviets' overall behavior in making U.S. trade decisions, government officials testified.
The administration will continue to deny equipment and technology to the East Bloc countries that would contribute to Communist war-making capabilities, but hopes at the same time to use trade to "encourage evolutionary change" by the Communist satellites toward "increased assertion of national self-interest and greater respect for the rights of individual citizens," one official said.
Very tight controls will remain on trade with Cuba, Vietnam, North Korea and Kampuchea. Although trade policy toward those countries will be reviewed, "Any liberalization of these controls is unlikely," Rashish said.
Lawrence J. Brady, assistant secretary of commerce for trade administration, warned that Western nations must avoid economic dependence on the Communists, for instance, in oil and gas imports. While U.S. trade policies will take into account the interests of U.S. businesses, "Security concerns must be paramount," Brady said.
The Soviets benefited greatly from access to Western technology during the detente of the 1970s, Brady said. Even today, "Soviet planners anticipate that imports will play an essential role in the success of their 11th five-year program which began this year," he added.
"Our feeling is, based on the policy review, that we may have to tighten strategic trade controls on goods and technology which can upgrade Soviet production in areas relevant to their military strength," Brady said. "In my view, we must place greater focus on controlling the technology and process know-how which the Soviet Union is anxious to acquire for expanding their military-industrial capabilities."