A key member of the Business Roundtable says that if the United States doesn't modify its position going into the Williamsburg economic summit next week, it risks continuing a policy of "shooting ourselves in the foot" when imposing trade sanctions on the Soviet Union.
Caterpillar Tractor Co. Chairman Lee L. Morgan, who heads the Business Roundtable's task force on international trade and investment, says that the Reagan administration's policy of punishing the Soviet Union by placing embargos on shipments of some products to the Soviets, as it did in the case of equipment to be used to build the European gas pipeline, "would have been a very, very effective answer--in the 1950s. But in the 1980s, it is just not going to be an effective answer at all.
"It's a somewhat archaic notion that the U.S. really is in a position by its actions alone to put economic pressure on another country by denying the export of goods or services to that country," Morgan said. "If they don't try to convince the other members of this economic summit that they should support the U.S. action . . . we'll have virtually the situation that we had on the Russian pipeline--that is, the U.S. restraining its companies, and to the extent that there is a foreign equivalent product available in any one of the other countries, shooting ourselves in the foot."
Morgan will lay out the Roundtable's position on summit issues in a speech to be delivered today before the Chicago Council on Foreign Relations, a group that includes many prominent Midwestern business leaders.
"We shouldn't jeopardize the strength of the U.S. export community with economic gestures that our allies won't support and that the Soviets will respond to by turning elsewhere for comparable goods," Morgan plans to say in his speech.
"An important sign American businessmen will be looking for is not only what President Reagan does at Williamsburg, but also what he does overall to encourage trade," Morgan says in the prepared text. "The approach the administration takes in the present debate about revision of the Export Administration Act will be an important indicator."
In an interview at the company's headquarters here, Morgan said the administration's position on the Export Administration Act continues existing policies and undermines the U.S. negotiating position with its allies on trade issues. The Business Roundtable supports something similar to the Export Administration Act proposal by Rep. Don L. Bonker (D-Wash.), which places more emphasis on trade than on embargoes.
"One of the requirements we suggest is consultation with business," Morgan said. "Hell's bells, in a day's time, on most of these embargoed commodities, somebody in the Commerce Department could pick up the telephone and call four or five companies."
Morgan has more than a passing interest in U.S. policy on embargoes. Caterpiller lost a $90 million contract to sell pipelayers to the Soviet Union under the pipeline embargo--a contract that was assumed by its arch-competitor, Japan's Komatsu.
"Instead of our having 85 percent of the business, now Komatsu has 85 percent of the business, and we have lost hundreds of millions of dollars worth of business and we have lost thousands of jobs at U.S. plants," he said.