The Carter administration, which made severe restrictions on Soviet trade the centerpiece of its post-Afghanistan policy, has just cleared the way for one of the biggest Soviet-American deal ever.
The Caterpillar Tractor Co., under a license the administration approved on Friday without fanfare, could end up selling Russia $1 billion in equipment for laying a natural gas pipeline from Siberia to Western Europe.
President-elect Ronald Reagan, who has assailed President Carter for imposing only a selective trade embargo on the Soviet Union after it invaded Afghanistan, may well take a dim view of the Caterpillar negotiations. The main pipeline would run from gas fields in Eastern Siberia to Western Europe, easing the dependence of North Atlantic Treaty Organization allies there on Middle East oil. The line would branch out from West Germany to other NATO countries.
To the distress of some U.S. military leaders, the Russia-to-NATO pipelines would constitute pressure points Moscow could push for advantage in any East-West crisis.
On Friday, the Carter administration notified Caterpillar that it was licensed to try to sell the Soviet Union machinery for laying pipe. If the Soviets sign a sales agreement, State Department officials said yesterday, Caterpillar can export the equipment under the same license.
A State Department official who participated in the Caterpillar review said the administration decided to "validate" the company's export license because the sale would not violate the post-Afghanistan sanctions; would not give the Soviet Union anything it could not buy from other nations, with Japan one competitor, and was not considered high technology equipment of any direct military value.
On the strength of the administration's go-ahead, Soviet officials flew to the Caterpillar headquarters in Peoria, Ill., yesterday to look at the equipment and discuss the possible sale.
"This could be a major sale," Richard Kahler, Caterpillar's Washington manager of governmental affairs, said in an interview. He said of all goes well the Soviets would buy about $1 billion in pipe-laying and earth-moving equipment over five years.
Initial negotiations will be over 200 pipe-laying machines for the Siberia-to-Western Europe line, according to State Department officials. This first part of the potential deal would bring about $80 million to Caterpillar.
Caterpillar figures the full $1 billion sale to the Soviet Union would mean 2,000 jobs for each of the five years.
State Department officials said the White House National Security Council and the Commerce Department were among the government agencies which assessed whether the Caterpillar equipment would violate any of the various export strictures. Asked if Carter himself made the decision, a State official would say only: "You can assume it was reviewed at a very high level."
Pipe-laying equipment was not among the exports embargoed after the Soviet invasion of Afghanistan, State said. But the Caterpillar request had to pass muster under the Export Administration Act of 1979. Congress, as part of the aftermath of the controversy over the Carter adminstration letting Dresser Industries of Dallas sell sophisticated oil drilling equipment to the Soviet Union, said pipe-laying equipment should not be exported without reviewing the foreign policy implications.
In a related development, West German Finance Minister Hans Matthoefer said in Bonn yesterday that his government was considering underwriting a huge loan to the Soviet Union by a consortium of German banks to finance construction of the Siberia-to-Europe pipeline.
The West German press reported the loan may be as big as $5.4 billion to be repaid in gas deliveries. Up to one-third of Germany's natural gas would come from the Soviet Union once the 3,100-mile pipeline was in place, along with branches to other European countries, according to the German magazine, Der Spiegel.