WORSE AND WORSE. Now the Reagan administration has imposed sanctions against two French companies, in retaliation for the shipment of the compressors for the Soviet gas pipeline. One of the companies, Dresser France, is the subsidiary of an American manufacturer. But the other, Creusot-Loire, is owned by the French government. Here the United States comes perilously close to imposing sanctions on the government itself, a genuinely reckless expedient.
The sanctions prohibit the export of all American products and technology to those two companies. It's a strange step for an administration that came to office strongly--and correctly--emphasizing the importance to the American economy of strong export performance. It has worked vigorously to beat down foreign governments' political barriers to trade. Now, to serve political purposes of its own, it is actually forbidding American sales to Europe.
The administration angrily argues that everyone seems to have lost sight of its original purpose in embargoing the pipeline equipment--to try to force the Soviets to lift martial law in Poland. Unfortunately for the Poles, the American government's divisive and inflammatory tactics in this embargo have created a gigantic diversion from the events in Poland. As you have probably noted, things are not going well there. Solidarity has been doing some underground organizing, and the Polish military government appears to be preparing a renewed crackdown. It could hardly pick a more opportune moment than one in which the Western governments are entangled in an increasingly ugly quarrel among themslves.
As for the export sanctions, they have immensely damaging implications. They help all those protectionists abroad who are trying to keep American competition out of their countries. Whenever an American exporter moves into a sensitive market, and whenever an American bidder gets close to a valuable contract, the local producers will begin to remind their governments of this episode. Watch out for the Americans, the argument will go--they talk free markets, but they won't hesitate to use the American companies to try to whip you into line with their foreign policy.
Ask youself this question: what would the American reaction be if a French government tried to use economic pressure--through the French companies operating here, and their American partners--to threaten the United States on a point of foreign policy? That's an easy one to answer. Why should any American, including Mr. Reagan, be startled when these American tactics meet the same vehement resentment not only in France but throughout Europe? With this embargo, Mr. Reagan is simultaneously botching his policies in trade and in Poland.