LETTER TO LIONEL H. OLMER FROM DIRECTOR, ECONOMIC RESEARCH RE LETTER FROM THE D

Created: 6/8/1981

OCR scan of the original document, errors are possible

CENTRAL. INTELLIGENCE AGENCY

washington. dc

nationalsscssmcnt cxjuiji

8 Ounc liOl

Tho Honorable Lionel H. Olmer

Undor Secretory for International Trade

Department of Conmcrce

net.

Dear Mr. OJmcr:

orMil iiDcria toEurope gas pipeline

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and other projects rcquJr.og earth

noes

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item..

awwved for release

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Italy Imvc byh producei r /or (lit llr.c

have nnylie lliicc l

I nrro-nin-^Irrn?: Jnpan, West Germany,TUi^'iydiameter piped

docs noi

USStt. The Umlcd Stales

'PC needed By Ihc utivr i.

hove Ihc capacity lor.xii l

he

Thendus trio)

require twof compressor types and theigh t

unitsthe heavy aircraf-t types, tfie latter for varying sizes arc available nder US license or

Soviets hove imported severe! hitndrci compressors Tn thr pest and prefer thenn other countries. Those companies usin- the fie main US mtnuf ee turcr can produce all the parti with the exception of the turbine rotor blades, which must be imported from the' United States. If the US manufacturer provided the rotor blades to its foreign licensees or subsidiaries, the Soviets would be-quick to place their order with them.

.cooperation from our

Allies,the denialof licenses for US equipment will do little to delay completion cf the fis pipeline. In those areas where the Soviets would prefer US technology ompressors,andolc equipment ihcv could go ehciiri with the project without US participation. In effect making do with accond-best teclinoiogy. Foreign licensees of US firms could vcrv well decide, despite their contractual obligations, to accept Soviet orders. Those licenseeseek competitive p< would be especially tempted to take this rood. Nor is certainly that US subsidiaries would follow the lead of me parent companyeither because of pressure from the host country or permission from the parent firm.

Sincerely,

Di rector Economic Research

Original document.

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