PROSPECTS AND IMPLICATIONS FOR SOVIET BLOC TRADE WITH INDUSTRIAL WEST ( S-1453

Created: 3/1/1965

OCR scan of the original document, errors are possible

prospers Aim tmpvicatioss Foas^viEif K'.oo naas too? tie ams&iftt wstv?

itenUacen, yesterday we looktd at thst-West trad* ae it nss developed up to tba present, titce. 6 uoroing we vant to project the probable path of thla trade accra ten years aheed-First, let's consider proepects for Soviet trade withdustrlfci Vest.

X't scene reasonable to aEeuae that Soviet "rade withWest over tbe next ton years willate ofoear. It lsthat this trade will grow core a'.owly thaDis projected o'o l<ercent. It is

also unlikelyumber of reasona that the annual mte of increase achieved8t) will be eustained over tbe next five or ten years. 1. First, the forced pace of this trade was cade possible by resorting to gold soles in excesn of current pro-dVKtloo. Clearly there isHolt or. hew fur reserves crci be drawn od, aod We believe that ihey are now close to this limit for noraal commercial transactions. P. second factor ir thla rapidws the nvolJ.-ab:!lity of BediiJB-Vsrj credits, "hi vert- first

o/.tended9 and whichevel of about SJOOear betv.-erIj. b,repayments .'uci at cut offsetredits anda available, so the' this Btinulue to increased trade has virtually run ltt course. 3- Furthsrnorc, thetartedear oi* recession and endedear of general prosperity In the Western vorld. ^ncreooingly buoyant Western markets brought higher prices for the growing voluse of Soviet exports, thus facilitating the USSfl'e drive to increase its export At- additional consideration, which is difficult to aeeeesj is the apparent reluctance of the new Soviet leaders to incur more foreign debt than they judge tbe Soviet economy can handle- In contrast to the more ebullient attitude of the Khrushchev regime, the present leaders sees to be returning to theconservative attitude tovardinancing, 'fa* prospects for Soviet exportP of parfcicdar ccfaffloditiearv nixed. inood on past experience and current Soviet plane, li. appears that the traditional "Tsarlet puekege" of exports, Will be the mojor groi-th categories over th- next five or toe years, except fnr grain,the iongrr-taro proepects leea *

ScYiel. exports of petrolein products to tlie Industrial Westn the order00 Milton annually Pipelines tiuu in advanced stage of production point tointentions to expand such exporto. oriet oil exports to the Went reached an estlattted valueillion, and are expected toercentercent annually-

Currently the Russians are engaged in expanding their production, marketing and port facililies for vood and wood products, which together accounted for more thanercent of Soviet sales to the West Wood products of high unit value ore growing In importance.

ita: USSR Is also Increasing Its coal and coke-handling facllltleene Baltic, andutting its prices of these products in order toarger share of Western Europe's market. These exports currently amountercer'- of tbe CSSR'a Western export trade.

t- Otaer growth exports appear to Includehicfc dov accou't forereent of malms to the Hast but for wilch the USSR hen recently beguu to hold threeear; and petals, (currently accounting far nearlypercent of exports to then vtlch tre

. comsiderabltlty- Finally, It isehtT Soviet, gold prod rrtlor will grow by PHtWpa

a third betv-een nowhen it lg likely'lllot. Froda^Urabe locny.eed

by aaill tot0hwr prodjctcsusccptUle to expansion. Menufrtctunid consumer goods,2 million) of th* Russian's sales to the west, suffer from poor styling and inadequate finishing;oubling of such exports would not he or significance. Other "nlaw -cub" exports, chiefly chealcals und vegetable fibers, Bight veil Increase, but not enough to give then Eceh OOrO uelgbl than their currentercent of Soviet exports to the West. Of machinery exportu, earrently Lessillion (ofaptive Finnish market takes by for tbehe best prospicts appear to He with the general purpose Soriet nachlne tools. Even here, thereimited futurearket that prefore special purpose0 percent grouth rate for .Soviet trade with the industrial West Eiiioei that the growth of. this trade will be significantly moderated over the next tenerhaps only half as rapid as theercent rat*eriod, fbe totAi volume ofporto froa ttt- west, is not likely tr. of footed by *

loosening or 'JesteroStrade controls, since

lbo fundaioeotvil restriction on the size of imports is tbe

iii'itecl Soviet jbillty to payhat Ik, its limited

capacfty to export to ton West. At the moment ve see no

hat any .najor effort will be made ln the USSB to

develop ecu export industries during tbis period and, as

already noted, prospects ere dim for any sharp increases in

traditional exports.

E. 9he apresd ofoercent annual growth would chou tbe

following relationship to world trade end tbe Soviet gross

rational product by

Soviet

from the

0 0

11. For tbe USA

fc. 'if there is no change in US trade policy toward theoc, the US chare of Bloc trade with the West chould remain about the same ae it is nowthat is,, percent,it might decline slightly. While the level of th? >loc'r, total purchases from the industrial Hunt istined primarily by itG ability to pay for them, the particular portion of its total purcha^ea dinetea tovurd the 'OS is tetcniined by its needs tor specific technology, ver Vo^tem Europe?n our ability

1

to pxovideembodying more sophisticated technology; thla advantage should ensure the US of Its present small chare of the Sloe's Western trade, evea ia the faceoftening Went European trade policy toward the Blocarger quotac for Bloc products).

3- If tbe US ronovrd all restrictions, except those on direct military support goods, our exports to the USSB might then growf someercent of total Soviet-industrialtrade; that is, to0 million tomillion00 million aie ia about the chare which ihc US now has of the machinery imports of seatern Eurojie and Japan together, lbs US share of the European Satellites' Western trade would probably bekeercent, or about equal to US share of tho imports of SFCA less the UK. This would mean US exports to Eastern Europe of0 million0 and moreOO Dill (on fi, compared7 millionf wblch sc-.ne> Sltfiepresentedh1 paints to fov teste rn iJurojje

A. .urrsuUy the Js&et European countrlea are in the process of overhauling tfcjir economies. One of their goals isports of morr- woforn tettnology andheiroaitioD iporr^trice ofonal trade to

iholr total economicentioned tr. yesterdaysdGM ItadaUiry for then to Incorporaterade ia any schemes for economic reform. Tbe crucial qpsstloD le to what erteit tbey will be able to increase tbe acceptability of their goods ln Western markets; but Intimately associatedhis question Is the problem of attempting to reduce their dependence on Soviet markets and nu Soviet raw oaterials, wblch account forf their total raw material Imports. 1. Currently the Czechs, Kungarlano, end others are ot-

tecipting to modernize the design, to improve the quality, and in general, to Increase the "marketability- of their products la tbe Vest.- 3ie Satellites, led oy Rumania, have at the same tinesuccessful in blockingcheme to Invest the Moscow-directed East European Council for Mutusl Economic Asslntance with Supra-national authority over the economies o* Eaoicra Europe. his show oftoward HoSOOV and tovard CEMA suggests thai, tijiy planslosir linking of Soviet Sloe economies In the future vlll beelective, national interest feaaie.

Indeed, tbe aouatlrjr oeoccetlcn Easternd f'n* progressive UsdBattloB of Soviet control evident

ad th*ee nations la recante sumo Wed. ior solutions to thelj ii-oncEli: prc-bM^'i. Scoliotic reformsext ten ys-are say eej; ore rational calculation of economic advantage in -lev industrial inveataient and the infcrcd-.iction ofestern technologies. These reforms might ever?s dismantling of high-cost industries. Although the desire for additional trade with tha West is gsreral lu Eastern Europe, tho re-orientation of notional economieslow aod uncertain process.

Over th*ears, Eastern Europe's trade vitb the industrial West has grown at roughly the same rate as Etttt European industrial production; while total Satellite trade haa groanomewhat faster rate. If tbe Satellites continue the trend toward directing their tradfl In closer accord with their own national interest, theshare oj' this trade may gale at theSijuoist Sloe's shire; aod the Western shew tigbi: then grow slightly faster than Industrial Insomuch us iunt European industrial output larow byr the next ten ysare, ESteliite imports fXdl Ul9 ifca. night bse*jv, or to

leant wfleai) tonocaen eaair'-ec achieveturs of theirlGN, then thav of tbe Westabout tfbi eras Alchough to feelhlftF ncae countries- such aa fflMllla. cenIn the Westerne

fberer o? Eastern Europe'she0 yeara willvary difficult in view of the unfavorable economic structure with -hich Eastern Europe'e leaders have to contend-

'ttatr.rfcB or. Cuba.China

L'hlle beyond tba terms of reference for thisew

words onwith Cuba, and Communist Cnlna any be useful.

a. aaoval of IC restrictions on trade vith the Soviethave co rcjasurable inpact on the Western trade ofCfcina. The trade of the US with bothi stent, bacouse of theuch trade- Wei tan: eo.vo triesS views tivc aalntalnrd restrictions in the facetend trade with the Scrtet 3ioc. Ocly those whoonvllUnf:strift trad? to China and> otrto excise their trod;-

villicr.

1. Cuba's trade with the Industrial ucp' eaouuted to only 'iQfuepercent of the total, and probably will decline again5 (due to *ne decline- ln sugar e lo- Western share of this trade isroduct of Cuban initiative andKcbnnge assets ratherunitive action by Western countries other than- Ccununlst China's trade vltb the Industrial West grew by aboutearb, as the Chli.esc shifted an ever larger chare of their trade fron, the Soviet bloc to tbe West. Trade with Japan doubled3* (toirllllon) and trade with Western Europe grew toill Ion. Since China has been forced to tum Increasingly to tho Free World "or grain to feed Its people, the share cf machinery in Its total imports from the West has been quite small. 'Inless China is able to overcome its agricultural difficulties, or to effectively licii lhe growth of ito population, it seemb Ilaely tha: Increased Imports from -be West vlll continue to be largwiy foodstuffs.

10

L.

na to as tvnxz mod

CIA FflSTORICAL REVIEW PROGRAM

tfentleuen, with tie beei;ground of .Mr. freilse^re^

policy let inetwo pointG at tbe outset: (a) USpolicies are not the principal reason for thelevel of the postwar trade of tbe USSR and Easternthe industrial West; and (b) tlie impact of East-Westthe aggregate economic activity end on the militaryof these Cosnunlet countries has been relativelythese generalizations let's examine the principalof East-Weat trade, and the Impact of thia trade on the of the USSR and laatcro

A. The principal deterrent to the growth of Bloc trade vith the Wool has been the failure of the Couaunist nations to develop sufficient exports for Free World markets. Thisubject uT some importance on which more will be said in the discussion of trade expansion tomorrow. *. econd deterrent io this commerce has been tbo Soviet policy in Easiorn Europe which during the postwar years eougbt toasically self-sufficient. Moscow-

* For convenience, the temt "West" and "industrial West" are used interchangeably ir. this presentation to include the co-entries of nor.-Oooatunlst Europe, Berth America, Australia, and oaten. Similarly,rn Surore" and "European Satellites'- include ^lechoslovakla,the Off', Poland, fcjnania, and Bulgaria, while th?loe iDOlofiea these countries Blue the Soviet Union.

oriented Bloc insulated apilcst Western economic influence.

Under Stalin's programs priority was given to the development of those industries ln Eastern Europe vhicb would meet the urgent Deeds of the Soviet market- At the some time, the expansion of Satellite indue try became more dependent on large imports of Soviet industrial raw materials.

A second feature of the Stalinist programenerally "balanced* investment pattern applicable to all East European countrlea, vith little regard to differences in their resources. This policyinto thes. The result uas an abnormal degree of parallelism and high-coat production among East European industries,urther growth ln their dependence on the Soviet market.

largelyesult of these policies, the trade of the Soviet Bloc nations with the rest of the Communist world grew rapidly so that,he year of Stalin's deathit accounted forercent of Eastern Europe's trade ond nearlyercent of tho USSR's.

k. Within the past ten years, however, political leadero

within the USSR and Eastern Europe have begun totbe excessive cost incurred in the Implementation

of Stalin's cconoalc policy. Increasingly they have sought to expand trade Kith the Heat a* one aeons of alleviating perei&tent vecncnlc -'I s at hoae.onsequence, sinceC's both thend the Satellite area have scored 'apressivi; qkIde in their trade with tbe West, although this trade tas not grown nearly ao much as they had hoped, i'he largest single obstacleone vhlch all the donor Jet countries face ln cceraoois their limited export capability ln the West- in brief, tbey have been hoist by the petard of their earlier trade andpolicies, vhlch neglected the possibilities for successfully competing inrkcts. In recent years Soviet Sloecspecially those of Eastern Europehave been searching for vaya to ovarcome this legacy. The naasurcs adopted so far, however, have not seriously affected the basic flow of goods between the OSSR and tbe Eatt European Code unlet countries. etill remains fundamentally intact, although there are signs of change. Soviet efforts2 to secure greater dominance over the economies of Eastern Europe were rebuffed,eu hesitaut. rtcps have been takftfl in some Satellite countries to limit the central planners*

iafiuencs on trade, and to loosen the trade tiesimber of she Communist: countries* cor the Soviet. Onion, imports historlc&liy have teen small in relation to total economic activity. She growth of Soviet trade with the industrial West, io particular, has been Inhibited by the long-standing Stalinlct policy of attempting to insulate the Soviet economy free Western influence. While it is true that the highly defensive, and generally autarkic trade policies of the Stalin period were overtaken by Khrushchev's more aggressive cosanercial policy toward the West, these sane factors continue to restrict the expansion of this trade.

1. Generally speaking, most industrial countries conduct the bulk of their trade with other industrial nations (the share of Western Industrial nations ia the US trade, for exeople. Is more thanowever, the USSU, the world's second largest industrial power, conducts lens thanercent of Its trade with the industrial Vfest.

Essentially the Soviet leadersn Stalin's tine, to look upon trade with tbe Westay to acquire the specific types of advanced technology that would be LTjst helpjfbl in meeting ciirreat planninghis policy Injectn an element of instability lu Soviet

orders, which ceor run heavily to ship* one year, aand to choral mlthe next. Similarly, there Is Haa discontinuity In Soviet txports, vhich are considered to haw no role exceptwans of paying for imports. For example, the .JSSR eroergedarge tin exporter, ita sales amounting to0 tono during this two-year period;owever, Soviet offerings were nil, and during the past two years tha USSR was an Importer ofear. In short, the Western practice of seeking permanent, stable, and expending tradegenerally has not been adopted by Soviet trade planners.

IXispite the limitedf its trade policy, tha USSR has increaocd Its trade with the industrial West an average ofear8ertainly the ultimate futility of continuing to expand trade through annual exports of geld lu aoountegold production Is clearly recognized by the Soviet leadership.

It Is conceivable that, tb* current Soviet experiments io granting greater auwnooiy to the plant aauragers may suggest the need for some significant changes ir. tho

conduct of foreign trade. Thus far the signals are

very faint indeed. D- For the Eastern European countries trade vith the West aseumes more importance than it does for the USSR. Like the Soviet Union, these countries conduct someercent of their trade vith other Communist countrlea, aod only aboutercent of their trade ia carried on vith the Industrial Vest. Unlike Soviet trade, however. Satellite importsike those of other small Industrialre generally of much greater importance in total economic activity, amounting to perhapsercent of GNP in tbe case of several of thebo countries.

Tbe importance of Western tradereat deal among the Satellite countries. Less thanercent of Bulgaria's trade is directed toward the industrial West, while this area accounts foruarter of tbe trade of Poland, Rumania and Hungary.

By far the largest shareore thanercentof Eastern Europe'a trade with tbe industrial West isfor by Western Europe. The share of the United States is lessercent.

3- The desire of Satellite leaders to expand their Western trade more rapidly has, for the reasons alreadybeen thwartedhortage of suitable exports-

6

Therefore, although the rxncvul of "JS trade controls eight veil increase the XJB share of Satellite trade with the Wast, the payments problem would still remain,ota^ Satellite Imports from ths West would not Deceseariiy rise. thsr words, removal of controls would raise the US tha re of this trade at the expense of Western Europe. k. As Indicated earlier, scans of the Satellite leaders have recently decidedumber of measures which may ultimately resultreater export capacity to the West- These include the reform of foreign trade management and steps to loosen somewhat the trade bonds to one another and to the USSR. At the moment it is too early to judge ubere these and similar measures will lead. The impact of Wentern, indeed of all international, trade on the economies of thec is small in the aggregate snd difficult to quantify ln any event. Soviet Importsercerro of industrial production and aboutpercent of CSV,ports from tbe west represent less then one percent of either industrial production or of GRP. East Europeanf ol* greaterjocrtauce; imports ere tdrjoGt JO psreent of Industrie! production and sceieerc-sliaportn froa the tfesi amount to

ercent of Indus trial production, andercent of OTP. importunes of this trade to epecSflc industrial sectors aod to Soriet aloe technology le, of course, greater, ond i&are appropriate ecaBure cf the la poet of this trade-

1. However, own the significance of equipment imports from tbe Uost should not be overstated: tho USSR, for example, produces perhaps as much as $'j0 billion ofear; from the East European countries It acquires almost anotherillion; and from the Industrial West it buyssxsswuat morealf billion.

nevertheless, imports sometlsue have an Important bearing on the growth aad technological development of particular sectors of the Soviet economy. Over the lost three years, for example, the USSR Imported almostpercent of the annual Increment to chemicalinventory. Almost one-fourth of this annual increment cant from the Went. An even larger shore of equipment for the synthetic fiber industry was Imported. The itet effect of these Imports, moreover, was greatT than tbe ratios itidlcnte, because imports from the Wart consisted aJnost wholly of more sophisticated aid advanced equivocal and lechnology

than that irodueed hy the Soviets. 3- The Soviet oaritlci- fleet Is another entity highly dependent upon inports. Of total additions tc the fleet in recent years, aboutercent vere imports, of vhlch leas than one-hair came frar Wectern yards. Large vessels vere the principal Western contribution. *. The USSR end Eastern Europe still depend to aextent on non-CasMuniet sources for tbe supply of curtain industrial raw materiela. Bet imports (imports minus exports) account for about Uo percent of the annual Soviet supply of rubber. upply ofons,e exported (or re-exported) to Eastern Europe. In its recent currant and long-range plana the USSRharp reduction in ite dependence on rubber imports, but these plans have turned out to be highly unrealistic. Copper remains nearce, but Soviet not imports are oou lessercent of the estimated total supply. The Russians, nevertheless, continue to export (or re-export) more0 tone to Eustern Europe annually. 5- The USSR purchases leasercent of Ita total imports of petrolcuff equips snt from tho West, "maniaubslantlal share at Sovietof this equipment. Tsports of refinery

a

I.

equipment, almost all of vhlch ccoe from tho European Satellites, are equal to comeercent of domestic output, fere again tmportr rruntreater worth than their value suggests, because they represent in large partphisticated technology and equipment.

Eastern European Inporta of metal working tools and machir.ery constitute aboutercent of total donestic output. Most of the trade is conducted emong Communist countries, of which the northern Satellites are net exportern. laportB from the Host are somepercent of total Imports. The industrial West ouppl leaerceni. of the to vailable machinery supply in East Germany and Czechoslovakia, and ao muchercent of the supply Id Rumania. Imports from the Vest, howevur, consist almost wholly of new equipment and advancedew steal rolling and finishing ecuipsient, new petrole-ia refining and chemical proc^sc equipment.

Tbe cubstantinl quantities of rolled utoci products imported by the Satellites are equal to almostercent of total consumption cf these products in Baetern Europe. Tbe industrial West bus supplied

a decreasing share of thisupply (about 7

j.o

percent presently) although Western exports continue to lacreaae appreciably each year. 8. Ibt acqulsttioa of Western equipmeat and technology thus is ioooriait ln the modernization of particular sectors of tho Bloc economies. It enables the USSR tad the Bust European countries to develop new capacity and to start up new production muchn cone cases years earlierthan otherwise would have been possible. Even thocgh this support has grown in recent yenre, it has been entirely inadeq^ete to prevent the recent decline in Soviet Bloc economic growth.

9- In brief auomwry, we can make the followingabout the level and impact of Western trade with the European Ccocunlet countries:

a- By moat aeaaurea this trade ls small and its size has teen restricted primarily by Uie limited capabilities of tlie Camaunlst countries to export "to the industrial West andattern, of trade which has boon artificially structured to promote trade with the Bast and to restrict trade with the West.

t- Xn recant years economic difficulties in both

Santera Europe and tbe uSSS, aiul pressures within

11

Eastern Europe for greater independence fron) Moscow, nave increaeed the desires for trade with the Went. Since the It tovbls trade has chovn elgnlficant gains; hovevt-r, theee gains have been supported by exports of gold ond by new credits fron they measures that hold little promise for the future. The pace of future trade expansion will binge largely on Cocra unlet efforts to substantially build up those export Industries with prospects of sales in hard currency areas.

For the USSR the economichis trade in aggregative terms haa been relatively noa.ll. It bos not had an important effect on either economic or industrial growth. Undoubtedly, certain sectors of the economy, such as the synthetic fiber Industry, have made technological gains nore quickly and have achieved production levels sooner than would have been possible without Wcctem Imports-Sbr Fai!tern Europe this trade assumes somewhat more Importance in the aggregate and has addedto industrial capacity .In several of these countrieE-

II. There have been very few cubes Id which tho Russians have obtained Western productslbuting directly to Soviet military Vte purchase of tbe British Bene engine7ase ln point. In general, however, trade with tbe Industrial West ban contributed to the Soviet defense program largely by easing the demand for research and development resources In the non-military sectors of tbe economy.

A. When the Soviets obtain technology and modern indastriol

equipment froo the Westost less than the cost of producing the Item domestically there is ofaving In both time and money- This essentiallyaving in scientific and engineering resources which the Soviets could then assign to other priority purposes. This Is true whether tho Import is modern Industrial equipment

or agricultural commodities.

In recent years the Soviet leaders have had increasing problems with tbe allocation of resources. Risingfor space and advanced weapons programs have deprived tht' non-military sectors of the economy of investment funds andf the best scientlav,s, engineers, technicians, equipment and materials. This baorincipal, if not tht principal, cause of tbe declining rates of Sovietgrowtha decline which probably has been moderated slightly by imports of modern We&tern equipment and technology.

The question her* Is the extent to which these imports facilitated thu diversion of hlrh quality resources to ailitery programa. To put it differently, what would have been the in pact on Soviet military programs if there had been no Imports of Western equipment and technology? We Judge the lopuct would have been ggo.ll. Insofar as there were increased shortages of reacorces due to the absence of this trade it ia likely that military programs would have been tbe lact to suffer; whereas the civilian sector would have been assigned even fever resources ond would haveomewhat slower pace of growth ond

a. It is significant that during theO'bl when

Western nationsubstantial degree of harmony in trade control policyUSSB vac able, assisted by effective military nod Industrial espionage, toilitary establishment oecond onlyt of the US; and during thehen rigid controls remained on cilit&ry items and on items judged cf importance to ad-vanced weapsut, systems the Soviets made treswadous stridesariety of missile and space propramn. We assumescic^iagprospective impact of Western trade on the IViSR and Sisters Europe thai the export of -lestem weapons and related control ir/axtaa, including the specialised

.Tflchloery for -heir manufacture, ia not permitted. Ihere-fcre, tho principal Question ls the impact of the denial oftemc on Soviet defense capabilitlen. In the field of advanced weapons:

1. the USSR began tenting and production for inventory of both nuclear and then thermonuclear weapons during the period of broadest application of trade /lthoufdi trade controls had little effect on this program, successful Soviet espionage activities enabled the USSR to acquire oxtensive knowledge of WeBtern nuclear technology that was particularly valuable diirlng the Initial stages of Soviet nuclear de velopnent.

a* Fad the Russians had access through trade to non-military technology ln chemicale and chemical equijneot, they might have been able to reduce the cost of producing fissionable materials andases tc advance tbe oatc when these materials became available. Such access, however, would not have altered total weapons production by more;raction. d. Theundertook developaent, productiontb MRSSI-IRH* andUsiles in close time pinrirg wlta, or In advance of, similar programs In tho

a- Acci'Di to certain non-nilltary US electronicmetallurgical products, und their technology probably would have had little impact on the military effectiveness of these missiles, or on the rates of their production or deployment.

access to Western industrial technology wouldfor greater effectiveness in certain In general, such access would have had aupon conventional ground weapons systems.

1. Western electronic equipment and metallurgy would have reduced tbe weight and improved the kill factors and other performance characteristics of Soviet military aircraft. It would have hod some effect on numbers because of an improved ability to perform their basic mioelon, and on the period of service-life before overhaul or replacement wae required (aircraft gas turbines, for example).

vent, based on our long experience lnsupport to the VIS trade controls program,that the potential military gal" to be hadWestein exports can be Judged only on acase basis; and. that Judgment it possibly onlyclosely related to military applications. In Gone

16

instancesOCON co-jntries* have shipped non-mllltary itiscs which, Lc oar Judgnent, have provided assistance to fcloc military programs; but such instances have been relatively fe'< in number, and in the aggregate they have not signincnntly affected the Soviet's overall military capability.

F. The important point here io that over the past decadoR has deaonctrated its capability to develop and produce advanced veupons and space systems. Freer industrial trade with the West might have reduced the costs and perhapsthe effectiveness of come of these systems, but the fact remains that the USER now has on established, effectivefor the development and production of suchacc relatively Independent of the type of Western technology which could have been acquired through trade with tbe West.

or to* Coordinating Coni&itteu, is an informal voluntary orr;:RtzAUon embracing ell (fee Gen industrial countries and Japan er.AtiiBbedo prevent tee shipment of strategic goods to Comnuniot cr.sn.tr lsn.

17

Original document.

Comment about this article or add new information about this topic:

CAPTCHA