World Trade: The Buddying Up of Japan & Russia

Though they have been at loggerheads since the 18905, Japan and Russia have one sentiment in common these days: a fear of being squeezed out of Western European trade by the Common Market.

The result has been to step up their interest in trading with each other. So far this year, six Soviet industrial missions have toured Japan, titillating their hosts with grand talk of buying Japanese industrial equipment for use in developing Siberia.

Last week something more tangible was brought back to Japan from Moscow by a delegation of 17 Japanese business leaders, led by aggressive Yoshinari Kawai, 76, president of the Komatsu heavy equipment works, and including Kaneo Niwa, chairman of the giant Mitsubishi shipbuilding company.

In a bargain that will take effect as soon as the Japanese government gives formal approval, the Russians contracted to buy from Japanese shipyards a small armada of 45 freighters, tankers, floating cranes, barges and dredges—in all, some 480,000 tons of shipping. The $96 million deal guarantees that Japan will hold its position as the world's biggest shipbuilder for the eighth straight year. Even more enticing were some future prospects held out to the Japanese delegation in Moscow. The Soviets professed a desire to buy big amounts of Japanese steel, tubing and mining equipment. Playing on Japanese worries that the U.S. will impose ever harsher quotas on Japanese textiles, Moscow also talked of importing $500 million worth of Japanese cotton goods.

Rosy-hued as all this seemed, some Japanese businessmen were skeptical. The Russians are generally reluctant to pay for imports in cash, prefer instead to swap off such raw materials as oil, coal and metals. At the moment. Japanese industry is overstocked with raw materials. And Japanese businessmen have not yet forgotten the disappointing results of their nation's last trade treaty with Russia. After signing the agreement with much fanfare two years ago, the Soviets began to shovel their own products into Japan as fast as possible while delaying acceptance of Japanese goods by endless haggling over prices and terms of payment.