Europe: Imbroglio over a Pipeline

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A transatlantic debate heats up as France and Italy defy the U.S.

"The spirit of commerce has a tendency to soften the manners of men, and to extinguish those inflammable humours which have so often kindled into war."

—Alexander Hamilton, 1787

Though spoken by one of America's founding fathers, that approving view of the benefits of commerce among rival powers seems to have few adherents in official Washington these days. Hamilton's thesis is regarded by President Reagan as a dangerous illusion that should have been shattered by the Soviet invasion of Afghanistan, Moscow's role in bringing repression to Poland and the steady build-up of the Soviet Union's nuclear arsenal. The Administration's approach has outraged Washington's European allies, who, like Hamilton, see trade as a lubricant that can ease international tensions.

The centerpiece of the U.S.-European dispute is an ambitious 3,000-mile, $10 billion pipeline through which the Soviet Union hopes to deliver up to 40 billion cubic meters of natural gas annually from its Siberian tundra, over the Urals, across the wheatfields of the Ukraine and through Czechoslovakia, all the way to the homes and factories of Western Europe. The line was scheduled to begin operating as early as 1984.

The transatlantic dispute reached a new pitch last week when France and then Italy openly defied the sanctions imposed by Washington on June 18 to prevent Western European companies from using technology acquired from the U.S. to build the pipeline. Initially, in reaction to the declaration of martial law in Poland last December, the Reagan Administration had only barred U.S. companies from supplying equipment for the Soviet project. But last month, right after his return from the Versailles summit, the President broadened the ban to include all equipment manufactured by Western European firms under license from U.S. companies. The Socialist government of President Francois Mitterrand, which has opposed the idea of sanctions from the start, ordered the state-owned engineering firm Alsthom-Atlantique to ignore the new U.S. sanctions and sell Moscow the sophisticated turbine rotors that are needed to pump the Soviet gas westward. Since the French company had acquired the right to produce these rotors under a licensing agreement from a U.S. company, General Electric, the French government was in effect telling Alsthom-Atlantique to violate the terms of the license. Said Premier Pierre Mauroy: "France cannot accept unilateral measures taken by the United States."

It was a bold departure on the part of the Mitterrand government, which since coming to office in May 1981 has studiously avoided open conflict with the Reagan Administration. Said French Foreign Minister Claude Cheysson: "We no longer speak the same language. There is a remarkable incomprehension between Europe and the U.S." A recent French decision to renew arms sales to Nicaragua, despite a quiet pledge to Washington not to do so, has been widely interpreted as a signal of growing French pique over the sanctions.