TRADE: Firming the Soviet Connection

On the flat banks of the Moscow River three miles from Red Square, workmen are excavating the site for a Soviet version of Manhattan's towering World Trade Center. Scheduled for partial completion in 1978, the $110 million complex, which is largely financed with U.S. money, will contain offices for 1,200 employees, plus 625 apartments, 600 hotel rooms, restaurants, a swimming pool, convention hall and shopping mall. All are supposed to provide aid and comfort to American and other foreign businessmen visiting or living in Moscow while doing business with the Soviets.

In the past two weeks the chances that the trade center really will attract many U.S. tenants have dramatically improved. U.S. trade with the Soviet Union has been declining this year, to an expected total of $1.1 billion, from $1.4 billion in 1973. But now breakthroughs on two key issues have increased the prospect that U.S.-Soviet trade will flourish, perhaps rising to $2 billion annually by 1980.

In early October, the White House at the last minute blocked a $500 million sale of U.S. grain to the Soviet Union. Then Washington relented and announced that it would approve a Soviet purchase of about $380 million worth, apparently in the belief that the scaled-down deal would not siphon enough grain out of the U.S. to worsen American food-price inflation.

New Deal. Even more important, President Ford and Democratic Senator Henry Jackson of Washington have agreed, with Moscow's quiet cooperation, on a deal that should clear the way for congressional passage of an omnibus U.S. trade bill (TIME, Oct. 28).

Under the agreement, the U.S. will extend to the Soviet Union and six other Communist nations in Eastern Europe* the same tariff terms that most other nations get in the U.S. market. American tariffs on imports of Soviet goods, such as linens and plywood, will be lowered from about 40% to 10% or less. But those concessions can be revoked unless the Communist countries permit freer emigration by dissident minorities, notably Soviet Jews. Moscow may let out 60,000 emigrants of all kinds each year, almost twice the current rate.

Passage of the omnibus bill should spur U.S. trade with many nations outside the Communist bloc as well. Ever since key provisions of the 1962 Trade Expansion Act expired seven years ago, the White House has lacked the authority to negotiate tariff changes. The new bill grants the President unprecedented power to raise or lower tariffs and negotiate other trade concessions. Its enactment should vitalize the round of trade-reform bargaining among scores of nations that officially began in Tokyo in September 1973 but that has been marking time until the U.S. Administration got the authority to conclude new agreements.