Seething About Trade Sanctions

Farmers, businessmen and scholars call them self-defeating

President Reagan's economic retaliation against the Soviet Union for its role in the Polish crisis is raising anew some time-worn questions. Do such sanctions work? Are they at best only symbolic? Are they perhaps misguided missiles that ultimately inflict more damage on the country imposing them than on the target nation?

Farmers are among the loudest skeptics. They fear that Reagan will go further and impose a new embargo on grain shipments, which would swell the U.S. agricultural surplus and depress farm prices and incomes. Their concern stems from their bitter experience with the embargo that President Carter declared two years ago after the Soviet invasion of Afghanistan. Says Jared Hoover, who farms 1,400 acres outside Abilene, Kans.: "I can understand suspending talks on a new agreement with Moscow. But we should have enough history under our belts to teach us a lesson. Despite Carter's embargo, the Russians got all the grain they needed. They didn't suffer as much as we did."

The current grain pact, which allows Moscow to buy up to 23 million metric tons a year, expires in September. If it is not renewed, the Soviets might suffer severe food shortages next winter. But soon they would undoubtedly line up alternate grain suppliers as they did during the last embargo. That might have a lasting negative impact on U.S. farm exports. Says John Dunbar, Dean of Agriculture at Kansas State University: "Argentina, Brazil, Canada and Australia would all like long-term deals with Moscow. If we are perceived as an unreliable supplier, a lot of our former business with the Soviets could go elsewhere permanently." Adds Clifton Luttrell, chief agricultural economist at the Federal Reserve Bank of St. Louis: "There's no doubt that an embargo would hurt us more than it would them."

Reagan's ban on high-technology exports to the Soviets will have virtually no effect unless similar actions are taken by America's allies. The Soviet Union imports no more than 3% of its machinery, computers and other sophisticated equipment from the U.S., but relies heavily on Western Europe and Japan. At a meeting last week, the foreign ministers of the ten European Community nations agreed to a promise that their countries would not take actions to undermine the U.S. sanctions. But they adopted no sanctions of their own. Next week, the Coordinating Committee on Export Controls (CoCom), through which the Western nations and Japan fashion agreements on high-technology transfers to Communist countries, will hold a secret session in Paris to consider a unified stand on trade restrictions.

American companies doubt that the U.S. will receive full backing from its allies. Caterpillar Tractor Co., which is losing an $80 million contract to supply the Soviets with 200 pipelaying machines for their planned natural gas pipeline from Siberia to West Germany, expects a Japanese company to fill that order. Fumes a Caterpillar executive: "Reagan's not denying pipelayers to Moscow, only our pipelayers."