Foreign Relations of the United States, 1969–1976, Volume IV, Foreign Assistance, International Development, Trade Policies, 1969–1972

350. Telegram From the Embassy in the Soviet Union to the Department of State¹

Moscow, November 25, 1971, 2010Z.

6231. Stansto 14. Dept pass White House and Commerce. Subject: Secy Stans presentation re status of talks as of November 25 at a meeting with Patolichev. Sec Stans summarized his understandings of the Soviet position to Min Patolichev as follows:

1. The Soviet want (A) credit for imports (B) MFN for exports.

2. Question of export controls is for unilateral action by the US and we are moving as rapidly as possible to reduce lists.

3. Soviets want to buy wide range of goods from US if there is credit, including (A) a long list of equipment and technology items supplied by the Ministry of Petroleum and Petrochemicals, and (B) the purchase of two to three million tons of corn a year for 5 years, as mentioned by Kosygin.

4. Soviets want US participation in financing of major projects involving (A) natural resources and (B) manufacturing plants. Natural resources could involve credit for equipment plus long-term contracts. In regard to manufacturing plants, the US would supply equipment, technology, etc., with Soviet payment in products or through credit.

5. Soviet State Committee on Science and Technology is interested in licensing arrangements to acquire US technology and in joint research on scientific and technological matters.

6. Soviet Gov’t is willing to extend credits for sales to the US on reciprocal terms.

7. The Soviets would like to have all relative elements put together in a formal economic agreement.

Sec Stans then stated the United States position as follows:

8. There is no reason for participatory investment transactions to be delayed pending government action since they involve private parties. But USG will attempt to interest US firms to do this as soon as Stans returns to Washington. After the first one or two transactions a negotiation pattern will develop that will make later transactions simpler.

9. All Soviet views presented during talks so far are closely interconnected. They all turn on non-discrimination and reciprocity. Consequently instead of the four or five working groups proposed by Kosygin Stans would propose one working group which could from time-to-time be subdivided to deal with various topics.

10. The kinds of discussion concerning science and technology would probably be quite different from trade matters. Consequently it would be desirable later to have a separate group on science and technology.

11. The Soviets should understand that some of the matters under consideration could be worked out directly between the US Commerce Dept and Soviet Foreign Trade Ministry. Others, however, require action by the President or by Congress and this will involve different time frames.

12. An important part of ultimate arrangements is to find ways in the Soviet Union to accommodate the needs of American firms for facilities such as offices, living quarters, communications and travel.

13. In time there could be a reciprocal understanding to create a Soviet bank in the US and perhaps one or more US banks in the Soviet Union to facilitate trade arrangements.

14. Other subjects to be explored from time-to-time could include reduction of travel restriction and resolution of shipping problems such as loading and unloading ships.

15. As part of the elimination of obstacles to trade it will be important to resume negotiations on Lend-Lease. This is essential step in order that US public and Congress will accept the major initiatives we want to pursue.

16. As time goes on we could discuss other cooperative matters and ways of avoiding future differences of opinion in economic matters and consider setting up means for arbitration of disputes.

17. On the basis of the foregoing points Stans intends next Tuesday to present to Patolichev letter or memo reciting above information and proposing creation at this time of a joint working group between Dept of Commerce and Soviet Ministry of Foreign Trade. This group would deal with trade and investment matters within the jurisdiction of the Secretary of Commerce. After his return to Washington Stans would consult with the President and also with other agencies on those matters that fall within their responsibilities and competence, e.g., finance/credit and MFN.

18. Stans concluded presentation by stating that the foregoing followed Kosygin’s suggestions to the extent that Stans has authority at this time while other matters would be brought up upon his return to Washington.

19. Patolichev agreed with Stans’ presentation of the Soviet position and expressed his understanding of the United States position. He said he would be pleased to accept a memorandum along these lines.

Beam

1. Source: National Archives, Nixon Presidential Materials, NSC Files, Agency Files, Box 213, Commerce Volume II 1971. Secret; Priority; Limdis. The copy of the telegram printed here incorrectly identifies it as telegram 6231; the copy in the Department of State files identifies it as telegram 8778. (Ibid., RG 59, Central Files 1970-73, POL 7 US/STANS)