22. Editorial Note
On August 1, 1972, Secretary of Commerce Peter G. Peterson concluded the talks of the U.S.–USSR Joint Commercial Commission in Moscow. In a news conference at the Embassy in Moscow, he presented a general summary of his conversations with Soviet General Secretary Leonid I. Brezhnev and of the ongoing commercial negotiations with the Soviet Union.
On the issue of U.S. credits to the Soviet Union, Peterson said that it was “clear from this visit that interest rates are viewed differently in our society and here.” He continued: “More than once during our discussions we have heard reference to the idea of ‘godly’ interest rates. I take this as a euphemism for low interest rates. Well, we know that there are many bankers who lend money who think that God is high in the heavens. And it might be argued, therefore, that there are somewhat different perceptions of what ‘godly’ interest rates mean. It is no secret that in the course of the grain agreement the Soviet Union had hoped for long-term arrangements up to 10 years and very low interest rates at 2 percent. I think that what has emerged from these sessions is growing acceptance of the basic principle that if the President decided to make any determination, it cannot be one that involves concessionary rates or concessionary procedures. He means that interest rates and terms must be the same as those offered other countries and that the procedures by which we approve credit must be the same as for other countries.”
With regard to most-favored-nation status (MFN) for the Soviet Union, Peterson said: “If we were to grant each other most-favored-nation treatment, the symmetry is obviously something less than perfect. Here, the state trade monopoly buys everything and sells everything for what are clearly reasons of its own. For that reason, what it buys, what it sells, who it buys from, who it sells to, and what it pays can obviously be subjective decisions, not market decisions. And therefore there is potential for discrimination, whether that is the intent or not.” He continued that “in a non-market economy, it means that such issues as dumping become a real possibility, whether intentional or not.” He concluded, “It is important, therefore, in building a permanent commercial relationship that we anticipate these possibilities and decide how they are to be handled.”
Turning to lend-lease, Peterson said, “I think the two governments have come somewhat closer together on the lend-lease issue.” He continued, “I think it is entirely possible that this is one of those issues that in the final analysis will have to be resolved at the highest level of both governments.” At another point, he noted, “it is very unlikely that our President will extend Exim credit until the lend-lease problem is satis[Page 61]factorily resolved. In turn, the Soviet Union does not wish to pay its lend-lease amounts until the MFN question is satisfactorily resolved.” He stated that “it would not be at all surprising if on one or two of these critical items, we will find ourselves in a situation in which decisions at the highest level of the two governments will be involved.” (Department of State Bulletin, September 11, 1972, pages 285–288)
In response to a question regarding the connection between the commercial talks and political considerations, Peterson said, “The more favorable the political environment, the more political tensions are reduced, given the kind of system we have in the United States, the more likely, I think, that the American public, the Congress, and others will support the concept of expanded trade, support the concept of expanded credit.” (Ibid., page 292) In an article published in The New York Times, reporter Hedrick Smith suggested that Peterson’s remarks “implied that Soviet help in easing tension in such areas as Vietnam would influence Washington.” (“Big Issues Block U.S.-Soviet Trade,” The New York Times, August 2, 1972, page 47)
On August 4, National Security Council Staff member Helmut Sonnenfeldt, who had accompanied Peterson to Moscow, reported his views in a memorandum to the President’s Assistant for National Security Affairs Henry A. Kissinger. Sonnenfeldt, who sent the memorandum in advance of Kissinger’s conversation with Dobrynin scheduled for later that day, wrote, “Here, again, we have press problems: the NYT stories that we are stalling to extract Vietnam help from the Soviets.
“— Tell D. [Dobrynin] that none of these stories came from us. The only thing Peterson said—as the Soviets know—was that trade is related to the political environment. This is elementary and Moscow knows this as well as we do.
“—We were not stalling in the Moscow talks. On the contrary we found the Soviets almost completely inflexible and got the impression—which Peterson mentioned to Patolichev—that the Soviets might be supposing that because of the election the President was so eager for a deal that they can afford to play a game of chicken with us.
“—Our position is that since the Soviets raised the issue of an overall trade agreement, we, too, want to go for an integrated, comprehensive deal which commands Congressional and public support. Hence, we cannot accept the Soviet Lend-Lease position and have to insist on such points as arbitration and copyright. We also have to push for adequate business facilities for U.S. firms and must protect ourselves on the anti-dumping issue. We are not trying to squeeze the Soviets and fully recognize that they have problems on these matters; but our point is that if there is to be a comprehensive approach, it must be viable and cannot leave the President exposed.[Page 62]
“—We remain very interested in joint ventures and Peterson’s tactic, on instructions, was to try to identify some deals that we can move on urgently—like platinum. Gas is so complex that it takes more time; we don’t want to get hung up on those complexities.
“—The Soviets should do careful homework and we will be ready before your trip in September to receive a senior official from Moscow to get the issues narrowed. We will also do careful homework in the meantime.” (National Archives, Nixon Presidential Materials, NSC Files, Box 495, President’s Trip Files, Dobrynin/Kissinger, Vol. 13)