WASHINGTON, MOSCOW SEEK TRADE TIES

The U.S. is trying to establish official pathways for energy trade, research, and statistical ties with the Soviet Union. Deputy Energy Sec. Henson Moore says the U.S. Department of Energy is developing a major energy export initiative. It has compiled a list of petroleum technology and equipment the Soviets need and all the possible sources of supply. "Virtually without exception, the U.S. could meet every Soviet need with state of the art equipment and technology, but so could other

April 2, 1990

3 min read

The U.S. is trying to establish official pathways for energy trade, research, and statistical ties with the Soviet Union.

Deputy Energy Sec. Henson Moore says the U.S. Department of Energy is developing a major energy export initiative. It has compiled a list of petroleum technology and equipment the Soviets need and all the possible sources of supply.

"Virtually without exception, the U.S. could meet every Soviet need with state of the art equipment and technology, but so could other suppliers with at least adequate or high quality technology and equipment," he said.

The Soviet and U.S. governments must remove barriers if trade is to grow. So negotiations aimed at achieving that goal have begun, Moore told a trade forum sponsored by the American Committee on U.S.-Soviet Relations in Washington, D.C., last month.

Moore said DOE executives have official communications on energy issues under way with their Soviet counterparts for the first time since 1979.

"Most of the energy related equipment and services the Soviets need must come from the private sector," he said. "We have stressed this point repeatedly.

"However, I also believe government to government efforts are necessary in the areas of joint research and development projects, exchanges of data to improve our understanding of the Soviet energy picture and its likely impact on world markets, and easing constraints on energy based trade."

Moore pointed out that President Jimmy Carter imposed foreign policy controls on oil and gas equipment exports to the Soviet Union in 1978 to protest human rights abuses.

The controls were toughened in each of the next 3 years.

U.S. AT A DISADVANTAGE

Unilateral foreign policy export controls disadvantaged American businesses, Moore said. By 1983 the U.S. share of the Soviet petroleum equipment and services market had dropped to 0.4%.

"Our European allies, Japan, and Canada stepped in to supply the equipment and services U.S. companies were barred from providing," Moore told the trade forum.

"The Commerce Department estimates that, had U.S. manufacturers continued to maintain their traditional share of the Soviet market, they would have received about $2 billion in orders during 1979-85. Instead they received $170 million.

"This loss of $1.83 billion cost individual American energy firms--and it cost the U.S. economy--almost 46,000 jobs, based on Commerce's standard formula that each $1 billion in exports represents 25,000 jobs."

Total Soviet industrial investment increased less than 20% in 1981-85, but investments in fuel production grew 53% with more than half going to the oil industry.

Soviet investment in fossil fuels alone in 1986-87 was more than 2-1/4 times investments in science, art, culture, and public education combined, but problems persist in fossil fuel production, transportation, and distribution.