Gorbachev’s Gameplan in New York: An Economic Reykjavik?

Informed sources in Moscow have
provided important insights into Soviet
leader Gorbachev’s economic and financial
agenda for his visit to New York. The
clear purpose of this “Wall Street
Summit” is to establish an economic
beachhead for the USSR in the United
States comparable to those recently
created by numerous West European
governments and businesses.

The trip will spotlight Gorbachev’s
desire to gain access to the General
Agreement on Tariffs and Trade (GATT),
the International Monetary Fund, the
World Bank and the Asian Development
Bank. In his conversations with President
Reagan, President-elect Bush, Donald
Trump and other business leaders,
including officials of the New York Stock
Exchange, Gorbachev will likely
emphasize:

• Access for Soviet
  firms to the U.S. stock and
  financial markets both as traders
  and to raise capital
  — This would include clearing
  the way for the Soviet Union to
  issue bonds and other securities
  in the U.S.
• Revision of the
  Stevenson amendment provisions
  barring Export-Import bank
  credits to finance U.S. exports
  to the USSR — This
  would permit the U.S. to make
  available to the USSR direct
  credits or government-guaranteed
  credits.
• A revised tax treaty
  — Revising the existing
  U.S.-Soviet tax treaty to permit
  American firms involved in joint
  ventures in the USSR to benefit
  from tax privileges soon to be
  introduced by Moscow — but only
  on a reciprocal basis.
• An investment
  protection agreement
  — Designed to help encourage and
  facilitate U.S. joint venture
  investments in the Soviet Union.

In fact, it now appears that
Gorbachev would like to achieve on an
“in principle” basis as many of
these bilateral, governmental and
non-governmental economic initiatives as
possible during his three days in New
York. He will, of course, highlight this
important element of his agenda by his
tours to Trump Tower, the New York Stock
Exchange and a new Soviet trade
exhibition whose opening coincides with
his visit. By so doing, Gorbachev seems
intent upon impressing both U.S. and
foreign audiences with his “new
thinking” and his profile as a
“a man with whom [the West] can do
business.”

Particularly worrisome is the hastily
arranged nature of this meeting. Alarming
parallels can — and should be drawn —
to the Reykjavik summit. In fact, some
experts are suggesting that this may
become an “Economic Reykjavik.”
Now, as then, important subjects bearing
directly on the security of the Western
world are being subjected to
uncoordinated and shoddily prepared
discussions “at the summit.”

We are advised that there have been no
interagency consultations — much less
thorough reviews of likely topics with
the Congress or the allies — since word
of Gorbachev’s economic agenda reportedly
reached Washington last week.

This is all the more troublesome,
insofar as the Congress — on a virtually
unanimous basis — remains deeply
disturbed over the lack of U.S.-led
consultations with the allies on the
serious national security dimensions of
Western credit flows to the Warsaw Pact
countries and Soviet client states. There
have been two Senate resolutions in the
past five months (Senators Sasser and
Bradley 96-0 on June 15; Senator Symms
64-2 on October 18) which attest to the
breadth of bipartisan feeling on this
subject. The fact that Congress has not
been involved by either the out-going
administration or the designated
representatives of the incoming one in
the preparations for “the Wall
Street summit” is all the more
remarkable considering in addition to the
expressed concerns the obvious role
Congress will have to play in
implementing the kinds of arrangements
Gorbachev has in mind.

Recent pertinent remarks:

• Henry Kissinger:
  “Unless Gorbachev’s reforms
  lead to a drastic reduction of
  Soviet military power and changes
  in historical Soviet conduct,
  Western credits are a form of
  hidden subsidy of the threat to
  Western security.” (Washington
  Post, Dec. 4, 1988.)

• George Bush: “It’s
  not clear to me that we
  understand the dynamics of the
  Soviet system well enough to know
  how to help Gorbachev even if we
  determined that we wanted to. And
  since we’re not sure of our
  understanding of the mechanism of
  change, we must stick to the
  fundamental guiding principle of
  sensible foreign policy: pursuit
  of our own interests….We don’t
  want to see untied credits being
  given to the Soviets at this
  point in time. We want to put
  Gorbachev in a position where he
  has to make hard choices and pull
  back from defense spending. That
  is supposed to be one of the
  hallmarks of perestroika.
  If we give him enough money,
  without stipulating how he is to
  spend it, we make it possible for
  him to avoid making this
  fundamental decision.” (Le
  Figaro, November 8, 1988)

• Caspar Weinberger:
  “I think we should proceed
  expeditiously in seeking to
  identify, on an Alliance-wide
  basis, appropriate linkages
  between Moscow’s urgently needed
  economic and financial
  assistance, and concrete actions
  by the Soviets to reduce the
  global threat to freedom.
  (Conference statement, December
  2, 1988)