WORK WITH SOVIETS TO OPEN TRADE

There is an indirect benefit of Western imports that may be far more important to the Soviet economy than any of the goods imported from abroad. Increased Western imports will help break the monopolistic stranglehold some Soviet enterprises possess over certain industries.

More foreign imports mean more competition in the Soviet domestic market. Through this strategy, combined with decentralized planning, flexible prices and wages, and the increased use of production incentives, General Secretary

Mikhail S. Gorbachev is injecting new vitality and flexibility into moribund Soviet enterprises.The power of the international marketplace has become one of Mr. Gorbachev's most important instruments of economic reform. Contrary to the view of some American politicians and Sovietologists, Mr. Gorbachev is much more interested in exporting Soviet-made goods and services than international communism.

Both the U.S. government and the U.S. business community have already missed countless opportunities to exert a positive influence over Mr. Gorbachev's economic reforms. Unfortunately, our foreign policies and trade policies toward the Soviet Union are still based on the assumption that it is business as usual in the Soviet Union.

Our failure to come to grips with the international significance of the sweeping changes taking place in Soviet trade policies and practices has stymied our ability to respond to these changes in a creative and imaginative fashion. Mr. Gorbachev's foreign trade initiatives deserve a more constructive response from Washington than they have received thus far.

Although Mr. Gorbachev actually is implementing many of the ideas long advocated by American critics of the Soviet Union, the U.S. response has been as though nothing at all has changed in Moscow. It is almost as though we are preparing ourselves for the second coming of Joseph Stalin, who died in 1953.

American businessmen have two clear-cut choices as to how they may respond to the revolutionary new Soviet trade initiatives. They may sit cynically on the sidelines and wait until the new Soviet trade and joint-venture laws have been cast in concrete, or they may opt to work with the Soviets to help create a set of joint-venture laws and practices that are mutually advantageous.

However, if American businessmen opt out during the opening round they may find themselves squeezed out of future rounds not only by West Germany and Japan, but also by China, Israel, India, Brazil, Argentina, and Mexico.

It is not by chance that Mr. Gorbachev will visit Mexico, Brazil and Argentina in early 1987. The name of the game is trade and technology and it is being played on a global field.

Isn't it time for American businessmen and politicians to push aside some of their ideological stereotypes about the Soviet Union, and begin responding to Soviet trade overtures in a more pragmatic, open-minded fashion?

If we mean what we say about wanting to encourage the Soviet Union to become a more open, market-oriented society, then why don't we offer them more positive encouragement rather than continuing to impose endless government restrictions on U.S.-Soviet trade and denying them membership in GATT, the World Bank, and the IMF. If we truly believe in the power of the free market, why don't we give it a chance to work in the Soviet Union?

Thomas H. Naylor is professor of economics and business administration with Duke University and a noted Sovietologist.

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