NIXON TRADE PLAN FOR SOVIET SEEKS DEBT REPAYMENT (Published 1972) (2024)

WASHINGTON, July 10— The Nixon Administration has worked out a tentative formu la to persuade the Soviet Union to pay World War II lend‐ lease debts in return for cred its from the United States Gov ernment and for equal tariff treatment in this country, a White House official said today.

Secretary of Commerce Pe ter G. Peterson, in announcing today that the first meeting of the Soviet‐American Commer cial Commission would be held between July 20 and Aug. 1, stressed that the unresolved lend‐lease question remained the main barrier to reaching an over‐all trade agreement be tween the two countries.

He would not go into detail on the state of the lend‐lease negotiations. They began in Washington in April, were con tinued in Moscow during Presi dent Nixon's visit in May and are scheduled to resume in Moscow on July 20, concurrent ly with the commission meet ings.

Situation Described

But well‐placed Administra tion officials said that the situ ation is this:

The talks began with the United States asking about $1‐ billion in payment. The Soviet Union countered with an offer of $300‐million. The two sides have narrowed differences on the principal to about $300‐mil lion, but there are still differ ences over the terms of pay ment.

The Soviet side, insisting that it should get the same treat ment that the British did after the war, have held out for 2 per cent interest over 30 years. The United States countered that although such terms were ac ceptable at the end of World War II, they were not adequate today. It has asked for 6 per cent interest over the same period, 30 years.

Trade Treatment at Issue

In addition, the Soviet side has said it would not pay World War II debts unless the United States made it clear that the Soviet Union would receive Export‐Import Bank credits and most‐favored‐nation—or equal to the lowest—tariff treatment in this country. In the news conference announcing the commission talks, Mr. Peter son said that Mr. Nixon could not grant credits unless the “old credits” — the lend‐lease debts, were paid.

He indicated that if a trade package were agreed upon, the President would ask Congress for authority to grant most‐ favored‐nation treatment to the Russians. Duties on goods im ported from most‐favored na tions are lower than on goods from other countries.

The formula being worked out by Nixon Administration officials would include the set tlement of the lend‐lease debt at a figure large enough to satisfy the Administration, but with an interest rate low enough to meet Soviet objec tions.

One White House aide said that instead of announcing that agreement had been reached on $500‐million at 2 per cent over 30 years, the two sides might simpy set a flat figure to be paid in 30 equal installments, without reference to an interest rate.

In addition, the Administra tion would tell the Russians that if they agreed to a lend‐ lease settlement, efforts would be made to secure most‐favored‐ nation treatment from Congress. But if Congress failed to ap prove it in a certain period of time, the deal would be off.

End of War

At the end of World War II, the United States decided that Russia owed $2.6‐billion for civilian goods that were still in use and wrote off the cost of war matériel. But the United States asked that Russia pay only $1.3‐billion. The two sides were $500‐million apart in 1960 when talks broke off — with the United States asking $800‐mil lion and the Soviet Union offer ing $300‐million.

The other American members of the commission, set up dur ing Mr. Nixon's trip to the Soviet Unon, include Vice Chairman James T. Lynn, Under Secretary of Commerce Willis Armstrong, Assistant Secretary of State for Economic Affairs; Jack F. Bennett, Deputy Under Secretary of the Treasury, and Andrew E. Gibson, Assist ant Secretary of Commerce. Dr. Lon L. Fuller, a retired Har vard Law School professor, will be legal adviser, and James F. Mitchell, Special Assistant to Mr. Peterson, will be general counsel. The Soviet side has not yet been announced.

Trade Restrictions Scored

A committee of businessmen called yesterday for fewer trade restrictions and more retrain ing programs for workers who lose jobs because of increased international competition.

The Research and Policy Committee of the Committee for Economic Development said new international efforts were needed to reduce existing re strictions on trade and invest ment, especially nontariff bar riers and limitations on agricul ture trade.

Increased protectionism, on the other hand, would only touch off “a spiral of retalia tory restrictions by other coun tries,” the panel reported. “The results would be a loss of real income in the United States as a consequence of higher costs and prices.”

The group said that fears about loss of domestic jobs through foreign competition were greatly exaggerated, in asmuch as imports and exports had each amounted to only 4 per cent of the gross national product in recent years.

But for workers who might be displaced through increased trade, the panel advocated “special retraining and reloca tion programs” administered by the Federal Government, and “measures to protect the pen sion rights and health benefits of workers forced to change jobs.”

Import quotas should be used only in emergencies, and then only temporarily, the group recommended. It suggested that standing quotas be phased out by international agreement over the next four to five years.

In the meantime, the com mittee said, multilateral pro cedures would be worked out to govern the use of temporary quotas to be used “only in case of severe market disruptions as defined in internationally agreed standards.”

The panel also took to task those who criticize interna‐ tional corporations based in the United States for allegedly “exporting jobs.”