Soviet Union-The United States

Trade between the United States and the Soviet Union averaged about 1 percent of total trade for both countries through the 1970s and 1980s. Soviet-American trade peaked in 1979 at US$4.5 billion, exactly 1 percent of total United States trade. The Soviet Union continuously ran a trade deficit with the United States in the 1970s and early 1980s, but from 1985 through 1987 the Soviet Union cut imports from the United States while maintaining its level of exports to balance trade between the two countries.

In 1987 total trade between the United States and the Soviet Union amounted to US$2 billion. The Soviet Union exported chemicals, metals (including gold), and petroleum products in addition to fur skins, alcoholic beverages, and fish products to the United States and received agricultural goods--mostly grain-- and industrial equipment in return. The value of exports to the Soviet Union in 1987 amounted to US$1.5 billion, three-quarters of which consisted of agricultural products and one-quarter industrial equipment.

Competition from other parts of the world, improvements in Soviet grain production, and political disagreements between the two countries adversely affected American agricultural exports to the Soviet Union in the 1980s. In 1985 and 1986, trade was the lowest since 1973. The Soviet Union had turned to Canada and Western Europe for one-third of its grain supplies, as well as to Argentina, Eastern Europe, Australia, and China. United States government price subsidies helped to expand grain exports in 1987 and 1988.

The United States has long linked trade with the Soviet Union to its foreign policy toward the Soviet Union and, especially since the early 1980s, to Soviet human rights policies (see table 48, Appendix A). In 1949, for example, the Coordinating Committee for Multilateral Export Controls ( CoCom--see Glossary) was established by Western governments to monitor the export of sensitive high technology that would improve military effectiveness of members of the Warsaw Pact (see Appendix C) and certain other countries. The Jackson-Vanik Amendment, which was attached to the 1974 Trade Reform Act, linked the granting of most-favored-nation status (see Glossary) to the right of Soviet Jews to emigrate.

In 1987 the United States had reason to reassess its trade policy toward the Soviet Union. The Soviet Union had restructured and decentralized authority for trade under the Ministry of Foreign Trade, made improvements in human rights policies, cooperated in arms control negotiations, and shown a willingness to experiment with joint ventures. Furthermore, the United States government recognized that restrictive trade policies were hurting its own economic interests. In April 1988, Soviet and American trade delegations met in Moscow to discuss possibilities for expanded trade. Through increased trade with the United States, the Soviet Union hoped to learn Western management, marketing, and manufacturing skills. Such skills would increase the ability of the Soviet Union to export manufactured goods, and thus earn hard currency, and would improve its competitiveness on the world market. The delegations declared that Soviet-American cooperation would be expanded in the areas of food processing, energy, construction equipment, medical products, and the service sector.

Data as of May 1989