POLITICAL AND ECONOMIC POSITIONS OF COCOM AND OTHER DEVELOPED NATIONS ON THE AFGHAN CRISIS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP08S01350R000100160002-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 49
• Document Creation Date: December 21, 2016
• Document Release Date: September 17, 2008
• Sequence Number: 2
• Publication Date: January 1, 1980
• Content Type: REPORT

National Secret
Foreign
Assessment
Center
Political and Economic [
Positions of COCOM and
Other Developed Nations
on the Afghan Crisis
Secret
ER 80-10036
January 1980 7
Copy 2 3
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National
Foreign
Assessment
Center
Political and Economic
Positions of COCOM and
Other Developed Nations
on the Afghan Crisis
An Intelligence Assessment
Research for this report was completed
on 14 January 1980.
This assessment was prepared by analysts in the
Offices of Economic Research and Political Analysis.
Coordination has been made with the National
Intelligence Officer for Political Economy.
Comments and queries are welcome and may be di-
rected to the Chief of Industrial Nations Division,
OER,
Secret
ER 80-10036
January 1980
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Secret
Political and Economic
Positions of COCOM* and
Other Developed Nations
on the Afghan Crisis
factors are different.
Key Allied governments all issued immediate and, in most cases, very strong
condemnations of the Soviet invasion of Afghanistan and are backing the
US grain embargo against the USSR. In considering other options for
response, they are torn between their apprehension about Soviet intentions
and the pull of stronger US leadership. Leaders are still sorting out these
forces and many, facing elections, may be waiting to read public opinion.
Although they may be encouraged to take sanctions of their own as the
United States continues to act, they must weigh the impact of any sanctions
on their interests and vulnerabilities vis-a-vis the USSR. In each case these
Economic Vulnerability
In the aggregate, developed country dependence on the USSR is small.
Although trade with the USSR expanded rapidly during the 1970s, it still
accounts for only about 2 percent of total Western exports and imports. The
USSR buys mainly grain, steel, and manufactures from the West and sells
fuel, raw materials, and semifinished goods.
Western dependence on the USSR is more substantial for certain types of
products. Some West European countries rely on the Soviets for a
substantial portion of their fuel supplies, supplies that have become more
important with the upheaval in Iran. Although an embargo on Soviet exports
of metals to the West would create serious problems in some cases, it would
not in general have major industrial repercussions on the United States or
the other major industrial countries.
interests.
For the large West European nations and Japan, the Soviets provide a major
market for the products of specific companies and regions, particularly with
a recession on the way. With elections coming up this year or next in
Canada, Japan, West Germany, France, and probably Italy, political
leaders there will be looking to protect regional and sectoral economic
high technology to the Communist countries.
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Western governments also are keenly aware of their financial exposure to
the USSR. At yearend 1978, the USSR owed around $7 billion to official
lending agencies and $10 billion to private Western banks, mostly in West
Germany, France, and the United Kingdom. As of last September the
Soviets owed some $900 million to US banks and their foreign subsidiaries
and roughly $450 million to the US Export-Import Bank.
Soviet Reaction to Sanctions
Although we strongly doubt that Moscow would take economic reprisals
against Western sanctions, Allied governments are not so sanguine. In view
of the importance of continued access to Western equipment, technology,
and grain to Soviet economic development, we believe the Kremlin does not
want to risk provoking a further cutoff in Western exports, which could
result from a heavyhanded reaction. It seems highly unlikely that the Soviets
will abrogate existing contracts, including those for shipments of natural
gas, oil, timber, or chemicals to the West. Chances for an across-the-board
debt default or a pullout of financial assets similarly appear minimal.
Moscow's reaction, if any, would probably be to emphasize the economic
gains to be obtained by nations not siding with the United States. These
countries might find the USSR more accommodating in discussions on
major Soviet purchases of equipment or in negotiations for the delivery of
Soviet fuels or other commodities in short supply.
Concerns of Major Governments
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The Japanese
probably will delay agreements on new Siberian development
projects under discussion and quietly ask the Japanese business community
not to seek additional credits for the Soviets.
France's hard line against any sanctions primarily reflects the special
relationship the French believe they have with the USSR, but it also shows
their desire to conduct foreign policy independent of the United States
where possible. Paris likes to act as an intermediary between Washington
and Moscow, but this role has not given France the edge it seeks in obtaining
major trade benefits from the USSR. Indeed, Paris is concerned that
contracts for exports to the Soviet Union have slowed in the past few years
and is anxious to sign new ones. Despite their words to the contrary, French
actions make us believe that they would not hesitate to pick up future
contracts that would have gone to US firms. Such deals will become more
important as the government directs greater attention to reducing unem-
ployment prior to the election
The West Germans want to maintain good commercial relations with the
USSR for both political and economic reasons.
Although West Germany's economic stake in the USSR is small
overall, the Soviets supply a sizable portion of the country's natural gas, and
certain industries-steel and machine tools, for example-are vitally
interested in maintaining the Soviet market.
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The Italian Government has remained silent on the question of sanctions
against the USSR in part because of fears the Italian Communist Party
might use the issue to further weaken Prime Minister Cossiga's tenuous hold
on power. The Communist Party has denounced Moscow's move into
Afghanistan but opposes any further response as detrimental to detente-an
idea with much popular support in Italy. The official silence also reflects
concern about endangering Italy's large natural gas imports from the Soviet
Union and its chances for new export contracts to help correct the trade
imbalance with the USSR. Against these factors, the interests of some
political leaders in supporting the United States-as a means of enhancing
Italy's status in the Western Alliance and thus forestalling the Communist
Party's drive for Cabinet seats-are not likely to weigh very heavily.
* The Coordinating Committee (COCOM) approves or disapproves sales of equipment and
high technology to the Communist countries.
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Other Developed Countries 23
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Tokyo's response to the Afghan situation has been to
take a series moderately of tough political and
economic measures aimed at showing displeasure with
the USSR
Tokyo
quickly condemned the Soviet aggression, canceled
several meetings with Soviet officials, indicated its
willingness to support tighter COCOM constraints,
and seems ready to place in abeyance further economic
and political advances until the crisis is resolved. Last
week Tokyo announced it was postponing talks on a
number of key projects, including deliveries of steel
pipe for 1980 and the recently signed Novolipetsk
silicon steel mill
Initial Response
The Japanese Government, in addition to condemning
the Soviet aggression, has canceled a scheduled
meeting between Soviet Ambassador Polyanskii and
leaders of the ruling Liberal Democratic Party, asked
the Diet to postpone a visit by members of the Supreme
Soviet, and postponed indefinitely an invitation for
Soviet Deputy Minister of Foreign Trade to come to
Tokyo to negotiate terms of Japanese financing for
four major projects under consideration.
Despite Tokyo's call for economic sanctions against the
Soviet Union, we have not yet seen any firm directives
to Japanese trading companies to put teeth in the
government's response. In fact, Japanese trading
companies reacted swiftly to US economic sanctions,
in one case anticipating President Carter's announce-
ment of a grain embargo. Just prior to the US
announcement of a grain embargo, Mitsubishi of
Tokyo stated that because of the abundant global
supply of grain, it would like to begin making deals
with the USSR in the future. Sumitomo's Bangkok
office also requested a meeting last week regarding
possible sales of corn from Thailand to the USSR,
possibly through third countries.
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When Tokyo announces its countermeasures, we do
not anticipate many beyond those already tentatively
decided upon. At most, Tokyo probably would also
delay agreements on new Siberian development
projects now under discussion
The Economic Stake
The Japanese arguing against strong economic sanc-
tions point to the more than $1.5 billion invested in
joint development projects in Siberia and the
compensation payments which would probably end if
work were suspended.
The five joint development. projects now under way
with the Soviets include a wood ship plant and a
forestry development program, with Japanese equip-
ment being paid for with deliveries of Soviet wood and
wood products. The three other projects are:
? The Yakutsk coal basin. Japanese exports associated
with the project total nearly $600 million. The
USSR plans to cover its loan repayments out of
earnings from coal deliveries.
? Natural gas exploration in Yakutsk. The 1 billion
cubic meters in reserves required for full develop-
ment are likely to be confirmed by early 1981. The
two sides will then negotiate production arrange-
ments and project financing.
(not yet extended) are repaid.
exploration through 1982, and the parties have
announced that production could begin by 1985.
Japan would receive one-half of the oil produced,
continuing for 10 years after development credits
? Sakhalin oil exploration. The Japanese have pro-
vided $170 million in risk capital to cover offshore
Last September USSR and Japan agreed to expedite
discussions on three new projects:
? Forestry development. The Japanese appear anxious
to conclude this followup to the earlier agreement;
they propose that the USSR deliver $550-600
million in timber in 1980-84 in return for a similar
amount of Japanese equipment sold under long-term
credit.
? Port development. The Soviet side has requested
Japanese assistance in expanding coal and container-
handling capacities at the port of Vostochniyy.
Reportedly, the cost of the project will bey $150
million.
? Paper and pulp plants. The USSR has-requested
Japanese assistance in the construction of a pulp
plant in Amursk, a paper-mill in Khaborovsk, and the
modernization of the pulp and paper industry on
~ Sakhalin.
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On 9 January, Tokyo postponed talks for credit
extensions for the third stage of the Soviet forestry
project, the sale of large-diameter pipe, the construc-
tion of a new silicon steel plant, and the Yakutsk coal
project.
In trade, Japan imports about $1.5 billion worth of
goods annually from the Soviet Union with emphasis
on wood and wood products and, to a lesser extent,
mineral fuels (heavy oils and coal). A large share of the
imports are received in return for Japanese develop-
ment work in Siberia. Some key products could be
difficult to obtain from other sources; Japan receives
about half of its rhodium (an acid-resistant metal used
as an alloy with platinum), 80 percent of its palladium,
and roughly half its platinum from the USSR.
Japanese sales to the USSR-$2.5 billion in 1978-
are almost totally of steel and machinery. The goods
are badly needed by the Soviets
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Over the past decade of Ostpolitik, West Germany has
placed great emphasis on maintaining good political
relations with the USSR: Aside from its interest in
detente as a means of reducing the risk of war, Bonn
sees Moscow holding the key to im roved relations
with East Germany.
On the
economic side, the USSR is by far West Germany's
largest Western trading partner. Although the USSR
accounts for only 2 percent of West German imports
and exports, it has some points of economic leverage-
particularly in natural gas and steel.
Initial Response
Although it believes that some reaction is necessary,
its main unilateral action
to date has been to call its Moscow Ambassador home
temporarily. West German officials do not want
Afghanistan to become a purely East-West issue,
[Other
measures, such as a curtailment of export credit
guarantees, a postponement of Schmidt's planned visit
to Moscow, or an Olympics boycott apparently are still
under consideration.
Political Concerns
Detente and Ostpolitik. With the approval of the
Western allies, detente and Ostpolitik have become a
cornerstone of West German foreign policy during the
past decade. West Germans see Ostpolitik as compris-
ing West Germany's relations with the Soviet Union
and East Germany, although it also includes West
German connections to the other countries of Eastern
Europe.
The opposition, should it take over the government in
Bonn following the election this fall, would alter the
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the basic treaties with the Eastern countries worked
out under Brandt, seek the improvement of personal
contacts with East Germany, and eschew confronta-
Working relations with the Soviet Union are essential
to West German security for several reasons: West
Germany's geographic location on the dividing line
between East and West in Europe, its political and
economic development since World War II, and the
presence of the Soviet troops across the border in East
Germany. The division of Germany into two national
states, one of which remains militarily occupied and
largely politically dominated by the USSR, inextrica-
bly links Bonn's policy toward East Germany with the
climate of West German-Soviet relations. Although
the goal of German reunification is qualified and
relegated'to a long-term West German objective, it
remains embedded in West German policy. Reunifica-
tion remains a latent hope and desire of large numbers
of citizens in both Germanies, as well as the stated aim
of a vocal minority in the West. Proponents of
reunification-as well as "realists" who see it as a
distant goal-agree that it is achievable only with the
acquiescence of the Soviet Union.
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In spite of occasional Soviet charges of hostile West
German intent toward the East, the West Germans to
a degree have managed to allay Soviet suspicions of a
revival of German militarism. West German insistence
that NATO theater nuclear force modernization be
accompanied by a parallel arms control effort is the
most recent example of Bonn's efforts to maintain the
security it has thus far achieved in its relationship with
the Soviet Union. West Germany's future approach to
NATO issues will likewise aim at strengthening the
West German image as a loyal but peace-loving and
detente-minded member of the Alliance.
West Berlin. West Berlin is a particularly sensitive
point in Soviet-West German relations. The status
and security of the city remain an Allied responsibility,
but West Germany's economic and cultural ties with
West Berlin are also essential.
Bilateral agreements with the Soviet Union on legal
aid, scientific and technical cooperation, and cultural
exchanges have been held up for years because of the
inability to agree on the wording for including West
Berlin in their provisions.
The Soviets and their East German surrogates can
adversely affect the West German position in West
Berlin. Though West German officials believe the
USSR does not want any kind of crisis over Berlin,
Soviet ability to pressure the city remains
Economic Relations
The overall framework for Soviet-West German
economic relations over the years has been set down in
a succession of broad economic cooperation agree-
ments. The current accord was signed in 1978 for a 10-
year period and may be renewed for three additional
five-year periods. It calls for economic, industrial, and
technical cooperation between the two countries in a
wide range of areas, including raw material and energy
development, building of industrial plants, joint devel-
opment and production of goods, and cooperation with
firms in third countries. In Bonn's eyes, however, the 25X1
agreement is little more than a declaration of intent;
any actual projects or deals must still be negotiated on
a case-by-case basis.
Trade Developments . .
Spurred in part by Bonn's Ostpolitik, West German
trade with the USSR expanded rapidly during the
1970s. Imports rose fairly steadily throughout the
period, from $342 million in 1970 to $2.5 billion in
1978. Exports rose just as dramatically over the period,
from $422 million to $3.1 billion, but most of this
growth occurred during 1971-75. Beginning in 1976, a
shortage of hard currency forced Moscow to scale
down its purchases.
percent last year
Despite this growth, the USSR is still a relatively small
trading partner for West Germany. For the first nine
months of 1979 the USSR's share of West German
imports stood at 2.4 percent, up from 1.1 percent at the
beginning of the decade. Meanwhile, the USSR's
export share jumped from 1.2 percent to 3.1 percent
between 1970 and 1975, but then fell back to 2.1
The composition of West German imports changed
substantially over the decade; raw materials-which in
1970 had accounted for almost half of West German
purchases from the USSR-fell to only a 13 percent
share in 1978. Fuel imports, on the other hand, rose
eightfold during the period, reaching $784 million in
1978, when they accounted for 4 percent of total West
German fuel imports. The largest percentage increase
during the period was recorded by manufactures,
which jumped tenfold to $487 million. Almost three-
fourths of these goods were chemicals, which the
USSR in the last few years has begun to ship as
compensation for chemical plants constructed by West
German firms in the USSR.
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West German exports to the Soviet Union throughout
the 1970s consisted almost wholly of manufactured
goods, particularly steel and machinery. Of the $3.1
billion in 1978 exports, just over $1 billion was steel
products and $1.5 billion was machinery.
Specific Dependencies. Although the USSR is not a
major trading partner, a cutoff in Soviet trade would
be painful for certain sectors. On the export side, the
machine tool and steel industries are probably the most
vulnerable. The USSR last year purchased more than
$300 million worth of West German machine tools, 10
percent of the total exports of an industry that depends
primarily on foreign sales. The USSR also was a major
buyer of steel pipe and sheet steel in 1979, taking about
12 and 16 percent, respectively, of total West German
exports of these commodities-a significant amount to
an industry suffering from excess capacity.
On the import side, natural gas probably represents
West Germany's main dependency on the USSR;
Soviet gas accounts for about 15 percent of total
supplies and could not be replaced in the short run. The
impact of a cutoff could be reduced by substituting oil,
however. The Soviet Union also provides enrichment
services for more than one-third of the uranium used to
generate 10 percent of West Germany's electricityC
Although West Germany is totally dependent on
imports for strategic metals, relatively few of these are
imported from the USSR. The main exception is
palladium, about 30 percent of which comes from the
Soviet Union. On the other hand, West Germany
obtains almost no titanium, cobalt, or tungsten from
the Soviets, and only about 10 percent or less of its
supplies of chromium, platinum, and magnesium.
Major Projects. Several West German firms are
heavily involved in the construction of a major steel
complex near Kursk, including the building of a steel
mill, several direct reduction plants, and an ore-
pelletizing plant. Contracts total several hundred
million dollars, and the Germans are hopeful that even
larger ones will be signed in the future as the complex
is expanded. Other projects include several chemical
plants, the Kama truck plant, and an electronic tube
factory, which is a joint undertaking of the Soviets and
the West German Siemens company.
Most West German equipment exports are financed by
government-guaranteed credits. West German firms
have accepted compensation arrangements, mainly in
the form of chemical products and natural gas; over 25
percent of West German imports from the USSR are
accounted for by such goods.
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Paris is currently weighing its keen interest in main-
taining its "special relationship" with Moscow against
its concerns about oil, Africa, and Western Europe.
Thus far, France does not see Soviet action in
Afghanistan as a threat sufficient to jeopardize detente
and the French independence of action that has gone
along with it. Although trade with the USSR is
relatively small and specific dependencies are of
marginal importance, Paris still hopes to become.
Moscow's leading Western supplier of industrial
equipment.
Initial Reactions
The French Government's condemnation of Soviet
intervention was somewhat less than ringing. Follow-
ing the US announcement of economic measures
against the. USSR, Paris stated flatly that it would not
use its economic/commercial relations with the Soviet
Union for political ends. The French also have thus far
blocked any major decisions in NATO and EC
councils and have ruled out an Olympics boycott. Paris
has, however, supported a US proposal for UN
condemnation of the USSR. Although the French
Government promised not to take commercial advan-
tage of other countries' actions against the Soviet
Union, this may be a short-term commitment only.
Paris is vitally interested in developing French high-
technology industries, including expanding exports.
International pressure would have to be extremely
great to prevent France from picking up Soviet
contracts that might have gone to US or other Western
French leaders do not yet seem convinced that Western
equities are clear-cut enough to warrant measures the
Soviets:might use as a pretext, for abandoning detente.
This line.of reasoning-stems from France's-attachment
not only to the obvious benefits that detente bestows on,
all, but also to.the lease on foreign,policy independence
it gives to a "middle power" such as France. The ,
French do not believe they would have this degree of
freedom in an international setting characterized ,by
superpowers locked in unyielding,-bipolar confronta-.
tion. It follows that'Paris-will likely explore every-.
interpretation of events and every avenue. of action or. .
inaction short of a return to a general cold war
atmosphere.
France's current policy is. designed to avoid riling ? ,
Moscow and to maintain'the;"special relationship", the,
two countries have nurtured since De Gaulle's.time. To
this end, the French have disassociated themselves
from efforts in NATO and elsewhere to portray the
problem in. East-West terms, urging instead that the .
situation be viewed in,a Soviet-Third World context.
Paris has argued against treating the Soviets as a,
hostile nation; eschewed economic sanctions-which in
any event they,do.not believe.will be effective-and
indicated a desire to proceed insofar as possible,with
business as usual, apparently even on theirproposal.for.
a Conference on European Disarmament.
Paris nevertheless recognizes that detente has been
wounded and that certain adjustments in French-
Soviet relations may- be necessary.
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Political/Diplomatic-Concerns Paramount
The French view of the Soviet invasion of Afghanistan
is strongly conditioned by concern over the preserv a
tion of detente and the French independence of action
that has gone along with: A. Domestic political pres-.
sures have counted for little so.far, although they could
still take on some importance.
withdrawal of Soviet. troops.
also have joined in UN efforts to bring about the.
There are doubtless. those in French policymaking . .
circles who put a more alarmist interpretation on the..
invasion and its relationship to developments in 'Iran.
than does present policy. These voices surely argue that
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the invasion enhances Soviet ability to threaten the
West's oil supplies and that the reaction not only of
France but of the West as a whole reflects shortsight-
edness and weakness. If for the time being French
leaders have chosen to emphasize detente over other
factors, there is no reason to believe they could not or
would not change their stance if developments were to
take a turn for the worse.
France's "special relationship" with the United States
also figures in the French approach to Afghanistan.
Having struggled for years to avoid domination by the
United States, and having found at least a partial
answer in detente, Paris is understandably reluctant to
follow unquestioningly the US lead on Afghanistan.
Thus, although Paris has recently responded to US
pressure by hardening somewhat the tone of its public
stand on the invasion, it does not seem to have relented
on the more basic elements of its position
France's intent to maintain its independence makes
Afghanistan a potentially important domestic issue.
With maneuvering already under way for the 1981
presidential election, Giscard cannot afford to make a
mistake on such a major issue. His policy already has
come in for some criticism. The Gaullists, for example,
have taken the government to task for not standing
closer to Washington on this issue, but they could as
easily have found fault with the government if its
initial response had been more closely in tune with that
of the United States. The government's ability to
anticipate this sort of capriciousness-combined with
its awareness that public opinion on Afghanistan is
mixed-has given it a relatively free hand.
Barring developments that turn the Afghan situation
into a full-blown East-West crisis, the French may see
in their cautious, independent position an opportunity
to play some sort of a middle role, either in bridging the
gap between the superpowers or in providing a rallying
point for Third World and nonaligned countries which
may not be comfortable siding with the United States
or the Soviets but which are deeply concerned about
Afghanistan and desirous of a peaceful resolution of
tensions.
Economic Considerations
France still has a long-unfulfilled dream of using its
relatively independent foreign policy stance as a lever
to achieve preferential treatment in economic relations
with the Soviets. France has been the most active
among the major West European countries in estab-
lishing regular exchanges of visits of officials and trade
commissions. The economic results of its five- and 10-
year cooperation agreements, its willingness to provide
cheap credits, and its annual high-level meetings have
not been particularly striking. The Soviets base practi-
cally all contracts on strict competitive terms, and
France has never done better than possibly winning its
share of projects.
Overall Trade Developments and Dependencies
French trade with the Soviet Union expanded rapidly
in the 1970s. Exports jumped from annual averages of
about $300 million in 1970-72 to $1.5 billion in 1977-
78. French imports rose from $250 million in the early
1970s to $1.2 billion by the end of the decade.
Dependence on the Soviet Union rose only marginally,
however. In the early 1970s Soviet purchases ac-
counted for about 1.5 percent of total French foreign
sales, while imports from the Soviet Union were a little
over 1 percent of total French imports. By the end of
the decade, the Soviet Union accounted'for less than
2 percent of French exports and 1.5 percent of French
imports; moreover, the Soviet Union's share peaked in
1977 and is unlikely to rise significantly at least until
after the early 1980s.
France joined other Western nations in actively
courting Moscow in the mid-1970s in attempting to get
in on the ground floor in Soviet development of what
appeared to be huge reserves of oil and natural gas. In
return for French pipe, Paris contracted for 1-2 billion
cubic meters of natural gas annually for 1976-79-up
to 15 percent of total French imports-and planned to
buy 5 billion cubic meters in 1980-81 and 8 billion
cubic meters by 1990. Because of the lack of a pipeline,
France has been fulfilling its agreement through a
swap arrangement whereby the French-purchased gas
is delivered directly to Italy, and France receives
Dutch gas contracted by Rome. France also has been
buying around 100,000 b/d of crude oil (5 percent of
total imports). Purchases rose to about 150,000 b/d
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last year. In addition, in 1978 Soviet oil products
accounted for 18 percent of French imports. Overall,
French imports of Soviet energy products-including
$250 million in uranium enriched in the USSR and
returned to France and $50 million in coal-totaled
$850 million in 1978, 70 percent of total French
purchases from the Soviet Union. Other French
purchases of some importance were cotton ($100
million, one-third of total French cotton imports),
wood -($65 million, 9 percent), and unwrought alumi-
num ($32 million, 9 percent).
Of major strategic metals, the Soviet Union is a
preponderant supplier to France only of palladium
(78 percent of French imports). France obtains about
10 percent of its supplies of chromium, magnesium,
platinum, and rhodium from the USSR.
On the other side of the coin, French firms export a
wide range of industrial equipment to the Soviet
Union. We are not aware of any major plant or firm
that produces primarily for sale to the USSR. Besides
a few small trading companies formed to promote
commercial exchanges with the Soviet Union (includ-
ing some designed specifically to facilitate
compensation agreements), some firms producing
tubes and pipes, metalworking machinery, and heating
and cooling equipment would suffer to some degree if
sales to the USSR were cut or eliminated.
Although the largest agricultural producer in Western
Europe, France is only a marginal supplier of food to
the Soviet Union, both in absolute terms and as shares
of either French or Soviet trade. In 1978 French sales
of food items to the Soviet Union totaled $47.5 million,
down sharply from $127.1 million the previous year.
The drop was due to major shipments of butter and
sugar in 1977 (butter sales amounted to $41 million in
1977 compared to $10 million in 1978; sugar sales
dropped from $42 million to $8 million). The most
important French food exports in 1978 were barley
($7.7 million, 1 percent of total French barley exports),
malt ($4.6 million, 3 percent), and alcoholic beverages
($12.1 million, 1 percent of total French sales). In
1978 France sold no wheat or corn to the Soviet Union.
Recent Contracts
Paris is concerned that the slowdown in Soviet
contract-signing in 1977-79 will lead to stagnation and
possibly to declines in French sales. France thus has
been particularly forceful in attempting to obtain
Soviet signatures, particularly for projects under
negotiation for several years. Recent contracts signed
between Moscow and French firms include gas-lift
equipment for enhanced oil recovery, computers and
related equipment for TASS, and telephone switching
equipment and possibly production facilities. The total
value of these contracts will probably exceed $1 billion.
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The computer and telephone switching contracts have
created some controversy. Following President Cart-
er's 1978 decision to suspend temporarily a license to 25X1
export a US computer in response to Soviet dissident
trials, Paris announced with some fanfare that US
pressures on its Western allies to follow suit would not
be heeded. Stating that US pressures infringed on
French independence, Paris added-then as now-
that economic measures should not be employed for
political ends. France immediately offered a French-
built computer to replace the American equipment,
and a contract was signed in early 1979. Paris added
that nine minicomputers and 108 programmable
terminals would also be sold to TASS. In June 1979
Paris and Moscow announced an additional agreement
for joint development of a new generation of computers
and related equipment for the period 1985-95. Under
its terms, CII-Honeywell Bull-47-percent owned by a
US firm-would supply the technical know-how
needed to upgrade Moscow's increasingly obsolete
network of medium-sized computers.
France won a relatively small contract to supply
telephone switching equipment in early 1979 that also
had been bid for by a US firm. Following US
Government hesitation to okay licenses for a US firm
to build facilities producing components for the system
within the USSR, France bid for this contract as well.
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France rather reluctantly has signed several
compensation contracts and is negotiating others.
France joined several other West European nations in
the 1970s in signing deals involving deliveries of Soviet
natural gas in return for Western pipe and related
equipment. Paris also has agreed to chemical plant
compensation agreements whereby a share of the
output is imported from the USSR. In the only major
compensation agreement for a metallurgy project, the
French firm Pechiney-Ugine-Kuhlmann agreed in
1976 to construct an alumina plant in Siberia and will
receive 100,000 tons of aluminum bars annually for 10
years when the plant begins operation, probably later
this year. The two most important projects currently
under discussion-an aluminum smelter and modern-
ization of factories producing the Moscvich auto-
mobile-both involve compensation, the first for more
aluminum bars and the second for around one-third of
the auto output. France is pushing hard on the
aluminum deal but is reluctant to allow inroads into
the domestic automobile market. The French Govern-
ment estimates that approximately one-fifth of
France's imports from the Soviet Union currently fall
under compensation agreements.
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On the economic
front, London is less susceptible to Soviet pressure and
will be less troubled than other allies by a deterioration
in relations with Moscow. Trade between the two is
small and, unlike the pattern with most other West
European countries, includes few energy products.
Moreover, exports of the Soviets to the United
Kingdom are double their purchases of British goods;
Soviet retaliation in this area thus would cost the
USSR more than Britain. (C NF)
Initial Reactions
London sharply rejected Moscow's explanation for the
Soviet invasion of Afghanistan and announced its full
support for the steps taken by the United States. The
British Government also has proposed its own plan for
sanctions, favors European Community involvement,
and has been out in front in urging strong allied
backing for American actions.
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Although Lord
Carrington stated that there are no plans to increase
British armed forces in the area, he left the door open
to such a request.
Economic Considerations
Britain's economic links with the Soviet Union are.
weak. The USSR accounts for only about 1.4 percent
of Britain's total trade. British imports from the Soviet
Union consist largely of raw materials-oil, timber,
and industrial diamonds. Soviet oil is likely to decline
in importance as North Sea oil production rises. Chief
British exports are chemicals, textiles and fabrics,
and machinery. While other Western competitors-
notably West Germany, France, and Japan-have
steadily increased their trade with the Soviets, Britain
has lagged behind. The only major British contracts in
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the last 10 months have been a $100 million chemical
plant and a $76 million agreement to build a glass fiber
plant.
Several factors have worked against the development
of Anglo-Soviet trade.
London also has shown
little enthusiasm for the barter or commodity buy-back
arrangements favored by the USSR. The British also
appear reluctant to make noneconomic concessions to
the Soviets in order to gain economic advantages.
(C NF)
Anglo-Soviet trade expanded 30 percent during the
first 10 months of 1979. The increase resulted from a
surge in British imports, which reached nearly
$1.5 billion, up almost 50 percent from a year earlier.
British exports to the Soviet Union rose about
13 percent, to $755 million. The increase in exports,
however, is somewhat misleading because the dollar
figures tend to overstate the value of trade between the
two countries; the pound appreciated about 10 percent
vis-a-vis the dollar in 1979.
Prospective Actions and Reactions
The Soviets have used only $1.2 billion of a $2 billion
five-year trade credit agreed upon in Moscow in 1975.
The credit arrangement expires next month and almost
certainly will not be fully utilized by then.)
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Moscow appears to have the upper hand in economic
relations with Italy. Italy imports a significant share of
its energy supplies-both oil and natural gas-from
the Soviet Union, and Rome is eager to eliminate a
$1 billion trade deficit with the Soviets through
expanded sales. In addition, internal politics will make
it extremely difficult for Rome to take punitive action
against the USSR. Italy does not wish to be drawn into
a conflict between the superpowers, and economic
sanctions would be viewed. by leftists in Rome as a
dangerous repudiation of detente. Ruling by virtue of
Socialist abstention in Parliament, Prime Minister
Cossiga has limited options in dealing with the
Afghanistan crisis.
Cossiga government, which must be careful not to take
positions that the Communists and others can add to
their list of grievances against the government.
based coalition including both leftist parties.
Prime Minister Cossiga's government-which is domi-
nated by his Christian Democratic Party and excludes
the Communists-remains in office by virtue of a
Socialist parliamentary abstention. The Communists
are exploiting Cossiga's inability to deal effectively
with Italy's pressing economic and public order prob-
lems to argue for a new government including Commu-
nist Cabinet ministers. His hold on power became even
more tenuous recently after leftwing Socialists de-
manded that their party withdraw its backing and 25X1
work together with the Communists for a broadly
Initial Reactions
The Italian Government's initial response to the Soviet
invasion of Afghanistan has been to condemn the
action and to call for a withdrawal of Soviet troops in
both its public statements and in the parliamentary
session recently held to discuss the issue. In addition,
Rome concurred totally with the NATO decision to
bring the Afghanistan question before the United
Nations and has been active in trying to gain Third
World support for this move. Prime Minister Cossiga,
as European Community President, has not taken the
initiative in forging a Community position. In the area
of bilateral relations with Afghanistan, the Italian
Government has recalled its Ambassador to Kabul and
has halted all forms of aid to the Karmal government.
Aside from calling in Moscow's Ambassador to Rome,
Cossiga has not taken any other steps that might have
an impact on Italian relations with the Soviet Union.
Political Factors
In Rome, opposition to the Soviet invasion is condi-
tioned by the broadly based Italian view of detente as
the foundation of international peace and stability.
International detente has also been a major factor
affecting interparty relations in Italy and, as a result,
the Soviet action has probably had greater domestic
political resonance there than in other West European
countries. The issue cuts two ways: on the one hand, it
underlines the wide distance still separating the
Communists from the traditional governing parties.
On the other hand, it highlights the weaknesses of the
Thus far, Cossiga has tried to handle the Afghanistan
issue in a way that diverts attention from the govern-
ment's shortcomings and forestalls the Communists'
drive for Cabinet seats. Italy's inclusion in the London
meeting of NATO allies enhanced the government's
international stature-and perhaps bought some time
for Cossiga at home. By demonstrating solidarity with
the decisions taken by Italy's allies-particularly the
move to bring the Afghanistan issue before the United
Nations-Cossiga can argue that his government has
taken another step ensuring Rome's inclusion in the
first rank of NATO powers.
The government's position on Afghanistan tends to
highlight the ambiguity of the Communist attitude;
the Communists have "repudiated" Moscow's actions
but have so far failed to call for the withdrawal of 25X1
Soviet troops. The party has also charged that US
countermeasures further damage detente. Even if the
party toughens its criticism of Moscow, the Commu-
nists' domestic opponents will be able to say they have
stopped short of a definitive break with the USSR.
Cossiga undoubtedly hopes the debate will raise new
doubts about the Communists' autonomy and suitabil-
ity as coalition partners-at least until there is a
relaxation in current international tensions.
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The Communist emphasis on preserving detente,
however, is one point on which the government is
.vulnerable. The government will have great difficulty
in associating itself with measures,'such as:economic
sanctions, that might be viewed as an escalation of
tensions and a further impediment to detente. The
Communists. already have raised.this issue by calling
on Italy and other West European countries to develop
NATO and EC initiatives aimed.at mediating between
the superpowers. Favorable comments on this proposal
from the left wing of the pivotal. Socialist Party
underline Cossiga's limited maneuvering room on the
Afghanistan issue.
In addition to the short-term consideration of self-
preservation, many Italian politicians are reluctant to
alienate the Communists totally on this issue; they are
convinced that some Communist involvement in the
governing process will eventually be necessary to treat
domestic problems, effectively-even though Afghani-
stan may postpone the day of reckoning.
Economic Concerns
Bilateral trade flows between, Italy. and the Soviet
Union give definite, although limited, leverage to
Moscow in conducting foreign relations with Rome.
The Italians are dependent upon the USSR for .
about 20 percent of their natural gas consumption and
5. percent of their petroleum. Rome is anticipating an
acute petroleum shortfall this year, and no alternative
suppliers exist for Soviet natural gas. Including both
gas and oil imports, about 7.5 percent of Italy's total
energy requirements are supplied by the USSR. C
Italian energy policy has inadvertently increased
Italy's economic dependence upon the Soviet Union.
Rome'has favored a switch from oil to natural gas,
which now accounts for 15.5 percent. of. total energy
consumption. The Soviet demand last fall for. renegoti-
ation of the natural gas contract angered Italian
energy officials; but they admitted that no substitute
for Soviet gas supplies will exist until the.opening of the
Trans-Mediterranean pipeline to Algeria-optimisti-
cally scheduled for 1981. Even then, Rome will wish to
maintain, and.increase, imports of Soviet gas.to permit
further switching from oil. The Soviets have made a
loose commitment to increase Italian supplies once new
Siberian gasfields are developed.
Trade with the Soviet Union is minor relative to total
Italian commerce. Sales to the USSR last year
represented an estimated 1'.6 percent. of total Italian
exports; imports from the Soviet Union amounted to
2.6 percent of total Italian foreign purchases. Italian
exports to the Soviet Union have remained virtually
flat since 1977 at the $1.1 billion level, while Italian
imports of Soviet goods last year probably were around
$2.2 billion
While Soviet exports of raw materials.are increasing
dramatically because of rising prices, Italian sales to
the USSR are stagnating. Moscow has informed Rome
that future Italian exports will be dependent upon the
supply of government-backed credit.
Commercial disputes between Moscow and Rome have
generally resulted in lopsided victories for the Soviets.
Soviet pressure caused Rome to break the Gentlemen's
Agreement on export credits in the 1977 Italian-Soviet
trade agreement. The Soviets also have twice forced
the Italians to rewrite a fixed-price compensation
contract for natural gas. The latest price revision
occurred last November after the Soviets threatened to
cut off supplies
The Italians are eager to correct the trade imbalance
with Moscow through increased sales. Italy sees the
USSR, like the Middle East, as an area where Italian
equipment does not compete at a technological,disad-
vantage. Italian politicians also hold trade initiatives
with Moscow in high regard for their propaganda
value. Top-level intervention often has pushed through
trade deals over the objections of state corporation
managers who felt that the agreements were not
commercially advantageous to Italy.
Nonenergy imports from the Soviet Union--chiefly- .
wood, steel, and chemicals=-could be purchased by the
Italians from alternative_sources. Most Soviet chemi-
cal imports, however, result from compensation agree-
ments.
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Italian exports to the USSR consist mostly of machin-
ery and equipment under major contracts to supply
complete manufacturing plants and large-diameter
pipe. Rome fears that 1980 will be even more
unfavorable than 1979 for exports to the USSR, which
are declining in real terms. Deliveries for most major
Italian projects in the Soviet Union will be completed
by the end of this year and few new agreements are
being negotiated. Italian efforts to gain participation in
Soviet offshore oil drilling activities have been fruit-
less. A Montedison bid for a $2 billion contract to build
a petrochemical plant will not be considered by the
Soviets until the details of their new five-year plan are
settled; the Italians are pessimistic about their chances
of winning the contract. The Italian state steel
company, FINSIDER, faces stiff German competition
in a proposed $200 million deal to construct an electric
steel plant.
Rome is pinning much hope for increasing exports to
the USSR on a new trade agreement signed last fall.
The accord grants the Soviets $650 million in credits,
but terms have yet to be set. The trade agreement also
calls for specific projects in the engineering, energy,
chemical, and petrochemical fields.
A possible deal discussed during the negotiations
would involve Italy's supplying nuclear components to
the Soviet Union in return for the electricity produced
by Soviet nuclear plants. Italian energy officials have,
however, expressed reservations about the technical
feasibility of importing electricity from the USSR.
According to press reports, an Italian state-owned
firm, Terni, just last week signed an unrelated contract
to supply components for nuclear power plants to the
USSR.
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Canada's small overall stake in the USSR puts Ottawa
in a good position to support US measures against
Moscow.
Clark's announce-
ment that Ottawa "will take the lead in efforts to move
the Olympics from Moscow" could benefit Montreal,
primary alternative. Clark has made it clear, however,
that the Olympics should only be moved at the request-
of the International Olympic Committee. (c NF)
Initial Response
Ottawa's response to the Soviet invasion of Afghani-
stan has been outspokenly critical. Prime Minister
Clark has condemned the Soviet action as an "unwar-
ranted intervention" and stated that he would "be
conveying the position of the Government of Canada to
President Brezhnev in a letter." Canada had been
active in UN proceedings against the Soviets, and
Clark has taken up Vice President Mondale's call to
move the Olympics from Moscow. On the economic
front, Ottawa has pledged that Canada will "refrain
from grain sales to the USSR in excess of normal and
traditional levels." In a press conference last Friday,
Clark also ticked off a series of economic and political
actions Ottawa intends to follow, including:
? Working with other nations to limit exports of high
technology to the USSR.
? Halting further official export credits.
? Canceling or postponing upcoming official visits with
Soviet ministers or senior officials.
? Canceling or restricting cultural and scientific
exchanges.
? Denying any increase in Aeroflot flights (the Soviets
usually add a third weekly flight in the summer
months).
? Announcing that Ottawa is prepared to contribute to
The Stakes
Canada has little economic stake in the Soviet Union.
The $325 million in Canadian sales to the USSR
during the first three quarters of 1979 represented less
than 1 percent of total Canadian exports. Canada
imported just $40 million worth of goods from the
Soviets in the period of January through September
1979, most consisting of light machinery and equip-
ment or nonstrategic raw materials. There are no
significant joint projects between Canada and the
USSR.
Sectoral interest in Soviet trade is strong, however.
Canada will export 1.4 million tons of wheat valued at
$245 million to the USSR during the crop year ending
next June. This represents 11 percent of total Cana-
dian wheat sales. About one-fourth of Canadian barley
exports will go to the Soviets. Another $225 million of
Canadian wheat and flour has been purchased by the
Soviets for shipment to Cuba.
relief for Afghan refugees in Pakistan.
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Other COCOM Countries
The Benelux Countries
Belgium and Luxembourg have condemned the Soviet
invasion of Afghanistan as a threat to peace, but
neither would be likely to initiate any action of its own.
They would follow West German and French leads,
particularly in an EC context. The Hague is being very
deliberate in its response to the Soviet invasion of
Afghanistan and is currently reviewing its options. F
reexported to the Soviet Union.
The relative ease of incorporating a company in
Belgium has made that country a major center of
operations for Soviet export-import firms. Typically,
joint Soviet-Belgian trading firms market Soviet raw
materials in exchange for West European industrial
goods. NAFTA-B, perhaps the largest of the joint
Soviet-Belgian firms, handles all Soviet oil sales in
Belgium and reexports to third countries such as
Switzerland. In 1978, 3 percent ($145 million) of
Belgian oil imports came from the Soviet Union; of this
amount, about two-thirds was reexported. Besides oil,
only diamonds are an important Soviet export to
Belgium. One fifth of Soviet diamond exports to the
OECD countries are sold to Belgium, most to be
brokered on the Antwerp diamond exchange. The
value of Soviet diamond exports to Belgium in 1978,
$165 million, exceeded that of crude oil and oil
products. Manufactures constitute about 90 percent of
Belgian sales to the Soviets, about 60 percent of these
consisting of semifinished steel products.
Trade with the Soviet Union accounts for about
1 percent of total Dutch trade. Dutch sales to the
USSR, only 0.4 percent of total Dutch exports, consist
mainly of chemicals, machinery, and semifinished
manufactures. Petroleum products account for more
than one-half of Dutch imports from the Soviet Union.
However, a significant share of Soviet petroleum
products are resold on the Rotterdam spot market._
Denmark
Copenhagen views the situation in Afghanistan with
great seriousness and takes exception to the Soviet
intervention. Although the government presently has
no plans to implement sanctions, Denmark is with-
drawing a $9.5 million loan to Afghanistan. The Danes
will avoid any increase in grain exports to the USSR
and will try to ensure that future grain exports are not
Although overall trade between Denmark and the
Soviet Union is small, Denmark's growing dependence 25X1
on Soviet oil would provide Moscow considerable
leverage in retaliation against any sanctions imposed
by Copenhagen. Danish exports to the USSR
amounted to $87 million, 0.8 percent of total exports,
in the first nine months of 1979, up sharply from the
same period a year earlier. Machinery accounts for
nearly 70 percent of total exports to the Soviet Union.
Danish imports from the USSR amounted to $318
million, about 2.4 percent of total imports, and consist
primarily of oil and petroleum products. Danish
dependence on Soviet oil has increased rapidly in
recent years-Soviet oil accounted for 5.7 percent of
total Danish oil imports in 1975 and 14 percent last
year.
Greece
Except for cultural ties, Soviet-Greek relations tradi-
tionally have been cool. Over the past year or so,
however, Athens made an effort to improve relations
with the Soviet Union, primarily in response to a
perceived warming in Soviet relations with the West in
general. Athens has condemned the Soviet invasion of
Afghanistan, supports US countermeasures, and plans
some minor actions of its own in the diplomatic area.
Economic sanctions are still under study.
Greece receives about 3 percent of its total imports
from the Soviet Union, with crude oil and petroleum
products accounting for the bulk of purchases (86
percent in 1978). The USSR currently supplies Greece 25X1
bauxite.
with 18,000 b/d of crude oil per year, approximately
10 percent of Greece's total oil imports, and Athens
has requested a doubling of this amount. The Greeks
export a variety of goods to the USSR-principally.
agricultural products (citrus, grapes, and tobacco) and
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The Soviet-Greek cooperation agreement signed in
1978 provides for Soviet financing of an alumina plant
in Greece. The USSR also plans to supply the electric
power to the plant as well as purchase a portion of the
output. The two countries have been discussing pos-
sible supply of Soviet electric power through the
Yugoslav grid and future supply of natural gas to
Greece using a pipeline through Bulgaria. The Soviets
reportedly are prepared to fund construction of the
pipeline in exchange for additional Greek agricultural
products.
we expect the Norwegians will generally support US
initiatives. Whether the Norwegians actively cooper-
ate in these initiatives, however, remains to be seen. If
political relations with the Soviet Union deteriorate,
the Norwegian economy would be little affected.
Imports from and exports to the Soviet Union account
for less than 1 percent of Norwegian foreign trade. Oil
products make up almost 80 percent of all imports of
Soviet goods but amount to only about 2 percent of
Norwegian oil consumption. Although Norway pro-
duces more oil than it consumes, its refineries cannot
process enough crude oil to meet domestic demand.
Moreover, most domestically produced crude oil is
piped directly from the North Sea fields to the United
Kingdom. Norway would have little trouble replacing
Soviet oil, which is only about 3,000 b/d. Soviet
purchases from Norway consist mainly of paper and
paper products, special machinery, and inorganic
chemicals.
Portugal
The newly installed government of Francisco Sa
Carneiro recalled its Ambassador from Moscow for
consultations following the Soviet intervention in
Afghanistan. Sa Carneiro distrusts the Soviets and
almost certainly will support US countermeasures; he
is unlikely to initiate any measures of his own.
Economic ties between Portugal and the Soviet Union
expanded rapidly after diplomatic ties were established
in the wake of the 1974 revolution. Portuguese exports
to the Soviet Union leaped from less than $1 million in
1973 to a high of $54 million in 1976; imports posted
even greater gains, jumping from $25,000 in 1973 to
$125 million in 1977. Fresh vegetables account for
one-half of Portuguese exports; textiles and wine make
up the remainder. More than 85 percent of Portuguese
imports from the Soviet Union are crude oil; Soviet
supplies of 15,000 b/d account for about 15 percent of
Portuguese oil imports. The Soviet fishing fleet has
used Portuguese shipyards for repairs and has pur-
chased at least six fishing boats from Portugal
Turkey
With the Turks counting on the USSR for economic
aid and a major portion of their oil needs, Ankara will
attempt to do nothing that would worsen its relations
with the USSR. The USSR is Turkey's largest aid
donor and one of the largest non-Communist recipients
of Soviet economic aid
Turkey concluded a 10-year framework agreement
with the Soviet Union in 1975 calling for $600-700
million in Soviet financial assistance to finance steel,
aluminum, and thermal power plants. In 1977 the aid
commitment was raised to $1.2 billion when the
Soviets agreed to finance a steel plant and an oil
refinery. (The steel plant, at Iskendereen, is one of the
Soviets' largest overseas aid projects.) As Turkey's
foreign exchange situation worsened and Western
lenders dried up, Turkish leaders continued to seek.
more funds; in 1979, they signed a three-year agree-
ment with the USSR, including about $860 million in
Soviet aid. The Soviet Union also agreed to supply
about 25 percent of Turkey's crude oil imports during
1979-8 1, up from around 10 percent previously.
Besides oil, the USSR agreed to sell additional supplies
of iron and steel, fertilizers, chemicals, and coke in
exchange for Turkish wheat, other agricultural pro-
ducts, wolfram, and consumer goods. Several other
kinds of economic cooperation also were planned,
including Soviet technical and financial assistance in
oil exploration.
industrial output.
The agreement recently has encountered serious prob-
lems. Moscow is refusing to supply the additional oil
agreed to because Turkey has failed to deliver wheat as
scheduled. Foreign exchange shortages, which limit
Turkey's ability to import raw materials and other
industrial inputs, have cut into domestic farm and
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Other Developed Countries
The Australian Government has roundly criticized the
USSR's invasion of Afghanistan and stated its full
support for the actions taken by the United States
against the Soviet Union. Furthermore, Canberra has
given assurances that Australia will not attempt to
undercut the US embargo on grain sales to the
USSR
personnel to Australia
Initial Response
The Australian Government has strongly condemned
the Soviet invasion of Afghanistan as "totally without
justification, a violation of everything the United
Nations stands for, and a mode of behavior which will
make normal relationships between nations totally
impossible." It has stressed that "the world needs to
demonstrate that the price of that invasion is higher
than the Soviets envisaged and higher than they would
be prepared to contemplate on future occasions." To
back up this statement, the government has:
? Stated that it will not undercut the US grain
embargo.
? Suspended any agreements or discussions of joint
arrangements with the Soviets, including two joint
feasibility studies which were under way for fishing
in Australian waters.
? Delayed indefinitely talks and visits with Soviet
officials.
? Decided not to approve further visits of Soviet
scientific vessels to Australian ports.
? Canceled a scheduled February visit of Aeroflot
Australian official relations with the Soviet Union
have been at a low ebb since a Soviet-implanted
listening device was found in Australia's Embassy in
Moscow in 1978. Following the incident, Canberra
suspended most bilateral talks and cultural exchanges.
Economic and Political Concerns
Australia does not have a major stake in trade or other
economic relations with the Soviet Union; its key
concern is the possible impact of US actions on the
international grain market-grain is an important
source of foreign exchange and a major political issue.
Imports from the USSR in FY 1979, which ended last
June, amounted to only $8.5 million, one-tenth of
1 percent of total foreign purchases. The imports
include some raw materials, fish products, and cotton
fabrics; in no instance do the purchases exceed 5
percent of any import category.
As to exports, Australia's main interest is in agricul-
ture, which accounts for 40 percent of total foreign
exchange earnings. Australian wool exports to the
Soviet Union in FY 1979 amounted to about $220
million-13 percent of the country's foreign wool sales.
Although wheat shipments to the USSR totaled only
about $17 million last fiscal year (2 percent of wheat
exports), Australian shippers have contracted with the
USSR to supply 1.8 million tons of wheat (valued at
about $300 million) and 500,000 tons of barley in the
year ending June 1980 (no barley was sold in ~
FY 1979).
If Canberra continues to cooperate with US trade
sanctions, we expect Australian grain sales to the
Soviets in 1980/81 to again total about 2.3 million
tons.)
2'
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Austria is unlikely to.pariicipate in any actions against
the USSR because of its position as a neutral country
and its heavy economic dependence on the'Soviet
Union. Almost 30 percent of Austrian oil and natural
gas consumption is covered by purchases from the
Soviet Union, which in,turn.aceount-for about 70
percent. of Austria's -total imports 'from the USSR. On
the export side, the Soviet Union purchases about 17
percent of Austrian exports: Most of these sales consist
of sheet steel, ships, and machinery and equipment
Finland's geographic location and major economic,ties
with the Soviet Union preclude strong reactions to the
Soviet action in Afghanistan. During the 1970s a
dramatic shift occurred in Finland's'economic orienta-
tion=away from-the West and toward the Soviet
Union, which now accounts for 20-percent of Finnish
trade. The underlying causes of this shift were the
surge in world oil prices with a corresponding rise in
the value of Soviet energy'exports;'the balancing
requirements of Finnish-Soviet trade, which is con-
ducted~under barter-clearing 'arrangements; and the.
economic recession in the-West: Economic dependence
heightens Finland's political /strategic vulnerability to
the USSR, although the Soviets also-benefit-from this
window to the West
The Soviet Union-'currently supplies almost 70,percent
of Finland's?total;energy imports and 50 percent of; domestic energy requirements: The Soviets built two of
Finland's'four nuclear. reactors,:supply.-their, fuel, and
accept their irradiated waste. In payment for Soviet
imports, Finland exports about one-tenth of its indus-
trial product to the USSR. The Soviets absorb about
one-half of Finnish ship;production and one-third of
the output of Finnish engineering industries, providing
stability to these recession-prone sectors. The Finns
also are involved in several construction projects in the
Soviet Union. { - '? "'
Iceland imports all its oil from: Moscow, which charges
spot prices on these sales.: Thersurge in;spot prices has.
pushed the Icelanders into: a frantic search for a new!,,-
supply source. Saudi Arabiaiand theUnited -Kingdom
reportedly may agree to sell.crude oil-to'Iceland, which`
the Icelanders would then have refined. in Europe.
Icelandic sales of fish' to the. USSR"presumably.would
continue because they benefit both parties.
Oil is the major component in Irish-Soviet trade; '
accounting for three-fourths of'Ireland's-purchases '
from the USSR. In.1978;.6 percenttof Ireland's oil' -
imports-came from theSoviet-Union: Dependence rose
to nearly 8 percent in the first'six months of 1979: ,The}
state-owned Irish National'Oil'.Corporation;(INPC)
was founded last year to obtain' oil-- contracts,. directly
with exporting countries: Thus far; the company has..
secured only one contract-for delivery of 10,000 b/d
of Iraqi crude. However, if the Soviets cut offtheir-=
supplies, INPC has laid the groundwork. to.negotiate
for other supplies.
Other than oil, no clear trends in Irish-Soviet Arade
have emerged, and trade either way:accounts for less
than 1 percent of total Irish foreign trade. In spite of a
1976 economic cooperation agreement;4rish''firms- '
appear reluctant to -push, into Soviet markets; citing -
unfamiliar, structures, and, lack of knowledge.. On -the
other hand, the Soviets~.are"eager toaexpand ;in the Irish
market. Moscow has been pushing Dublin to allow an
increase in the number of'Soviettrade representa
tives-described by Moscow: as independent business=
men-in Ireland; thus' far,: Dublin has, refused;
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Spain
Despite the reestablishment of relations only in 1977,
Spanish-Soviet trade grew rapidly in the 1970s.
Spanish imports rose from $10 million in 1970, to a
peak of $165 million in 1976, and dropped to $110
million in 1978. More than one-half of Spanish imports
from the Soviet Union consist of crude oil, coal, and
petroleum products; these purchases, however, account
for only 1 percent of Spain's energy imports. Sales to
the Soviets have grown steadily from $6 million in
1970 to $145 million in 1978. About one-third of
Spanish exports consist of rolled-steel structural forms,
and one-half is made up of other semifinished metal
products.
The activities of joint Soviet-Spanish companies,
involved mostly in fishing, shipping, and the lumber
trade, have proven profitable to the Spanish.
Although Madrid hopes to expand economic relations
with Moscow, the Spanish have no illusions about the
Soviets ever becoming a major trading partner. The
center-right government of Prime Minister Suarez
distrusts the Soviet Union-several Soviet diplomats
have been expelled as spies during recent years-and
would be inclined to support US sanctions.
Sweden has not developed an extensive trade relation-
ship with the USSR. In 1978 the USSR provided less
than 3 percent of Sweden's imports and took only 1
percent of its exports. The Soviets have provided 15
percent of Swedish oil supplies but no other commodity
stands out as being particularly important. While
staunchly rejecting any outside control over exports of
purely Swedish products, Stockholm generally has
accepted controls over exports that embody high
technology originating in COCOM countries. During
a 1978 flap over the possible sale of a sophisticated
Swedish machine tool to the USSR, Swedish officials
hinted that if left alone Swedish firms probably would
go along with US guidelines on an unofficial basis. The
reason given was that high-technology products with
no US components are rare and Swedish firms are
unlikely to risk their sources of components or their
markets in the United States.
alternative sources.
Other smaller developed countries generally have
condemned Soviet intervention but are awaiting co-
ordinated decisions or actions by the major allies
before saying much about sanctions. For practically all
these coutries, trade with the Soviet Union has
expanded rapidly but accounts for only 1 to 2 percent
of total trade. Soviet energy products, particularly oil,
are the major source of concern. Although the amounts
in each case are small, a Soviet cutoff of energy would
put pressure on supplies and cause a scramble for
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Secret
Soviet Response to Economic Sanctions
At least initially, the USSR is unlikely to institute
economic reprisals against those Western countries
implementing economic sanctions against it. The
Soviet leadership is well aware of the importance of
continued access to Western technology, equipment,
and grain to Soviet economic development; perceived
short-term benefits of economic retaliation will likely
be judged insufficient to risk the economic costs which
would result from a sustained cutoff in trade by the
West. Indeed, at first the USSR may feign indiffer-
ence to Western action by maintaining a "business as
usual" posture. This action would be consistent with
traditional Soviet claims that economics should be
divorced from politics and that the USSR is a
dependable source of supply to the West.
Soviet reaction will ultimately be influenced by the
degree of unanimity among major Western trading
partners. Should West Germany, Canada, and the
United Kingdom join the United States in imposing
economic sanctions while France, Italy, and Japan
abstain, the Soviet reaction will probably be one of
modities or in other economic negotiations.
emphasizing the economic gain to those who followed
the latter course of action. Moscow may become more
accommodating in order to bring negotiations on major
deals to fruition and thus demonstrate by example that
countries participating in economic sanctions will lose
contracts to those who do not. They may also "reward"
nonparticipants with contracts for additional oil, natu-
ral gas, or other commodities in short supply
worldwide. Moscow will also probably restrain its
normal inclination to extract the best deal possible in
negotiating with Western governments and firms in
order to avoid the attendant publicity regarding the
cost of doing business with the USSR. Countries siding
with the United States may find the Soviets taking a
hard line when renewing contracts for such com- 25X1
It is highly unlikely that the USSR will take punitive
action involving the abrogation of existing contracts.
To do so, even temporarily, would substantiate long
held Western fears about doing business with the
USSR. Terminating deliveries of natural gas, timber,
coal, and chemicals guaranteed under compensation
agreements would likely preclude for an extended
period Soviet ability to obtain Western participation in
future resource development projects on the com-
pensation basis the Soviets favor. Similarly, Soviet
default on credit obligations would preclude future
Western lending, particularly from private Western
banks which hold the major share of Soviet debt.
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Secret
Statistical Appendix
UNITED STATES: Trade with USSR, 1978
(Millicn U.S. $)
Exports
Imports
To To
USSR
Ercm
Frcn
LESR
Commodity
World US
SR
Share(%)
World
USSR
Stare (%)
FCCDSTUFFS
28709 1
679
5.8
16287
7
0.0
RAW MATERIALS
10765
70
0.7
13491
118
C_9
FUELS
3980
31
0.8
42018
44
C.1
MANUFACTURES
95730
471
0.5
95897
E9
0.1
CTHEF
4476
1
0.0
5595
303
`_.4
US Exports of which Significant Stare Gce_ Tc U.S.S.R
(Banked by USSR Share)
Exports
-------------------------
To
Wcrld
Tc
USSR
USSR
Share(%)
CCFN
5302
1056
19.9
WHEAT
4335
356
E.2
MISC CONSUMER
749
39
NCNFERRCUS ORES
911
37
4.1
SCYEEANS
5868
216
3.7
PETRCLEUM P,FCLUCT
550
19
3.4
TRACTORS
1331
28
2.1
METALWORKING MACHINEFY
1245
26
2.1
ELECTRICAL MEASURIIG EC
2237
40
1.8
LEATHER
318
5
1.7
US Imports of which-Significant Share CcmES Frca U..S.S..R
(Fanked by USSR Share)
Impcrt_
From
Wcrld
Frcm
USSR
USSR
Share (%)
HIDES
247
9
3.7
NCFFEFRCUS CFES
1376
38
2.8
NCNFERR MANUFACTURES
478
7
1.4
CHEMICAL ELEMENTS
4182
33 .
0.8
DIAMCNDS
2224
16
0.7
PETRCLEUM PFCDUCT
7432
40
C.
OTEFR CHEMICAL
544
2
C.4
GLASS
1051
3
0.3
CEUEE MINEFAIS
620
2
0.3
BEVERAGES
1768
4
C.2
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Iq
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FRANCE: Trade with USSR, 1978
(Million U.S. $)
------ -- - -
Exports
---
Im
port-
-
----------------------- --
--------- -- ---------
----
To To
USSR Fr
om From USSR
Commodity
World US
SR
Share (%) Wo
rld USSF Stare (%)
~
P00ESTIiUS
11896
48
0.4 1
1500
40
C.4
RAW MATERIALS
3734
11
0.3
6532
250
3.8
FUELS
2047
3
0.1 1
5937
606
3.8
MANUFACTURES
58488 1
392
2.4 4
7453
229
C.7
OTHER
329
2
0.6
442
C
C.1
-------------
76494 1
455
1.9 8
1865
1225
1.5
- - -------------
French'Expcrts of rhich Significant Share
jRanked by USSR Share)
Goes To
U.S.S.R
Exports
--------------------------
Commodity
Tc
World
To
USSR
USSR
Stare(%)
HEAT/COCL EQUIPMENT
845
128
15.1
METALWORKING MACHINERY
477
43
8.S
MACHINE FARTS
825
61
7.4
PUMES
986
73
7.4
CHEMICAL ELEMENTS
3776
245
6.5
ROCKS, MAGAZINES
602
35
5.8
CTHER INrUSTRIAI MACH
1846
100
5.4
STEEL
4862
251
5.2
ELECTRICAL APPARATUS
915
41
4.5
ELECTRICAL MEASURING EQ
456
20
4.4
French Im?EortE of which Significant Share Comes From U.S.S.F
jRanked by USSR Share)
Imports
--
----------------------------
Frcm
World
From
USSR
USSR
Stare(%)
COTTON
321
99
30.E
PETROLEUM
PRCLUCT
1195
213
17..E
WCCE
681
64
UNFRCUGHT
ALUMINUM
346
32
9.2
CHEMICAL
ELEMENTS
3021
247
E.2
COAL
1346
56
4. 2
PULE
529
19
3. 6
CFUEE FETROIEUM 12058
326
2.7
FISH 812
22
2.7
CRUDE MINERALS 545
14
2-5
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 ITALY: Trade with USSR, 1978
(Million U.S. $)
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Expcrts
I
mpcrts
---------- ---
----------- --------------- -
--------
----------
---------
Commodity
To To
World USSR
USSR F
Share (%) W
rom
orld
From
USSR
USSR
Stare (7~)
FOOISIUFFS
3876 53
1.4
9647
14
C.1
RAN MATERIALS
978 3
0.3
7525.
215
2.9
FUELS
3295 5
0.2
13346
1218
9_1
MANUFACTURES
47633 1072
2.3
243C6
?7
C.4
CTHER
267 0
0.0
291
C
0.1
------ - --------
------- --
------
-------
--------
Italian Expcrts of which Significant Share
(Ranked by USSR Share)
Goes To U.S.S..R
Exports
-------------------------
Tc
To
USSR
Commodity
World
USSR
Share(%)
RICE
213
43
2C.1
METALWORKING MACHINERY
676
81
11.9
MACHINE PARTS
803
90
11.2
STEEL
3151
311
9.9
LEATHER
564
53
9.4
ELECTRICAL MEASURING EQ
123
10
?.2
PUMPS
706
53
7.6
ELECTRICAL MELICAL EC
54
4
7.5
HEAT/CCCL ECUIPMENT
772
51
E.6
POWER GEN EQUIPMENT
265
15
5.F
Italian Imports of which Significant Share Cones Frcu U.S.S.R
(Fanked by USSR Share)
Imports
----------------------------
GAS EIEC
From
Wcrld
65C
Frcm
USSR
312
USSR
Share(%)
47.9
PETRCLEUM
PFCLUCT
1154
174
15.1
COI IO N
379
33
8.7
W O'O D
1193
94
7.9
CCAI
754
55
7.3
CRUDE PETROLEUM 10787
677
6.3
IRCN CRE 941
49
5.3
FERTILIZER 191
9
4.5
NCNFERR MANUFACTURES 77
3
3.7
PIYWCCD 127
5
3.6
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BELGIUM/LUXEMBOURG: Trade with USSR, 197E
(Millicn US $)
Expcrts
Imports
--------------
----------------------------
---- ---
----------
---------
To To
World USS
R
USSR
Share (%)
From
World
From
USSR
USSR
Stare (%)
FCCDSIUFFS
4277
8
0.2
6199
8
C.1
RPW MATERIALS
2259
5
0.2
4275
75
1.8
FUELS
1912
2
0.1
5986
159
2.7
MANUFACTURES
31988 3
14
1.0
28254
58
C.2
CTHEF
4355
21
0.5
3553
169
4.8
------- -----
---
-------- -
-------
--------
--------
EELGIUM Exports of which Significant Share Goes Ic USSR
(Banked by USSR Share)
Expcrts
----------------------------
To
To
USSR
Coumodity
Wcrld
USSR
Share(%)
FUMES
239
21
8.8
STEEL
4849
193
4.C
OIEER CEREALS
167
5
-.C
OIEER CHEMICALS
579
14
2.5
YAFN
567
11
1.9
HEAT/CCCL EQUIPMENT
241
4
1.?
HAND TOOLS
103
2
1.6
GOODS NES
1596
21
1..3
CIFEF INDUSTRIAL MACE
478
5
1.0
CHEMICAL ELEMENTS
2030
21
1.C
BELGIUM Imports of which Significant State Ccmes Frca USSR
(Ranked by USSR Share)
From
Frcm
USSR
Ccmmodity
Wcrld
USSR
Share(%)
CCTTCN
61
11
18.1
WCCD
479
43
?.S
PETROLEUM
PRODUCTS
1146
E9
7.7
FERTILIZER
222
13
5.E
DIAMCNDS
2925
165
5.6
FIG IFCN
106
5
4.5
NCNFERROUS MANUFACTURES
91
4
4.C
CRULE PETROLEUM
3173
57
1.E
FISH
279
5
1.6
CCAI
791
13
1.6
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DENMARK: Trade with USSR, 1978
jMillicn US $)
Exports
Impcrt:
------------
---- - --
- ----------- -----
----------------------------
To
World
To
us SF
USSR
Share (%)
From
World
Frcff
USSF
USSF
Stare (%)
F00ISTUEFS
4203
9
0.2
1845
5
C.2
RAW MATERIALS
701
1
0.1
821
12
1.5
FUELS
298
0
0.0
2303
261
11.3
MANUFACTURES
6442
51
0.8
9720
25
C.3
CTHEF
32
0
0.6
87
C
C.1
TCTAI TRADE
-------
-------
--------
--------
--------
--------
DANISH Expcrts of which Significant
Share
Coe_ Tc
USSR
Ranked by USSR Share)
Exports
-------------------------
Tc To
World USSR
USSF
Staret%)
ELECTRICAL
MEASURING EQ
133 8
`_.9
SHIPS
287 15
5
2
.
HEAT/COCL EQUIPMENT
229 11
5.C
FAEFICS
77 2
3.1
CAR ENGINES
113 2
1.8
OTHER CEREALS
189 3
1. 7
FHCECCFAEHS
42 1
1.6
FIEFES
8 C
1.4
SCIENTIFIC
INSTRUMENTS
.91 1
1.1
ELECTRICAL
MEDICAL EQ
32 0
1_C
DANISH Imports of which Significant Share Comes Ircr USSR
(Ranked by USSR Share)
Imports
---------------------------
Frcm
World
From
USSR
USSR
Share4%)
CRUDE PETROLEUM
782
151
19.3
PETROLEUM PRODUCTS
1231
110
8.9
FIG IFCN
15
1
4_C
WCCD
253
1G
9
IRON ORE
24
1
2.3
FISH
216
4
1.7
FAEFICS
216
4
1.6
CATS
481
8
1.E
CRUDE MINERALS
78
1
1.2
LEATHER
68
1
0.5
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GREECE: Trade with USSR, 1978
(Millicn US $)
Import:
----------------------------
Ccmmcdity
To
World
To
USSF
USSR
Share (%)
Frcm
Wcr1d
Frcm
USSF
USSR
State (%)
FCCISTUEES
1C99
70
6.3
696
3
C.4
RAW MATERIALS
425
10
2.4
525
13
2_6
FUELS
321
1
0.2
1429
228
1E.0
MANUFACTURES
1527
15
1.0
5CC1
2C
C.4
CT EEF
4
0
0.0
3
C
6.5
------------
--------
------ -
--------
--------
--------
GREEK ExFerts of which Significant Share Goes to USSR
(Ranked by USSR Share)
ExFcrts
----------------------------
Commodity
Tc
Wcrld
To
USSR
USSF
Sharei%)
--------- ------------
NCNFEERCUS ORES
58
1C
1-1.2
TOEACCO
214
32
15.C
FRUIT
445
32
7.2
BEVERAGES
45
3
E.E
YARN
24C
11
4.4
ChEMICAL ELEMENTS
45
2
4.3
ECCIS
4
0
2.E
CHIEF CEREALS
55
1
2.7
CRUCE MATERIAL NES
12
C
2.1
LEATHER
74
1
1. E
GREEK Imports of which Significant Share CcuE_ Ercn USSR
(Ranked by USSR Share)
Ccumcdity
Frcm
Wcrld
Frcm
USSR
USSR
Sharcf%)
JEGEIFY
6
1
21.3
CFUEE FETFCIEUM
1180
210
17.E
PIC IRON
7
1
16.C
WCCI
112
11
1C.1
TRANSISTCFS
12
1
8.4
CCAI
23
2
6.1
FIREARMS
3
C
7.3
PETROLEUM PBCDUCTS
224
16
7. 3
FISH
45
2
5.3
TFACTCES
61
1
2.3
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Secret
NETHERLANDS: Trade with USSR, 1978
(Million us $)
Exports
Im
ports
------------ -------------- --
---- --
----------
---------
To To
USSR Er
cm
Frcn
G5SF
Commodity
World USS
R
Share (%) Wo
rld
USSR
!tare (%)
-------- -----
---
------- ---
-----
--------
--------
FCCLSTUFES
11199
26
0.2
8520
12
C.1
RAW MATERIALS
3113
46
1.5
2978
E7
2.2
FUELS
8023
2
0.0
8253
33E
4.1
MANUFACTURES
26959 1
36
0.5 3
1853
61
C.2
CTHEF
857
1
0_1
1438
56
4.0
------ - -----
50149 2
10
0_4 5
3041
535
1_0
NETHERLANES Exports of which Significant Share Gces Tc USSR
(Fanked by USSR Share)
Exports
-------- - ---- -------------
To
World
To
USSR
USSR
Share (%)
HIDES
170
35
20.3
PCWER GIN ECUIPMENT
123
14
11.7
METALWORKING MACHINEFY
72
4
E.2
OTHER CEREALS
141
6
4. 1
PERFUMES
332
11
3-4
TEXTILE MACHINEFY
131
3
2.E
CRUET RUEEER
195
5
2.5
ELECTRICAL MEASURING EQ
210
5
2.3
STEEL
1691
22
1.3
UNWFCUGHT NCNFERRCUS
163
2
1.1
------------------- ----------------------------
.NETHERLANDS Imports of which Significant Share CCIES FICU USSR
(Banked by USSR Share)
From
World
Frcm
USSR
USSR
Share (%)
CCTTCN
45
9
19-5
PETROLEUM
PFCLUCTS
1660
324
19.5
UNWRCUGHT
COPPER
39
7
17.9
DIAMONDS
593
56
9.4
WCCC
712
32
4.6
IRCN CFE
124
5
4.2
FERTILIZER
97
4
4.2
PULP
230
6
2.E
FISH
239
5
2.2
CHEMICAL ELEMENTS 1814
24
1.3
Approved For Release 2008/09/17: CIA-RDP08SO135OR000100160002-8
 Approved For Release 2008/09/17: CIA-RDP08SO135OR000100160002-8
NORWAY: Trade with USSR, 1978
(Millicn US $)
Exports
Impcrts
Ccmmodity
To
World
To
USSR
USSR
Stare(%)
From
Wcrld
From
USST
USSR
Share(%)
FOOLSTUEES
538
1
0.1
921
3
C.3
RAW MATERIALS
1812
1
0.0
605
4
0.6
FUELS
20E8
5
0.2
1353
83
( .1
MANUFACTURES
5187
82
1.6
8524
12
C.1
CTEER
31
0
0.5
32
C
C.0
----------- -
--------
NORWEGIAN Exports of which Significant Share Goes To USSR
(Banked by USSR Share)
Exports
------------- ------
Commodity
World
VEGETABLES
1 C
23.7
OTEER INDUSTRIAL MACH
155 35
22.4
FAEFICS
26 3
10..4
CHEMICAL ELEMENTS
210 12
5S
PAPER
433 22
`-.1
ELECTRICAL MEASURING EQ
20 1
4.9
LEATHER
20 1
4. E
GCCDS NES
1 C
4.`
PAINTS
42 1
2.8
COMPUTERS
32 1
2. `
NORWEGIAN Imports of which Significant Share Come: Ercm USSR
;(Ranked by USSR Share)
From
World
From
USSR
USSR
Sharel%)
IRON ORE
3
1
24.---
CRUDE PETROLEUM
629
68
8. 2
FISH
27
2
8.0
UNWROUGHT ALUMINUM
11
1
7.4
GAS, ELECTRICITY
3
4_S
CRUDE RUBBER
1
4.8
FERTILIZER
25
1
4. 1
HILES
8
0
3.8
PETROLEUM PRCDUCTS
384
12
3.1
COSTON
4
0
2.0
Approved For Release 2008/09/17: CIA-RDP08SO135OR000100160002-8
 Approved For Release 2008/09/17: CIA-RDP08SO135OR000100160002-8
Secret
PORTUGAL: Trade with USSR, 1978
(Million US $)
ExFcrts
ImFcrts
--------------
-------------------------
----------------------------
To To
USSR
From
from
USSR
Commcdity
World US
SR
Sharej%)
Wcrld
USSE
Share(%)
-------------
- ----
----
------ - -
------- -------
--------
FOOISTUEFS
364
27
7.5
849
6
C.7
RAW MATERIALS
274
1
0.3
497
5
1.0
FUELS
42
0
0.0
816
82
- IC.0
MANUFACTURES
1657
12
C.7
2933
3
C:1
OTEER
91
0
0.0
47
C
C.0
TCTAI TRACE
2429
40
1.7
5142
95
1.9
--------------
- - --- --------------- --- - ------
- ----------------
PORTUGUESE Exports cf which Significant Share Goes To USSR
(Banked by USSR Share)
ExFcrts
-------------
Commodity
To
World
To
USSR
USSR
Share(%)
VEGETABLES
66
21
31.c
TRAINS
5
1
24.3--
CHEMICAL ELEMENTS
9
1
7.4
FCCTWEAF
63
4
5.(
NONFERROUS MANUFACTURES
10
1
5._
FISH
84
3
3.4
FRUIT
17
0
2.9
CRUDE MATERIAL NES
18
C
2.
BEVERAGES
163
3
1.7
FABRICS
156
3
1.7
PORTUGUESE ImForts of which Significant Share Cones Ercm USSR
(Ranked by USSR Share)
ImForts
----------------------------
Frcm
World
from
USSR
USSR
Sharell)
CRUDE PETROLEUM
649
81
12.5
FISH
58
6
9.7
IRON CBE
21
1
5.3
FERTILIZER
8
0
4.3
TOYS
11
C
2.2
COTTON
155
3
2.2
FARES
39
1
1.7
CRUDE MINERALS
42
C
1.2
TRACTORS
48
C
C.9
JEWELRY
0
0
0.8
Approved For Release 2008/09/17: CIA-RDP08SO135OR000100160002-8
 Approved For Release 2008/09/17: CIA-RDP08SO135OR000100160002-8
Major COCOM Countries:
Trade With the USSR,
Jan-Sep 1979
To World
(Billion US $)
To USSR
(Billion US $)
USSR Share'
(Percent)
From World
(Billion US $)
From USSR
(Billion US $)
USSR Share'
(Percent)
Major COCOM
556.6
10.3
1.8
595.3
8.4
1.4
United States
130.2
2.5
1.9
157.8
0.5
0.3
Canada
41.5
0.3
0.8
44.4
NEGL
0.1
Japan
74.3
1.9
2.5
77.9
1.3
1.7
France
71.8
1.5
2.1
76.1
1.2
1.6
Italy
50.0
0.8
1.6
51.9
1.3
2.6
United Kingdom
65.1
0.7
1.0
73.4
1.2
1.7
West Germany
123.7
2.6
2.1
113.8
2.7
2.4
Approved For Release 2008/09/17: CIA-RDP08SO135OR000100160002-8
 Approved For Release 2008/09/17: CIA-RDPO8SO135OR000100160002-8
Secret
Selected Western Countries:
Share of Total and Energy
Imports From the USSR, 1978
Total
Imports
Of which:
Energy
Of which:
COCOM '
1.4
3.0
4.0
4.4
7.9
6.5
United States
0.3
0.1
0
NEGL
0.5
0
Canada
0.1
0
0
0
0
0
Japan
1.8
0.7
4.3
0
2.3
0
Belgium/Luxembourg
1.0
2.7
1.6
1.8
7.7
0.1
Denmark
2.0
11.3
0
19.3
8.9
0
France
1.5
3.8
4.2
2.7
17.8
0.6
Greece
3.5
16.0
8.1
17.8
7.3
0
Italy
2.8
9.1
7.3
6.3
15.1
47.9
Netherlands
1.0
4.1
0.7
0.2
19.5
0.1
Norway
0.9
6.1
0
8.2
3.1
4.9
Portugal
1.9
10.0
0
12.5
0
0.5
United Kingdom
1.7
5.5
5.3
3.9
12.7
0.1
West Germany
2.1
4.0
1.9
0
12.7'
0.1'
Austria
2.0
28.1
18.2
24.3
1.2
85.5
Finland
18.8
66.4
36.1
66.1
86.6
79.5
Ireland
0.7
5.3
0
0
8.9
0
Spain
0.6
1.0
3.1
0.9
2.3
0.1
Sweden
2.7
13.5
17.9
7.7
19.3
0
Switzerland
2.2
21.7
3.5
6.5
28.5
0
' Excluding data for Turkey.
' West German natural gas imports are included under oil products.
Approved For Release 2008/09/17: CIA-RDPO8SO135OR000100160002-8
 Approved For Release 2008/09/17: CIA-RDPO8SO135OR000100160002-8
Selected Western Countries:
Value of Total and Energy
Imports From the USSR, 1978
I
Total
mports
Of which:
Energy
Of which:
COCOM ' 1
0,031
4,521
277
1,853
2,062
326
United States
540
44
0
3
40
0
Canada
26
0
0
0
0
0
Japan
1,409
207
133
3
70
0
Belgium/Luxembourg
469
159
13
57
89
1
Denmark
302
261
0
151
110
0
France
1,225
606
56
328
213
8
Greece
264
228
2
210
16
0
Italy
1,535
1,218
55
677
174
312
Netherlands,
535
338
2
12
324
NEGL
Norway
102
83
0
68
12
3
Portugal
95
82
0
81
0
NEGL
United Kingdom
1,320
511
9
263
239
NEGL
West Germany
2,489
784
7
0
775'
2 2
3,308
2,604
177
1,087
1,038
302
6
0
0
0
0
0
608
482
50
201
4
227
Finland
1,475
1,160
94
691
300
75
Ireland
48
38
0
0
38
0
Spain
112
55
7
44
4
0
Sweden
549
451
24
123
304
0
Switzerland-
516
418
2
28
388
0
' Excluding data for Turkey.
' West German natural gas imports are included under oil products.
Approved For Release 2008/09/17: CIA-RDPO8SO135OR000100160002-8
 Approved For Release 2008/09/17: CIA-RDP08SO135OR000100160002-8
Secret
Selected COCOM Countries:
Dependence on the USSR for
Various Metals and Minerals, 1978
United Japan France Italy United West
States Kingdom Germany
Chromium/
Chrome Ore
14 6 9 4 0 11
Platinum
1 52 13 2 6 14
32 82 78 NA NA 31
17 48 9 NA NA NA
Approved For Release 2008/09/17: CIA-RDP08SO135OR000100160002-8
 Approved For Release 2008/09/17: CIA-RDP08SO135OR000100160002-8
Estimated Western Financial
Exposure to the USSR,'
(As of 30 June 1979)
Commercial
Bank
Government
Guaranteed
Total
Exposure
0.4
0.4
.0.8
0.4
2.7
3.1
Italy
0.9
2.4
3.3
United Kingdom
2.8
1.2
4.0
West Germany
1.6
3.9
5.5
Switzerland
0.8
0.2
1.0
Other'
2.4
0.4
2.8
Total
12.8
16.1
28.9
'The estimates of country financial exposure to the USSR differ
from our estimates of Soviet external debt at yearend 1978
($17.2 billion of which $10.3 billion is owed to private lenders and
$6.9 billion to official lenders) for the following reasons:
(a) commercial bank lending statistics include loans to CEMA's
International Investment Bank (IIB) and International Bank for
Economic Cooperation (IBEC);
(b) government-guaranteed totals include both drawn credits and
undrawn commitments on signed contracts.
7 Estimated from statistics reported by the Berne Union which
include both credit principal and future interest payments. We
decapitalized these data by assuming average credit terms of eight
year maturity and 7.2-percent interest rate.
' Including Canada, Denmark, Finland, the Netherlands, Norway,
Spain, and Sweden. We lack adequate data to distribute these by
lender for the commercial banks. However, Canadian and Swedish
Government bank loans are $0.1 billion and $1.2 billion respectively.
The other government backed loans are less than $50 million each.
Approved For Release 2008/09/17: CIA-RDP08SO135OR000100160002-8
 Secret
Secret
Approved For Release 2008/09/17: CIA-RDP08SO135OR000100160002-8
Approved For Release 2008/09/17: CIA-RDP08SO135OR000100160002-8