MAJOR NATO ALLIES: PERSPECTIVES ON THE SOVIET UNION

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87T00495R001001110008-9
• Release Decision: RIPPUB
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• Document Page Count: 28
• Document Creation Date: December 22, 2016
• Document Release Date: August 5, 2010
• Sequence Number: 8
• Publication Date: September 1, 1985
• Content Type: NIE

Central
Intelligence
Major NATO Allies:
Perspectives on the
Soviet Union
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NIE 20/11-85
September 1985
COPY
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NIE 20/11-85
MAJOR NATO ALLIES:
PERSPECTIVES ON THE
SOVIET UNION
Information available as of 22 August 1985 was used in the
preparation of this Estimate, which was approved by the
National Foreign Intelligence Board on 22 August 1985.
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THIS ESTIMATE IS ISSUED BY THE DIRECTOR OF CENTRAL
INTELLIGENCE.
THE NATIONAL FOREIGN INTELLIGENCE BOARD CONCURS,
EXCEPT AS NOTED IN THE TEXT.
The following intelligence organizations participated in the preparation of the
Estimate:
The Central Intelligence Agency, the Defense Intelligence Agency, the National Security
Agency, and the intelligence organizations of the Departments of State,
Commerce, Energy, and the Treasury.
Also Participating:
The Assistant Chief of Staff for Intelligence, Department of the Army
The Director of Naval Intelligence, Department of the Navy
The Assistant Chief of Staff, Intelligence, Department of the Air Force
The Director of Intelligence, Headquarters, Marine Corps
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SCOPE NOTE ...................................................................................... 1
KEY JUDGMENTS .............................................................................. 3
DISCUSSION ........................................................................................ 9
Forces Shaping Allied Perspectives on the Soviet Union........... 9
Transatlantic Differences ..................................................... 9
Underlying Political and Security Attitudes ....................... 10
The Economic Dimensions of Allied Relations With
Moscow .............................................................................. 16
Implications for the United States ............................................... 19
Security Issues ....................................................................... 19
Economic Issues .................................................................... 20
Other Issues ........................................................................... 22
Additional Factors Affecting Prospects for Accommodating
US-Allied Differences on East-West Issues ............................. 24
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 Despite their shared commitment to Alliance solidarity in counter-
ing the expansion of Soviet military power as demonstrated by the
Alliance's initial success in deploying INF, the governments of Margaret
Thatcher, Francois Mitterrand, Helmut Kohl, Bettino Craxi, and Brian
Mulroney operate within sets of constraints that are conditioned by
their countries' history, sense of national purpose and identity, security
needs, and domestic political and economic needs. These fundamentally
differing outlooks shape the way these Allied leaders deal with the
Soviet Union and affect their positions and priorities on a host of East-
West issues that have significant implications for US policymakers. This
National Intelligence Estimate examines these underlying political and
economic attitudes toward the USSR and assesses the degree to which
Allied positions are susceptible to change in response to US policies and
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We expect both the number and intensity of disputes between the
United States and its major NATO Allies-France, West Germany,
Great Britain, Italy, and Canada-over East-West matters to rise or at
best to remain the same over the next three to five years. This judgment
rests on our view that the disagreements between the United States and
its Allies over East-West issues result both from differences in percep-
tions of the USSR and in policy priorities. The issues likely to be the fo-
cus of contention include:
- The implications of the Strategic Defense Initiative (SDI) for
East-West relations and for NATO's defense policy-particular-
ly for the continued coupling of US and European security-
and for the future credibility of British and French nuclear
forces.
- The terms and extent of Allied participation in SDI research
and the degree to which US technologies are shared.
- The enforcement and extension of controls
transfer of sensitive technologies to the East.
- The pace of NATO's efforts to improve
defenses.
- The future course of the arms control process, particularly its
implications for the completion of INF deployments.
- The possible expansion of East-West trade.
- The potential use of economic sanctions to induce changes in
Soviet behavior.
The United States and its major NATO Allies continue to share a
common commitment to countering the expansion of Soviet military
power and indeed have taken steps to strengthen their defenses,
foremost among these INF deployments. The root causes of disagree-
ments between them, however, are unlikely to disappear because the
United States and its Allies approach policies toward the USSR from
different security and economic perspectives:
- Security Perceptions:
- The West European Allies believe that their proximity to the
Soviet Union gives them a greater stake than the United States
in avoiding yet another, even more devastating, war on
European soil.
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 - The Allies also believe that the disparity of power between
themselves and the United States causes them to have little
leverage over US policies towards the USSR, even though their
vital interests are at stake.
- Finally, the Allies are more prone than the United States to see
Soviet actions as the outcome of Moscow's insecurities than as
the result of an aggressive, ideological drive to expand.
Coupled with their concerns about the buildup of Soviet
forces, the effectiveness of Western deterrence, and the
unappealing prospect of expending enough resources to re-
dress the military imbalance in Europe, this perspective leads
them to emphasize the importance of arms control as a way of
avoiding conflict.
Promoting detente with Moscow, stabilizing relations with
Eastern Europe, and aiding their own economies remain the
overriding justifications for continuing East-West trade.
Some Allied leaders, especially in France and Canada, hope
that increased exports to the East Bloc will help stimulate their
own economies, thereby providing capital to help narrow the
technology gap between themselves and the United States and
Japan.
- In addition, most Allied countries now have domestic constitu-
encies with financial interests in continuing, even expanding,
economic ties with Moscow. At the moment, trade with the
Soviet Union and Eastern Europe constitutes a small and
declining percentage of overall Allied trade, but it is signifi-
cant for certain industries and firms. The East Bloc markets
also serve as convenient outlets for the surplus production of
declining Allied steel and heavy manufacturing industries that
cannot compete elsewhere and are suffering from high levels
of unemployment.
These differences could become more significant during the next
several years because we believe that the Soviets recognize and will be
better able to exploit them. The succession of Mikhail Gorbachev to the
leadership of the Soviet Union portends a period of more dynamic
Soviet foreign policy. Moscow will undoubtedly use Gorbachev's consid-
erable diplomatic and public relations skills to further its goals among
NATO members in the coming years.
Beneath all of these differences are deeply held political and
security attitudes that shape each countries' approach to relations with
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the USSR. Changes at this level occur only slowly and are bounded by
the constraints of each country's history, sense of national purpose and
identity, security needs, and domestic political situation. Within those
limits, however, we note several encouraging signs that may improve
the prospects for accommodating US-Allied differences over approaches
to East-West issues:
- The greatest change has occurred in France, where strategic
nuclear parity between the superpowers, the vulnerability of the
French nuclear deterrent, and concern about a possible West
German slide toward neutrality have combined to weaken
traditional Gaullist emphasis on French "equidistance" vis-a-vis
the superpowers. President Mitterrand's desire for closer coop-
eration with NATO (short of full military integration), his
commitment to modernizing French nuclear forces, and his
deep suspicion regarding Soviet intentions in Europe and in
many Third World countries are widely shared within center-
right and socialist circles. Moreover, these shifts in French
security policies toward greater cooperation with the Alliance,
although they have not altered deeply held French desires for
national independence and international stature, are likely to
outlast Mitterrand's tenure in office.
- In Italy, Prime Minister Bettino Craxi has combined strong
support of NATO with a generally tough line on East-West
issues and a firm stance on defense matters. He is particularly
concerned about Italy's vulnerability to threats from the Medi-
terranean-primarily the increased Soviet regional naval
strength and the instability and unpredictability of certain
regimes, most notably that of Libya's Qadhafi. Craxi's belief
that Italian support for US policy initiatives will best ensure
Italy's defense and preserve its place among the major Europe-
an powers is completely supported by his Republican Defense
Minister Spadolini but may not be as dominant in a succeeding
coalition. Italy's heightened sense of vulnerability to Soviet
threats from the south, however, is unlikely to disappear.
- Since coming to office in September 1984, Canadian Prime
Minister Brian Mulroney has restored to Canada's foreign policy
the primacy of good relations with Washington and the NATO
Alliance. He is prepared modestly to strengthen Canada's
contribution to Western defense. Mulroney's ability to change
Canadian policies further or to deliver Ottawa's support of US
initiatives in the future may be constrained, however, by the
Canadian economic conditions and the public's desire-mir-
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rored in the country's administrative bureaucracy-for policies
that appear independent from Washington and demonstrate
Canada's commitment to peace and disarmament. Although
Mulroney's views are not shared completely even within his
own party and may not represent a permanent change in
Canadian foreign policy, his government is expected to last at
least until the next national elections, which must be scheduled
no later than the end of 1988.
- The current Governments of Great Britain and West Germany
have strengthened their countries' suppor NATO. Under the
leadership of Margaret Thatcher, Britain
spite pressing economic problems,
remains committed to modernizing its nuclear deterrent over
the next several years. West German Chancellor Helmut Kohl
e beieves that
Allied confidence in German reliability strengthens his hand in
dealing with the Soviets. However, both London and Bonn are
also tempted to serve as intermediaries between Moscow and
Washington to demonstrate publicly some progress in ameliorat-
ing East-West tensions and to undercut support for their
opposition parties.
- Finally, the widespread West European recognition of their
technological lag behind the United States could provide Wash-
ington opportunities to strengthen transatlantic economic links,
especially if SDI becomes a shared Allied initiative.
At the same time, a number of developments are possible during
the next three to five years-and beyond-that would make prospects
for accommodating US-Allied differences on East-West matters sub-
stantially worse:
- The coming to power of either the British Labor Party or the
West German Social Democratic Party would be among the
most negative European developments for Allied cohesion vis-a-
vis the USSR and would be especially damaging for Alliance
security policies.
- The British Labor Party is profoundly antinuclear-from its
leadership through its rank and file. Although moderates
might have a stronger voice in a Labor government than they
do while the party is in opposition-especially if it were
forced to rely on Social Democratic or Liberal support-we do
not believe that party leader Kinnock would alter his support
for complete nuclear disarmament. The next elections need
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 not be held before 1988, but, at the moment, Labor leads in
public opinion polls and has at least a fair chance of achieving
power in this decade.
- The West German Social Democratic Party has adopted
policies that would substitute arms control for military
strength as the foundation of Western security. To become a
viable contender in national elections (which need not be held
before 1987), the SPD Chancellor candidate would probably
have to moderate his attitudes, but he would face continuing
difficulties uniting the party behind this new stance. We
believe it highly unlikely, however, that the SPD could reenter
government except in coalition with the Christian Democrats
changes in West German policies would
probably not as far reaching as the SPD currently proposes.
- Another development that would adversely affect the prospects
for Allied accommodation on East-West matters would be a
breakdown in the arms control talks in Geneva due to perceived
US inflexibility. In the absence of a comprehensive arms control
pact with deep cuts in both ICBMs and INF, continuing the
formal process of negotiations, even if just for the sake of
negotiating, will be preferable to Allied governments than no
talks at all.
- In the economic field, the most divisive issue is the safeguarding
of sensitive technologies. Although our major NATO Allies
support the concept of COCOM controls, they believe that only
items of demonstrated strategic importance should be barred
from export to the East. Where the stakes are seen as primarily
economic and the security risks are less distinct, they will
strenuously oppose any US effort to develop a comprehensive
Western approach-especially in areas in which they hope to
improve their ability to compete with the United States and
Japan.
- Finally, if the Allies were to develop a perception that the
United States is not responding to their needs in other areas-in
dealing with trade issues, for example-settling differences on
East-West matters would become more difficult.
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FORCES SHAPING ALLIED PERSPECTIVES ON
THE SOVIET UNION
Transatlantic Differences
1. Although they share a common commitment to
countering the expansion of Soviet military power, the
United States and its major NATO Allies-France,
West Germany, the United Kingdom, Italy, and Cana-
da-have often differed significantly on East-West
issues. Many of these disagreements stem from funda-
mental differences in perspective that are unlikely to
disappear:
- The West European Allies believe that their
proximity to the Soviet Union gives them a
greater stake than the United States in avoiding
yet another, even more devastating, war on
European soil. From their own perspective,
therefore, West Europeans believe they place
more emphasis than does Washington on deter-
rence over war fighting and on arms control over
military force improvements.
- The disparity of power between the Allies and
the United States is another source of transatlan-
tic friction. Despite the potentially catastrophic
consequences of armed conflict, the Allies have
little leverage over the relationship between
Washington and Moscow. In addition, they fre-
quently believe their views are not understood or
given adequate weight in Washington and that
US policies are sometimes inconsistent. The Allies
expect to wield less influence in Moscow, so their
frustration is often less than in their dealings with
Washington. Nonetheless, they believe that
maintaining frequent contacts with the Soviets
gives them some ability to affect Soviet policies.
- Unlike the United States', West European inter-
ests are predominantly regional in scope. This
tends to make the benefits of detente-increased
trade and human contact with Eastern Europe-
weigh more heavily, while it limits Allied con-
cerns about Soviet actions elsewhere in the world.
In any event, because Allied military power is
primarily confined to Europe, the range of possi-
ble West European responses to Soviet activities
outside of Europe is largely narrowed to nonmili-
tary measures.
2. Nonetheless, most West European governments
and publics regard the Soviet Union as the primary
threat to global stability. The buildup of Soviet mili-
tary forces over the past 15 years, particularly the
growing deployment of intermediate-range SS-20s, has
caused particular concern about Soviet intentions in
Europe. However, more West Europeans than Ameri-
cans see Soviet actions as the outcome of Moscow's
insecurities rather than as the result of an aggressive,
ideological drive to expand. These Europeans regard
the USSR as an empire in deep trouble, beset by a
historical paranoia about foreign invasions, saddled
with a poorly managed economy drained by excessive
military spending, and faced with potentially explo-
sive discontent among its subject nationalities and in its
East European allies.
3. Although most West Europeans agree that the
Soviet Union faces serious political and economic
difficulties, individual leaders are not united about
what those internal Soviet weaknesses imply for their
own security policies or for that of NATO as a whole:
- One group-which includes West Germany's
Helmut Kohl, France's Francois Mitterrand,
Italy's Bettino Craxi, and Britain's Geoffrey
Howe-is wary of Soviet intentions, whether
Moscow's military force buildup is sparked by
internal weaknesses or by ideology. They believe
that Soviet actions can only be countered by a
solid Western alliance, rooted in military
strength. At the same time, this group stresses the
importance of arms control to reassure the Sovi-
ets of peaceful Western intentions and, along
with trade and other inducements, to give the
Soviets a larger stake in European stability.
- A second group-which still includes Italy's Gio-
vanni Spadolini and, to some extent, Canada's
Brian Mulroney and Britain's Margaret Thatcher
(although her advisers are urging her to shift to
the first camp)-views the Soviet Union as pri-
marily an expansionist ideological power willing
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 to use military force if necessary to improve its
position in the world. Like the first group, this
group recognizes internal Soviet weaknesses but
sees them as additional motivation for an aggres-
sive Soviet foreign policy. Arms control is seen by
this group as a useful method of managing
superpower tensions, but it places little faith in
the ability of trade and other exchanges to
encourage better Soviet behavior.
- A third school of thought-perhaps best personi-
fied by Britain's Neil Kinnock or West Germany's
Oscar LaFontaine-believes that the West must
reassure Moscow of NATO's defensive purposes
by substituting arms control and nuclear disarma-
ment in place of the Alliance's traditional empha-
sis on military strength as the foundation of
Western security. They believe that this change,
together with broadened trade and other East-
West exchanges, will reduce Soviet insecurities
and dissipate any aggressive intentions Moscow
might harbor toward Western Europe. In effect,
most members of this group, and Kinnock in
particular, reject their countries' participation in
nuclear deterrence.
Underlying Political and Security
Attitudes
4. Beneath these broad perspectives on the Soviet
Union that cut across Allied boundaries are attitudes
that are to some degree unique in the case of each ally:
France's policies are strongly influenced by its long-
standing quest for national independence and interna-
tional status; West Germany's by its need for protec-
tion from Soviet aggression even while it seeks closer
relations with East Germany; Britain's by its anti-
Soviet attitudes, although it is tempted to mediate
between Moscow and Washington; Italy's by a deter-
mination to preserve its place among the major Euro-
pean powers; and Canada's by a desire to avoid the
appearance of blindly following the United States.
France: Striving for Independence and Status
5. A desire to demonstrate France's independence,
both within the Alliance and in a global context, and to
enhance its international status has marked French
security policy since at least the early 1960s. The
cornerstone of that policy-which has always identi-
fied the Soviet Union as France's greatest military
threat-has been the maintenance of a nuclear deter-
rent capability exclusively under French control. The
rationale for the development of the force de frappe-
even while France retained an ambiguous status in the
North Atlantic Treaty Organization (NATO)-was
rooted in de Gaulle's skepticism that the United States
would risk its heartland in defense of Western Europe.
The French believed that their nuclear forces, target-
ed against Soviet cities, were a viable deterrent to
Soviet aggression because they could inflict damage on
the USSR disproportionate to any benefit that Moscow
could receive by attacking France. At the same time,
in order to demonstrate its commitment to remaining
outside the control of either superpower, Paris pursued
a broader relationship with Moscow in trade, scien-
tific, and cultural exchanges.
6. The environment in which French security poli-
cy operates, however, has shifted significantly from
that which existed at the time of de Gaulle:
- US nuclear superiority in strategic systems has
declined to the present state of superpower pari-
ty wherein the Soviets seek to continue shifting
the military component of the correlation of
forces in their favor.
- The credibility of the French nuclear deterrent
has slipped, in the words of one French theoreti-
cian, to "the limit of believability.-
- The number and accuracy of the Soviet SS-20s
installed in Europe have rendered French land-
based missiles and bombers increasingly vul-
nerable to quick elimination in any Soviet first
strike.
- The nuclear-armed submarine fleet also has
become increasingly vulnerable to Soviet detec-
tion and attack.
- Equally disturbing to the French is their percep-
tion of a West Germany plagued by a pacifist
movement that sees closer ties with the East as a
means of overcoming the division of Germany.
The French believe that Germany could only be
reunified if it were neutral or dominated by the
Soviet Union. They further believe that, if this
were to happen, the West German political and
military buffer would disappear, and France's
frontline defenses would rest on the Franco-
German border.
- These French security concerns have been con-
firmed in recent years by those Soviet actions-
including the continuing buildup of Soviet mili-
tary forces, the invasion of Afghanistan, and
Moscow's role in suppressing the Solidarity trade
union movement in Poland-that have precipi-
tated more widespread worries about Soviet ag-
gressive intentions in Europe.
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7. These changes in the strategic environment have
dramatically altered France's tendency to stand rela-
tively alone-to the point where President Francois
Mitterrand, appearing before the West German Bun-
destag in 1983, urged European solidarity with the
Americans in the deployment of intermediate-range
nuclear forces (INF). Moreover, Mitterrand's policy of
closer cooperation with NATO, his commitment to
modernizing French nuclear forces, and his deep
suspicion regarding Soviet intentions are now widely
shared within both center-right and socialist circles.
The Socialists realize that any perceived weakness on
national defense would be a significant political wind-
fall for the opposition in the 1986 legislative elections.
Mitterrand's harder line toward the Soviets is further
supported by much of the French intelligentsia, who
have become thoroughly disillusioned by Moscow's
failure, among other things, to live up to the human
rights provisions of the Helsinki accords. Furthermore,
the French Communist Party (PCF) has suffered
serious electoral setbacks in part because of its close
identification with Soviet foreign policies. Nonetheless,
for reasons both of domestic and international politics,
Paris is determined to maintain its independent chan-
nels of communication with Moscow
Alliance's confidence in German reliability and pre-
dictability strengthens his ability to deal effectively
with Moscow. In thinly veiled allusions to the opposi-
tion Social Democratic Party (SPD), Kohl denies that
his government "wanders between East and West,"
and he rejects the vague SPD notion of a "security
partnership" with the USSR.
10. Nonetheless, the Kohl government has felt com-
pelled to demonstrate that it, too, can maintain a
dialogue with the Soviets0 In line with
this objective, the government stresses its commitment
to detente, its desire for an arms control agreement
that would reduce or eliminate INF deployments, and
its determination to maintain the continuity of the
Schmidt government's Ostpolitik.
11. These objectives have led a number of West
German politicians to play an intermediary role be-
tween East and West, primarily on arms control and
security issues. The Kohl government generally has
defended Alliance positions
while encouraging Soviet flexibility. The
West Germans-including the Social Democratic op-
position leaders-also use their cont cts to probe for
signs of change in the Soviet positions
12. Another of Bonn's objectives in its bilateral
meetings with Moscow-and a deeply emotional issue
in West Germany-is to increase the number of ethnic
Germans permitted to emigrate from East to West.
The Soviet refusal to permit a higher rate of emigra-
tion worsens the Soviet image in West Germany and-
given the political influence of emigre groups-often
hampers the conservatives' ability to deal with the
Soviets.
13. The Kohl government's foreign policies have
also been affected by the attractiveness to a segment of
German voters of the positions taken by the opposition
Social Democratic Party (SPD) and, to a lesser extent,
by the Green Party. Both have adopted policies that
promise security through arms control and disarma-
ment rather than military strength. Although denying
that their positions would render West Germany
neutral on East-West matters, these opposition parties
clearly favor greater accommodation of Soviet inter-
ests in Eu ope to facilitate closer relations with East
Germany.
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West Germany: Balancing Protection and
Reconciliation
8. West German postwar foreign policy has com-
bined two objectives that are fully compatible only in
a period of US-Soviet detente. First, the Federal
Republic has sought protection from Soviet aggression
and stability through a close alliance with the West.
Second, it has sought reconciliation-and pledged
eventual reunification-with East Germany. The first
objective clearly dominated Bonn's policies during the
time of Konrad Adenauer. Subsequent governments,
and especially the SPD-led government of Willy
Brandt, began more actively to pursue Ostpolitik. A
majority of West Germans support the goal of recon-
ciliation with East Berlin and believe that progress
toward that end requires Bonn to maintain amicable
relations with Moscow.
9. In keeping with the Christian Democratic tradi-
tion, West German Chancellor Helmut Kohl regards
the Soviet Union as the principal threat to West
German security interests. He has firmly supported
West Germany's participation in NATO
He believes that the
Although these 25X6
particu ar SPD policies are still viewed with apprehen-
sion by most Germans, they nevertheless respond to an
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increasing national assertiveness in German political
thinking. The SPD's security policies hold special
appeal among that generation of West Germans now
in their late twenties and thirties and, therefore,
complicate Kohl's ability to pursue his foreign policy
objectives.
Great Britain: Anti-Soviet But Tempted To Mediate
Between the Superpowers
14. London's traditional attitude toward the USSR
is marked by confidence in its ability to understand
both the Russian past and the exigencies of present
Soviet policies. It is an attitude rooted in a long
historical memory and, indeed, the British often point
to elements of continuity between Czarist and Soviet
geopolitical imperatives. Unlike other major NATO
Allies, London has had few outstanding bilateral issues
to settle with Moscow. Levels of trade are compara-
tively low, and, except for official diplomatic ex-
changes, the British have relatively little contact with
the Soviet Union. This distance, the British believe,
gives them an objectivity and impartiality when assess-
ing the Soviet Union. Furthermore, because of the
special relationship Britain has with the United States,
London sees itself in an ideal position to interpret the
Kremlin's positions and pronouncements to Washing-
ton. Despite fervent denials, British Prime Ministers of
both major parties are probably tempted to explain the
Americans to Moscow as well.
15. This professed pragmatism toward Moscow has
not obscured London's view of the political and
military threat posed by the Soviet Union. A stalwart
supporter of the North Atlantic Alliance, Britain has
maintained a relatively high level of defense expendi-
tures (see figure 2) and has developed and deployed its
own independent nuclear deterrent.
16. Margaret Thatcher appears to follow squarely
in this British tradition, although the almost visceral
hostility towards Communism that found expression in
her first term continues to help shape her outlook:
- Under her leadership, Britain has firmly support-
ed the deployment of INF to counter the grow-
ing number of Soviet SS-20s, encouraged the
development of a small out-of-area capability in
part to counter Soviet moves, and committed
itself-in spite of pressing economic problems-
to continue the modernization of its nuclear
deterrent over the next several years
- Since 1983, however, the Thatcher government
has stepped up bilateral contacts with the Soviet
Union and Eastern Europe. Thatcher is con-
Figure 2
Allied Defense Expenditures, 1975-84
United
Kingdom
West
Germany
Th486 885
vinced that her anti-Communist credentials give her
credibility in Washington as a tough bargainer. She
may also see a particular role for herself because of her
personal acquaintance with Mikhail Gorbachev before
his accession to power.
17. In pursuing these contacts, Thatcher has been
prodded increasingly by Foreign Secretary Howe and
Foreign Office professionals anxious to counter
charges that her policies are too close to Washington's
and motivated purely by ideology. She has already
used SDI-particularly in working out the four points
at Camp David-to play a mediating role in the
international arena. Another inducement toward such
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efforts is her desire to preserve support for Britain's
defense budget, especially the Trident nuclear mod-
ernization program. In addition, Thatcher is deter-
mined to undercut support for the Labor Party-
which polls show slightly ahead of both the Conserva-
tive and Social Democratic-Liberal Alliance-and
Labor's pledge of unilateral disarmament, which has
shattered the nuclear consensus in Britain.
Italy: Keeping a Seat at the Table
18. As the fourth-ranking power among Western
Europe's Big Four, Italy has sought to justify and
retain its place among the major powers of Europe.
The country's participation in NATO and membership
in the European Community quickly became the twin
pillars of those policies, providing for Italy's defense
against the Soviet Union with minimal expense (see
figure 2) and ensuring West European aid in develop-
ing and expanding the Italian economy. Through the
mid-1970s, these two organizations were widely ac-
cepted within Italy, although the degree of enthusiasm
for each varied among political factions. In general,
Italy's attention was not focused on the threat from
Moscow, and foreign and defense policies took a back
seat to domestic economic concerns.
19. Beginning in the mid-1970s, however, a number
of factors combined to undermine Italian confidence
in their two-pronged approach to international affairs:
- On the security side, doubts about the reliability
of the United States gradually increased after the
United States withdrew from Vietnam and the
implications of Moscow's strategic nuclear gains
began to be understood. In Italy, these doubts
were reinforced by a growing sense of threat
from the Mediterranean-primarily the in-
creased Soviet regional naval strength and the
instability and unpredictability of certain re-
gimes, most notably that of Colonel Qadhafi of
Libya.
- On the economic side, the 1974 oil embargo
jolted Italians even more than other Europeans
into a sudden awareness of their economic vul-
nerabilities and added to their sense of insecuri-
ty. Worries about Italy's economic future in-
creased just as the European Community,
plagued by budgetary disputes and difficulties in
assimilating new members, offered less and less
promise as a means of promoting economic
growth and development.
Concerns about the effectiveness of Italy's foreign
policies-indeed, doubts about whether those policies
were properly focused on Italy's evolving vital inter-
ests-came to a head in 1979 when Italy was not
invited to the Guadaloupe Summit.' In the eyes of some
Italian officials, the two-pillar approach, at least as
implemented by successive Christian Democratic-led
governments, was no longer fulfilling its fundamental
objective: Italy could no longer claim a place among the
major West European powers.
20. These concerns stimulated a thorough rethink-
ing of Italian foreign policy, and changes in the
foreign policy positions of the major political parties
slowly followed. By 1983 a shift in the correlation of
domestic political forces had also taken place, and
now, for only the second time since the war, the
governing coalition is not led by a Christian Democrat:
- Under the leadership of the profoundly anti-
Communist Prime Minister Bettino Craxi, the
Italian Socialists officially abandoned their half-
hearted support for the North Atlantic Alliance
in favor of a tougher line on East-West issues and
a firmer stance on defense issues. Craxi has
supported the deployment of INF and has fur-
ther demonstrated his reliability as an ally by
taking part in such out-of-area operations as the
Red Sea minesweeping operations and the multi-
national peacekeeping force in Lebanon. Craxi's
policies have the added advantage of sharply
distinguishing the Socialist Party from the Italian
Communist Party (PCI), a distinction Craxi hopes
will cut into PCI support.
- Craxi's support of NATO is exceeded within the
government only by that of his Defense Minister,
Republican Giovanni Spadolini, who believes
that Italian support of US policy initiatives will
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secure respect for Italy within NATO and help
ensure the US commitment to defend Italy from
Mediterranean threats.
- A dissenting line from Craxi's policies is some-
times sounded by Italy's Foreign Minister, Guilio
Andreotti, who is more representative of tradi-
tional Italian foreign policy. Although supportive
of Italy's membership in NATO, Andreotti main-
tains an independent line from Craxi, calls for
Rome to play a role as interlocutor between East
and West, and places more emphasis on the
importance of Italy's relations with Third World
states.
- Finally, the PCI, potentially Italy's largest party,
although not a member of Craxi's coalition, has
also changed its attitude toward Moscow. After
three decades of growing disillusionment with
Soviet-style Communism, the PCI condemned
the Soviet invasion of Afghanistan, and the late
PCI Secretary General Enrico Berlinguer public-
ly accepted Italy's 1948 decision to join NATO.
In addition, the PCI did not make INF a major
issue during the recent electoral campaign. The
PCI is unlikely to instigate a formal break with
Moscow, however, and there are now some indi-
cations that it is gearing up to wage a campaign
against SDI. Moreover, should any government
need PCI support to remain in office, the Com-
munists are likely to seek in return to scale down
Rome's military contributions to NATO.
Canada: Searching for Its Own Identity
21. Ottawa's historical drive to distinguish its poli-
cies from those of Washington, even while maintain-
ing good relations with the United States, was given a
new twist during Pierre Trudeau's 16 years as leader
of the Canadian Government. Under his leadership,
Canada tended to approach the world from more of a
multilateral and, occasionally, a north-south perspec-
tive, and he seemed to relish the discomfort this
caused in the United States. Canada increased ties-
especially trading ties-to the East Bloc and, aside
from careful respect for COCOM regulations, showed
little concern for US sensitivities in this area. At the
same time, Trudeau tried to carve out for Canada a
role as mediator between East and West, undertaking
several major initiatives on behalf of peace and disar-
mament, especially during 1983-84
During this period, defense spending was accorded a
low priority, reflecting Trudeau's personal antimili-
tary orientation and his emphasis on social spending in
.a period of economic difficulties. Military expendi-
tures, as a percentage of gross domestic product,
lagged consistently below the level of the other major
NATO Allies (see figure 2).
22. The election of Brian Mulroney's Progressive
Conservative Party resulted in a shift in Canadian
priorities away from Third World and nonaligned
causes, back toward policies that assert the primacy of
good relations with Washington and the NATO Alli-
ance. Mulroney is ideologically inclined to see the
world through an East-West prism and is prepared to
strengthen Canada's contribution to Western defense,
albeit at a gradual pace because of economic difficul-
ties. Since taking office in September 1984, the Tories
have begun to raise Canadian troop strength in Europe
and agreed to help fund a modernized line of radars
that are part of North America's defense against Soviet
intercontinental bombers and cruise missiles.
23. The Progressive Conservative Party controls a
commanding majority of seats (211 of 282) in the
Canadian Parliament, and new elections need not be
held until 1989. Nevertheless, Mulroney has yet to
prove he can translate that majority into effective new
policies, and his ability to place his own stamp on
Canada's foreign policy is likely to be constrained by
two major factors:
- First, the Canadian public strongly supports the
notion that Canada ought to have an indepen-
dent identity in international affairs. It expects
Ottawa to take positions that are distinct from
those of Washington and is unlikely to accept for
long a foreign policy that appears merely to echo
the United States. These feelings, and the under-
lying resentment of US economic dominance, are
widely present
Second, during the last elections, Mulroney and
his Progressive Conservative Party co-opted the
traditional Liberal themes of peace and disarma-
ment and advocated a relaxation of US-Soviet
tensions. Well aware of the depth of public
concern on these issues, Mulroney moved quickly
once elected to quash speculation that his would
be a Cold War foreign policy. He has sought to
demonstrate the nonpartisan continuity of Cana-
dian policies on these issues by appointing Tru-
deau as his peace adviser, naming Socialist Ste-
phen Lewis as Ambassador to the United
Nations, and asking left-leaning Tory Douglas
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Roche to serve as a special disarmament ambas-
sador. These actions may have temporarily dif-
fused public pressures, but US testing of cruise
missiles over Canadian territory and Canada's
role in SDI research will remain controversial
questions.
The Economic Dimensions of Allied Relations with
Moscow
24. Promoting detente with Moscow, stabilizing re-
lations with Eastern Europe, and aiding their own
economies-the primary motives behind the expan-
sion of Allied trade with the Soviet Union during the
1970s-remain the Allies' overriding justifications for
continuing East-West trade. The network of trading
ties that developed during that period has become well
established and receives financial and diplomatic
backing from Allied governments. Certain industries
and corporations now have a financial interest in trade
with the East, and many are willing to exert substan-
tial political influence to ensure that their East Bloc
markets are maintained. With unemployment still
widespread in Western Europe and Canada, the mar-
kets of Eastern Europe and the Soviet Union also serve
as a convenient outlet for the surplus production of
those older industries where the high cost of labor and
antiquated production facilities make competition in
other markets difficult.
25. Moreover, many Allied government, business,
and labor leaders see the Soviet Union and Eastern
Europe as potentially lucrative markets for the sophis-
ticated equipment and advanced technology prod-
ucts-office equipment, some electronic consumer
products, and specialized items such as those used in
oil and gas extraction-that they plan to export in
increasing volume. Allied leaders, especially in France
and Canada, hope that increased exports to the East
Bloc will reinvigorate their own economies and, in the
process, provide capital for research and development
in the high-technology fields of the next decade, and
thereby help to narrow the technology gap between
themselves and the United States and Japan.
West Germany: Moscow's Most Important Western
Trading Partner
26. West Germany's trade with the USSR and
Eastern Europe is the most extensive of any Western
country, and Bonn sees such trade as essential in
minimizing the chances for war in Central Europe and
promoting intra-German reconciliation. No tariffs ex-
ist between East and West Germany, and West Ger-
man exports receive substantial subsidies in the form
of interest-free credits extended to East Berlin. West
Germany's trade with the Soviets (see figure 3), how-
ever, which totals nearly $10 billion a year, is not
subsidized. When the Soviets demand low-interest
credits, West German exporters raise the selling prices
of their products to offset the higher costs of domestic
financing. The Soviets are well aware of the ruse but
are apparently willing to pay a higher price for the
quality of West German products.
27. West German exports to the USSR are concen-
trated in several key industries, and a cutoff or
disruption of trade could significantly affect a few
firms. The USSR has been an especially welcome
buffer against hard times for West German steel firms.
Total iron and steel production is well below capacity,
and unemployment in the industry currently is run-
ning over 20 percent, more than double the national
rate. Plant equipment, large-diameter pipe, and other
steel products account for roughly two-thirds of sales
to the Soviets. A large share of these exports to the
USSR comes from the Ruhr area in North
Rhine-Westphalia, a stronghold of the Social Demo-
cratic Party.
28. Across the political spectrum, West Germans
hope to expand trade with the USSR but have become
concerned about the possible impact of Soviet counter-
trade requirements on bilateral trade, especially in the
important machine-tool sector. The Soviets reportedly
now are insisting that contracts for machine tool sales
to the Soviet Union include provisions for West Ger-
man purchases of Soviet machine tools of at least 10
percent of the value of the contract. West German
exporters are having difficulty marketing the Soviet
machine tools they are being forced to accept in these
arrangements, and these difficulties may slow further
expansion of Soviet-West German trade.
France: Still Willing To Pay a Price for Soviet
Trade
29. Although trade with the Soviets accounts for less
than 3 percent of overall French trade, it has run
significantly in the red for the past six years; French
exports to the USSR-iron and steel, machinery and
transport equipment, chemicals, and agricultural
products-have been insufficient to offset French
imports of fuel from the Soviet Union. The French are
seeking-with some success-to redress this trade im-
balance by renegotiating their gas contract and by
expanding the sale of French products to the USSR.
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Figure 3
Allied Trade With the USSR, 1978-83
11
Imports
Exports
I I I I I I I I I I
I I I I I I I I I I I
I
Imports Imports
0 1978 79 80 81 82 83 0 1978 79 80 81 82 83
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30. In addition to its firm belief that trade gives the
Soviets a stake in stability in Europe, Paris has two
reasons for trying to expand trade with the Soviets:
- Soviet imports provide jobs in industries hard hit
by the recent recession-especially in steel
chemicals, and automobiles.
- The Mitterrand government would like to use its
access to East Bloc markets to improve its com-
Great Britain: Keeping Up With Continental
Competitors
31. Trade and financial ties play a relatively small
role in overall Soviet-British relations. Indeed, as a
percentage of total trade, Soviet-British exchanges
rank well below those of any other major West
European countries (see table 2). Nonetheless, London
prefers not to be excluded from the market by its
European competitors. Britain exports mostly chemi-
cals and manufactured goods to the USSR. Imperial
Table 2
Trade With the Soviet Union
Chemical Industries (ICI) negotiated a 10-year um-
brella trading agreement with Moscow that calls for
importing crude oil and naptha in exchange for a
variety of chemical products. Approximately one-
fourth of ICI's British workers are involved in produc-
ing chemicals for export to the USSR. Other British
firms remain interested in keeping up with their West
German and French competitors in penetrating the
potentially profitable Soviet market in oil and gas
exploration and pipeline equipment.
32. London believes that these trading contacts
maintain a minimal level of cooperation and help
demonstrate that Britain is not inflexible on East-West
matters. Despite the small trade deficit that the United
Kingdom has run with the USSR (see figure 3), London
has recently extended below-market credits to Moscow
and hopes to further expand trade.
Italy: Reluctant To Continue Subsidizing Soviet
Trade
33. The Italians have had extensive trading ties
with Moscow since the early 1960s, when Rome began
extending below-market credits to the Soviets. Because
the Italians offered generous compensation for Soviet
goods and accepted buy-back provisions in contracts,
Italy's trade with the Eastern Bloc rose steadily
through the mid-1970s, when over 6 percent of Italian
trade was conducted with Council for Mutual Eco-
nomic Assistance (CEMA) countries. As those countries
gained access to higher technology goods in the United
States, France, Japan, and West Germany, however,
trade with the East slipped to less than 4 percent of
Italy's total trade (see table 2). About half that amount
was conducted with the Soviet Union. In addition,
Italy now finds its constant trade deficit with Moscow
increasingly burdensome, especially in light of mount-
ing Italian budget deficits (see figure 3).
Exports Trade
Balance
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34. Strong trading ties exist between the Soviet
Union and several Italian firms large enough to absorb
the countertrade agreements that the Soviets require.
Italy's largest private employer, Fiat, and a subsidiary
of the state-owned energy corporation, ENI, were at
the forefront of developing trade with the Soviets in
the early 1960s. Montedison (troubled chemical firm)
and Finsider (state-owned steel company) also have
extensive ties, while those of Pirelli (tires) and Olivetti
(office machines) are more modest. Fiat has ambitious
plans to expand its export of automobiles to the Soviet
Union, but the present Italian Government is marked-
ly less enthusiastic about granting Moscow any more
below-market credits.
35. The PCI no longer plays as prominent and overt
a role in Italy's trade with the Soviet Union as it did in
the 1950s and 1960s. During that period, Moscow gave
preferential trade treatment to four PCI-owned trad-
ing firms, and the commissions from such trade went
directly to fill the coffers of the PCI. Although such
support probably continues, it is harder to document
because it now must take an indirect route. In 1975
the PCI formally divested itself of the cooperatives to
comply with a new law on political-party financing,
and the cooperatives are now owned by an organiza-
tion run by PCI members.
Canada: A Profitable Grain-Exporting Trade
36. Canada's trade with the USSR runs essentially
one way-the Canadians export substantial quantities
of grain to the Soviet Union. The Canadians have run
a large trade surplus with the Soviets, especially since
1980 (see figure 3). The political clout of Canadian
grain exporters is substantial, especially in western
Canada, where support for Mulroney's Progressive
Conservative Party is strongest. During the 1980 US
grain embargo, Canadian farmers appealed to the
country's historical aversion to sanctions of any sort,
and successfully prevailed upon Ottawa to back out of
the NATO-imposed trade sanctions.
37. Mulroney strongly backs efforts to expand Can-
ada's foreign trade as a means of reducing the coun-
try's 11-percent unemployment rate and restructuring
its aging industrial base. The Ottawa federal bureau-
cracy is expected to push the Soviet Union as an
obvious market for products receiving special export
emphasis-equipment for extracting and producing
oil and gas in Arctic regions.
IMPLICATIONS FOR THE UNITED STATES
38. Strongly held Allied positions on a number of
key East-West issues flow from the underlying inter-
ests discussed in the preceeding section. To some
extent, they are given factors, more-or-less impervious
to US-induced modifications. At the same time, how-
ever, and to varying degrees in specific cases, Allied
policies are susceptible to change, depending on US
positions and tactics. They are also subject to modifica-
tion as a result of inducements and pressures brought
to bear on Allied governments by Moscow. The areas
of possible change are discussed below.
Security Issues
Levels of Defense Spending
39. Allied Perspectives. All of the major Allied
governments well understand the Soviet conventional
military and nuclear threat to their territories. Howev-
er, they do not believe that they need make nor indeed
could sustain an increase in their defense spending
large enough to alter significantly the imbalance of
forces along Europe's Central Front. Moreover, al-
though suspicions of Soviet intentions in Europe have
grown in the last five years, neither Allied govern-
ments nor their publics believe that the Soviets intend
taking military actions against Western Europe. As a
consequence, popular support for increasing defense
expenditures is not widespread, particularly when
such increases can only come at the expense of
domestic programs. These budget constraints and pros-
pects for slow economic growth will largely prevent
significant increases in defense expenditures in all five
major NATO Allies.
40. Susceptibility to Change. At best, US pressure
on Allied capitals to raise defense expenditures might
keep that spending from declining in real terms in
France, West Germany, and Britain. US encourage-
ment would reinforce Italy's inclination to increase its
forces committed to Mediterranean defense, but it is
likely that these increases could only come about at the
expense of other parts of Italy's defense budget.
Pressure to increase Canada's defense spending would
be more effective if it were perceived to come from
the Alliance as a whole, instead of exclusively from the
United States, and if it were cast in terms of defending
Canadian, as well as West European, territory. (See
table 2.) US leverage on this issue, however, would be
undercut by any leveling or decline in US defense
spending.
41. Only a major Soviet move outside its borders
could galvanize West European publics into support-
ing increased defense spending. In the absence of such
aggressive behavior, normal Soviet military develop-
ments and force improvements will have little effect
on the level of defense spending in Allied countries.
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Moreover, if the Soviets offer attractive concessions in
the arms talks in Geneva and otherwise make concilia-
tory overtures to Europe, public support for defense
spending could fall off, and defense budgets could
decline further.
Arms Control and the Strategic Defense Initiative
42. Allied Perspectives. The current governments
of the major NATO Allies view the arms control
process itself as an essential element in maintaining
superpower stability and reducing tensions between
Moscow and Washington. However, they are faced
with opposition parties, especially in Great Britain and
West Germany, that put great stock in arms control
and nuclear disarmament for achieving security. In
the absence of a comprehensive arms control pact with
deep cuts in both ICBMs and INF, continuing the
formal process of negotiations, if even just for the sake
of negotiating, will be preferable to Allied govern-
ments than no talks at all. When that process breaks
down-as when the Soviets walked out of the Geneva
negotiations in December 1983-public fears about
the risk of war rise, and pressures on Allied govern-
ments to play more active roles in mediating between
the superpowers increase. But, as long as negotiations
are under way, the major Allies will generally support
US bargaining positions, even if they sometimes lobby
privately for new or revised negotiating stances.
43. The Allied governments also hope for concrete
results from the negotiations now under way in
Geneva:
- In the near term, the highest West European
priority is on the INF talks. A preferred Europe-
an outcome would be an agreement that obviat-
ed the necessity of deploying the full number of
Pershing Its and cruise missiles envisaged in the
1979 NATO dual-track decision.
- Over the longer term, concern is focused on the
SDI and negotiations on space-based weapons.
The SDI has renewed fears about the potential
decoupling of US and European security and, in
allegedly spurring the Soviets to intensify their
own ballistic missile defense efforts, appears to
threaten the credibility of French and British
nuclear deterrents just as Paris and London are
struggling to maintain public support for the
modernization of these systems. The Allies are
further concerned that SDI could jeopardize the
future of the arms control process itself. These
Allied concerns about the implications of SDI are
unlikely to be assuaged by their participation in
SDI research. Indeed, the extent of that partici-
pation, the degree to which US technologies are
shared, the controls that are imposed to prevent
the transfer of SDI technologies to the East, and
the degree of compatibility or competition for
resources between the SDI and EUREKA may
themselves become the focus of US-Allied
contention.'
44. Susceptibility to Change. The support of Al-
lied governments for US positions in Geneva will
almost certainly continue as long as the United States
consults with them about major changes in its propos-
als, appears to take their views into account, and keeps
them adequately informed during the negotiations.
Popular support in Allied countries for the US posi-
tions in Geneva is more likely to be retained if the
United States is perceived to offer serious proposals
and appears receptive to Soviet initiatives.
45. A public Soviet offer of what appeared to be
significant concessions in the INF negotiations, in
exchange for US abandoning of SDI, would probably
find substantial popular support in the Allied coun-
tries. Such a proposal would probably rekindle support
for domestic West European peace movements, which
still could exert substantial pressure on Allied govern-
ments. The major Allied governments, however, would
be unlikely to alter their support of the United States
in response to such a Soviet proposal. Soviets attempts
to tie progress in the arms control arena to expanded
trade ties to Western Europe or to modifications of
technical trade restrictions probably will not make
much headway. Direct Soviet pressure on Allied gov-
ernments is unlikely to succeed. Pressure exerted
through large corporations and domestic groups with
an interest in East-West trade might prove marginally
more effective.
Economic Issues
Expansion of Trade With the Soviets
46. Allied Perspectives. Expanding trade with the
Soviets is a stated goal of most of the major Allies, for
both economic and foreign policy reasons. Bonn, Paris,
and Ottawa would like to boost the level of East-West
trade, which has been declining as a percentage of
their total trade (see figure 4), and London is deter-
mined not to lose markets to its European competitors.
Only Rome is reluctant to continue subsidizing trade
with Moscow in light of its severe budget deficits.
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 Figure 4
Allied Exports to the East Bloc, 1975-84
I I I I I I I I
1975 76 77 78 79 80 81 82 83 84
West
Germany-
Canada
United
Kingdom
47. Susceptibility to Change. Allied desires to
expand trade with Moscow are unlikely to be curbed
by US opposition-as the oil pipeline dispute so amply
illustrated. The Soviets clearly intend to use the trade
issue to divide the United States from its Allies, and
Moscow has made the link between trade and Allied
positions on SDI quite explicit. However, none of the
Allies believes that trade with Moscow renders them
vulnerable to Soviet threats to cut off trading ties.
Allied governments do not believe that Moscow will do
anything to implement its threats and so are largely
ignoring them.
7
48. Western Europe's overall dependence on the
Soviet Union for 10 percent of its oil and roughly 15
percent of its natural gas imports has already created a
certain energy dependence on the USSR, although the
Allies believe it is relatively insignificant during the
present period of oversupply in world energy markets.
There is a very real danger, however, that Western
Europe will be forced to increase substantially its
purchases of Soviet gas in the 1990s if decisions to
augment North Sea production are not made in the
next year or two. Should Western Europe begin to
import more than 30 percent of its gas from the Soviet
Union-as current projections show happening by the
year 2000-then its vulnerability to Soviet economic
pressure could increase significantly. For their part,
Allied governments tend to discount the consequences
of increased dependence. They argue that natural gas
comprises only 15 percent of Western Europe's total
energy consumption, that they can shift to alternate
energies, and that it would be difficult for the Soviets
to apply pressure to cut off supplies selectively. Fur-
thermore, reducing supplies to Western Europe as a
whole would cost Moscow substantial amounts of
scarce hard currency. Indeed, the Allies maintain that
the Soviet Union is more dependent on West Europe-
an trade than the other way around. Twenty percent
of Moscow's trade is conducted with Western Europe,
and 65 percent of its hard currency comes from such
exchanges.
Use of Economic Sanctions
49. Allied Perspectives. In general, the major
NATO allies believe that economic sanctions are not
an effective means of modifying Soviet behavior and
unwisely raise the level of tension between Moscow
and the West. The French are particularly sensitive to
any perceived effort by the United States to develop a
comprehensive Western strategy aimed at weakening
the Soviet economy. Mitterrand's opposition to what
he has called US efforts to engage in "economic
warfare" against the Soviets has received broad do-
mestic support, including from opposition leaders such
as Jacques Chirac and Raymond Barre. West Ger-
mans, across the political spectrum, do not believe that
sanctions work, fear they would damage prospects for
closer relations with East Germany, and are concerned
about the possible impact on employment-a concern
magnified by West Germany's high unemployment
rate. The Thatcher government has grave doubts
about the effectiveness of sanctions in general and, in
particular, that their use against Moscow would under-
mine its arguments against using sanctions to change
the policies of the South African Government.
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50. Susceptibility to Change. In the absence of a
major Soviet provocation, the Allies are unlikely to
participate in major economic sanctions against the
Soviet Union. In the event of outrageous Soviet behav-
ior, the odds on Allied agreement to apply economic
sanctions would improve for awhile, particularly if
they were pressed to do so by Washington. France,
West Germany, and Britain would probably comply
reluctantly at first, while Italy and Canada would
more readily agree. Although Rome does not believe
that sanctions work particularly well, the Italians
would probably join in applying them against Moscow
primarily to impress upon Washington Italy's reliabil-
ity as an Ally. The Mulroney government would
support the use of economic sanctions against the
USSR in the event of aggressive Soviet actions, but it
would insist on multilateral coordination and compli-
ance and would probably find pressure from its Allies
(but not exclusively from the United States) useful in
subordinating its domestic grain-exporting interests.
Safeguarding Sensitive Technologies
51. Allied Perspectives. Consistent with their de-
sires to expand trading ties to the Soviet Union and
find markets for their advanced technology products,
the major Allies will probably resist efforts to expand
the list of items (especially dual use) now under export
controls.' The French, Canadians, and West Germans
are especially determined that new restrictions on
their trade with Moscow not be introduced. Chancel-
or at least acquiesce in-efforts to tighten Western
controls. Where the stakes are seen as primarily
economic and security risks as less distinct, they will
strenuously oppose any comprehensive approach by
the West especially in areas-such as advanced tech-
nology-in which the West Europeans and Canadians
hope to improve their ability to compete with the
United States and Japan. Strong pressure on this
matter from the United States might prove counter-
productive, however, and would probably give wider
currency, particularly in the Canadian bureaucracy, to
a conviction that Washington is seeking to undermine
its Allies' international competitiveness by attempting
to force their policies more in line with its own.
Nonetheless, most major Allies probably have conclud-
ed that amicable relations with the United States, as
well as their own security interests, require the im-
provement of existing mechanisms for enforcing pres-
ent COCOM restrictions.
54. Italy remains the exception, even though addi-
tional US pressure on Rome would probably persuade
the Italians to agree to expanding COCOM controls.
Lax Italian enforcement of existing controls is far
more serious. The Italians are unwilling to deal with
what they view as minor infractions against the sys-
believes that COCOM should be interpreted in such a
manner that only items of demonstrated strategic
importance should be barred-a position enjoying
broad support in West Germany.
52. However, Soviet efforts to acquire advanced
technology have been increasingly bold in recent
years, and there is a growing recognition in major
Allied capitals of the security risks inherent in East-
West trade. Paris and London have both expelled
numerous Soviet citizens on grounds that they were
engaged in industrial espionage. Overall, Allied gov-
ernments-with the notable exception of Italy-have
generally tightened up on enforcing existing controls.
53. Susceptibility to Change. If the United States
could persuade its Allies that an authentic security risk
exists if a particular item or class of items is exported
to the Soviet Union, the Allies will probably support-
55. Allied Perspectives. Although the NATO Al-
lies see indigenous and regional problems as the
primary causes of instability in Third World, all of
them are aware that Moscow actively attempts to take
advantage of many of these circumstances. In general,
however, the Allies do not believe that the Soviets are
particularly successful in these attempts-nor will
become so in the future-because Moscow cannot
offer the kind of development assistance needed by
these countries over the long term. Most Allied govern-
ments believe that Soviet gains in the Third World can
be halted and even reversed by subtle diplomacy,
economic support, and occasional military assistance to
certain regimes. In most cases, however, the Allies do
not believe that their vital interests are significantly
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threatened. Nicaragua is a case in point. Most Europe-
ans originally refused to believe that the Sandinistas
were intent in forming a Marxist-Leninist state closely
tied to the Soviet Union. Although they now have
second thoughts on this score, they remain reluctant to
see the potential geostrategic significance of the im-
plantation of a pro-Moscow regime in Central
America.
56. In keeping with France's traditional involve-
ment in Africa, Mitterrand has taken a more active
interest in this problem than have other Allied leaders,
and he is convinced that France can provide an
alternative to US or Soviet influence in the Third
World. He is especially concerned about the potential
for Soviet, Cuban, and Libyan meddling iii those areas
of Africa adjacent to the established French preserve
of francophone states, and he has tried to improve ties
to regimes in Angola, Benin, Congo, Seychelles, and
Mozambique, where the French believe there are
opportunities to counter and reduce Soviet influence.
57. Susceptibility to Change. If basic Allied per-
spectives on Soviet activities in the Third World are to
change at all, this is more likely to be in response to
conditions in specific countries rather than as a result
of US entreaties. The erosion of Allied support for the
Sandinista regime in Nicaragua over this past year has
been largely due to growing disillusionment with
Managua's domestic policies. Bilateral Allied aid to
Nicaragua has dropped, although some of it has been
diverted to the European Community's multilateral
assistance program to the Central American Common
Market, which includes Nicaragua.
Relations With Eastern Europe
58. Allied Perspectives. All of the major NATO
Allies believe in clearly differentiating their policies
toward Eastern Europe from those toward the Soviet
Union. Not to do so, in the view of most West
Europeans and Canadians, would be tantamount to
treating the oppressed like the oppressor. But, in
contrast to the United States, they are loathe to
differentiate among East European countries and be-
lieve that the West should cooperate with all willing
East European governments, even those that are do-
mestically repressive and show no foreign policy inde-
pendence. Allied governments, therefore, grant prefer-
ential trade status to East European countries pretty
much across the board and offer them credits and
other financial guarantees on favorable terms. The
Allies regard ties to Eastern Europe as inherently
stabilizing and believe they foster improved political
and economic conditions in the East. Most West
Europeans believe they have a responsibility to en-
courage gradual change in Eastern Europe only to the
extent that the region's essential stability is not
disrupted.
59. West Germany's special relationship with East
Germany affects Bonn's view of events elsewhere in
Eastern Europe. The Bonn government, supported by
a large segment of the West German public, generally
believes the West should show support, moderation,
and understanding toward Poland because it regards
events there as a possible precursor to a similar crisis in
the German Democratic Republic. The opposition
Social Democrats' desire for closer relations with East
Germany conditions many of its responses to Soviet
activities elsewhere. Italy has a close relationship with
Yugoslavia, which has grown out of historical Adriatic
trading ties, and Rome has more extensive connections
to Albania than has any other Western country.
Among Italian and French Socialists, there is a special
sympathy for-and many close personal ties to-
reformers in Czechoslovakia, Hungary, and Poland.
60. Susceptibility to Change. US actions are un-
likely to affect a major change in the Allies' approach
to relations with Eastern Europe. Aggressive Soviet
moves in the area would heighten West European
fears of a military confrontation with the USSR and
would probably reinforce desires to stabilize the region
by deemphasizing Western efforts to improve condi-
tions in Eastern Europe.
Human Rights in the USSR
61. Allied Perspectives. Concern about human
rights in the Soviet Union characterizes the policies of
all major NATO Allies, and all believe that quiet
diplomatic efforts are the most effective way of
dealing with specific cases. All the Allies, and especial-
ly the French, regularly plead the cases of confined
dissidents and others wishing to emigrate from the
Soviet Union.
62. Susceptibility to Change. The Allies have
been consistent on human rights issues. It was primari-
ly due to their efforts that the West was able to get
Soviet agreement to the Human Rights Provisions
("Basket 3") of the Final Act of the Conference on
Security and Cooperation in Europe (CSCE). They
would oppose an abandonment of the issue by Wash-
ington, but they would also consider a more open
advocacy of human rights in the Soviet Union counter-
productive. Opposition parties in West Germany, Brit-
ain, and Canada occasionally prod their governments
to focus somewhat greater public attention on these
issues, but they usually advocate pursuing these mat-
ters in a multilateral forum, such as the CSCE.
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63. From the US perspective, the danger in the
human rights area is that the Allies tend to believe that
the only way to help people in the East is to maintain
reasonably good relations with the East European
governments, They use human rights as a rationale for
improving relations with and opposing sanctions
against those governments in all but the most egregious
cases of misbehavior. West Germany is particularly
vulnerable on this score.
Additional Factors Affecting Prospects for
Accommodating US-Allied Differences on East-
West Issues
64. Several other factors will affect the course of
US-Allied relations on East-West matters:
- First, the coming to power of either the British
Labor Party or the West German Social Demo-
cratic Party would be among the most negative
European developments for Allied cohesion vis-
a-vis the USSR and would affect all aspects of
US-Allied relations. It would especially be dam-
aging for Alliance security policies.
- The British Labor Party is profoundly antinu-
clear-from its leadership through its rank and
file. Although moderates might have a stronger
voice in a Labor government than they do
while the party is in opposition-especially if it
were forced to rely on Social Democratic or
Liberal support-we do not believe that party
leader Kinnock would alter his support for
complete nuclear disarmament. The next elec-
tions need not be held before 1988, but, at the
moment, Labor leads in public opinion polls
and has at least a fair chance of achieving
power in this decade.
The West German Social Democratic Party has
adopted policies that would substitute arms
control for military strength as the foundation
of Western security. To become a viable con-
tender in a national election, the SPD Chancel-
lor candidate would probably have to moderate
his attitudes, but would face continuing diffi-
culties uniting the party behind this new
stance. We believe it unlikely that the SPD
could reenter government except in coalition
with the Christian Democrats or Free Demo-
crats. Should the SPD return to office, there-
fore, changes in West German policies would
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the SPD currently proposes.
- Second, in the person of Mikhail Gorbachev, the
Soviet Union now has a leader with considerable
diplomatic and public relations skills. His trip to
London in December 1984 is an illustration of his
effectiveness as an expositor of Soviet positions.
Should Gorbachev augment his personal attrib-
utes with an impression of greater Soviet respon-
siveness to West European concerns-for in-
stance, in INF-then it will indeed become more
difficult for the United States to maintain Allied
attention on the global, long-range nature of the
Soviet challenge and prevent their being swayed
by the prospect of short-term, regional accom-
modations. A litmus test of Gorbachev's ability to
innovate may be his professed willingness to
establish political ties between CEMA and the
EC. The West Europeans currently suspect-
probably rightly-that this proposal is only a
repetition of the old Soviet ploy of trying to
constrain the actions of individual East European
countries by making CEMA the control point for
their ties to the EC. But, if Gorbachev's offer
proves to be more than that, then the West
Europeans are likely to develop EC-CEMA ties
and thereby complicate West European-US
relations.
- Third, the major NATO Allies now recognize
that the gap in technology between themselves
and the United States and Japan is growing. The
extent to which they seek to narrow the gap by
cooperating more closely with the United States,
choose to cooperate with each other and compete
with the United States, or even look to trade with
the USSR to help their economies will have a
major impact on US-Allied relations on such
issues as SDI and other military technology
sharing.
- Fourth, the prospects for accommodating US-
Allied differences over East-West issues will also
be affected by the degree to which the major
NATO Allies believe the United States is re-
sponding to their needs in other areas. Amicable
management of such contentious economic prob-
lems as, for instance, how best to promote eco-
nomic growth and deal with various trade issues
will greatly improve NATO's ability to accom-
modate its different approaches to relations with
the Soviet Union.