Trade Trip

From Moscow with hope

A delegation of 235 top U.S. business executives returned home from the Soviet Union last week, a little dazed by Russian rhetoric but encouraged by the prospects of doing more business with the Soviets. Executives for Ingersoll-Rand, for example, arrived with a fistful of projects on which the Soviets wanted bids from the big New Jersey equipment maker. Distiller Joseph E. Seagram & Sons of New York struck a deal to sell the Soviets 8,600 cases of liquor for their hotel industry. Along with the booze will go a much needed seminar to teach Moscow's bartenders how to be less surly.

The executives had been in Moscow for the first meeting in four years of the U.S.-U.S.S.R. Trade and Economic Council, which had fallen dormant after the Soviet invasion of Afghanistan and trade sanctions by Presidents Carter and Reagan. With the lifting of sanctions only days before the meeting, the Soviets seemed eager once again to get down to business with the Americans.

Some of the businessmen had been afraid that the death of Soviet Leader Leonid Brezhnev five days before the trade session was to begin would force a cancellation. But according to retired Armco Inc. Chairman C. William Verity Jr., Soviet trade council officials were on the telephone within two hours after Brezhnev's death was announced, urging the Americans to come ahead. To Verity, co-chairman of the trade group, that was a hopeful sign that the Soviets felt that "the time had come for an improvement in relations."

The Americans and the Soviets met in Moscow's new International Trade Center, financed primarily by U.S. banks and built with American materials. One buffet luncheon was organized by Armand Hammer, 84, the chairman of Occidental Petroleum, who knew Lenin and who has been doing business with the Soviets for six decades. Wine and Georgian champagne flowed. Guests dined on mounds of black caviar, crab claws and smoked fish.

The only sour note of the executives' visit came during one luncheon. Soviet Deputy Foreign Minister Georgi Kornienko, in a 90-minute diatribe, lashed out against U.S. imperialism and economic policies. It struck newcomers to U.S.Soviet trade talks as rather inappropriate, but older hands took it all in stride as standard Soviet bluster.

The new trade chumminess came too late for Caterpillar, the big Illinois maker of earth-moving equipment; it sent no top executive from Peoria but was represented instead by Paul Smith, the company's man in Moscow. During the period of the Reagan halt on U.S. supplies for the Soviet natural gas pipeline, Caterpillar lost a $90 million sale of 200 large pipelayers, mainly to Japan's Komatsu.

Now that the ban is lifted, Caterpillar thinks its chances of ever catching up are slim. For severely troubled International Harvester, though, the news was a little bit better. At the meeting, IH Chairman Louis Menk dusted off a contract for a $750 million combine plant for which his company in 1979 had agreeed to provide the engineeering. Said an IH spokesman: "The Soviets indicated they were still eager to go ahead."

Donald Kendall, chairman of PepsiCo, whose bottling plants in the U.S.S.R. have been quenching Russian thirst since the Nixon years, contended that Reagan's on-and-off "light-switch commercial policy" branded the U.S. an unreliable supplier. Still, 15 more plants to bottle Pepsi will be uncapped soon. General Electric and Dresser Industries, two companies that would have been stung badly if the pipeline sanctions had gone on, now will be able to deliver their goods.

Indeed, after eleven months of various kinds of sanctions, only $200 million or so in potential sales has been affected, and some of that has been merely delayed, not lost. Thanks to grain sales of $2.5 billion this year, U.S. exports to the Soviet Union should total $3.5 billion, a surplus for the U.S. of $2.7 billion.

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