mission to Poland and Rumania, shows a hungry appetite by the Red regimes for American techniques. Concerning the Polish, "They are very much interested in any form of cooperation with U.S. computer manufacturers, peripheral equipment manufacturers, and U.S. producers of integrated circuits, measuring and testing instumentation." 31 The same applies to the Rumanians. American businessmen are quite capable of meeting this demand, but they also make clear their inability to determine the politico-strategic importance of such trade.

Clearly, our failure to recognize the varying strategic character of all goods, consumer and capital, to the planned cold war economies of the Red Empire has bred a series of policy failures that render our posture irrational and selfdefeating. Inadequate food, for instance, does not exactly bolster a Red regime's relations with the underlying populace in terms of exacted productivity, stoic acquiescence, and reduced frictions and resistance, all of which have their impact on the overall strength of the state. Our basic failure to face up to the broad strategicity of goods has accounted for the little pressure exerted on our allies to restrict their trade with the empire, the little discipline we've displayed with our own recent exports, our own violations of the Battle Act during the Korean War and since, and the rash of Free World trade with Red China while the U.S. defends the sovereignty of South Vietnam. The proliferating anomalies in the vital situation are logically traceable back to this basic failure.

The problem is not as complex as the confused thought on strategicity would make it appear. Chemical plants, for example, are a top priority item in Red import demand. Missilery, space technology, munitions, agriculture, and general industry depend heavily on such plants. Strategic? As a restricted study by the Center for Strategic Studies at Georgetown University discloses, our Manufacturing Chemists Association knows they are and, despite naive State Department urgings on Rumanian trust as to use, the group has consistently shown a reluctance to support their export to the empire. The oil offensive of the empire is a story in itself, an excellent example of empire integration through the Friendship Oil Pipe Line and also economic aggression. Strategic? The American Petroleum Institute knows it is and has opposed exports of oil processing facilities to the empire. These cases can be multiplied along the entire spectrum of economic goods entering into a planned cold war economy.

What can we do? On the basis of given evidence, the first thing is to recognize soberly the absence of a rationally appropriate and effective Free World trade policy toward the Red Empire. Second, to urge a complete embargo, such as exists against Red China, North Korea, North Vietnam, and Cuba, or to advocate freer trade with Eastern Europe because our allies indulge in it, or because of accidental gestures on the part of the "satellites," is in the present situation an extreme course disproportionate to our strategic cold war needs. It is obviously not entirely true, as the President's Commission maintains, that "The United States has three alternatives. It can leave things as they are. It can eliminate this disparity through action across the board that would bring U.S. trading practice into line with those of our allies. Or it can modify its practices selectively and on a country-by-country basis." 32 In reality, there are two other alternatives-a complete embargo and selective country-by-country trade on the basis of political concessions; in other words, the latter being a poltrade policy with the same approach as the commission's third alternative but with a different and realistic, cold war political basis.

The poltrade policy has these five dominant characteristics: Cold War realism, freedom instrumentation, a via media approach, a formula for maximum flexibility and consistency, and a structure for positive Free World action. The first characteristic has been reflected throughout this analysis. Its content constitutes the very foundation of this poltrade policy. It refutes as illusory the basic assumptions and major reasons given for liberalized trade with Eastern Europe and emphasizes the Red economic strategy, the aggressive nature of Red trade, the vital distinction between Red states and the underlying captive nations, Red empire autarchy and integration, and the self-defeating character of unconditional Free World trade with the empire.

Thomas P. Collier, "Poles Enter Electronic Age," International Commerce, November 15, 1965, p. 14. 32 Op. cit. Report to the President, p. 5.

Indeed, the more one contemplates the clear-cut benefits of unconditional trade to the Red totalitarians, the more concerned one becomes about the acute vulnerabilities of the Free World. The trade issue cannot be divorced from "wars of liberation" and a host of other interrelated phenomena. Even this would be indicatively pertinent: "We have evidence," disclosed the Venezuelan Minister of the Interior, Gonzalo Barrios, "that Venezuelan Communists have been getting money from the Soviet Union, using the Italian Communist party as a vehicle. The Venezuelan Communists recently asked for additional funds designed to organize a large-scale subversive plan.” 33

Freedom instrumentation is the second characteristic, meaning the full use of trade as a means of sustaining and expanding freedom. Liberal trade advocates argue in terms of freedom, too, but their false notions about the weaning process and evolution have already been noted. With cold war realism, we should scarcely hesitate or fear utilizing trade as a freedom weapon just as the Red regimes manipulate it as a weapon for conquest. Vague rhetoric about bridges of understanding, contacts with peoples, and exchanges of ideas could hardly forge such a weapon for freedom. In the present-day context only trade predicated on specific political concession values, involving even pecuniary subsidy, can guarantee such a weapon. The one striking fact that seems to be ignored by our easy trade advocates is that for some time now the USSR, under heavy pressure of self-imposed demands on its relatively limited resources, has not had the capacity to serve adequately the needs of other East European Red regimes. Naturally, the escape valve is broader but regulated East-West trade.34

The Red regimes would not, of course, find this poltrade policy to their liking. Early in 1965 the Polish premier, Josef Cyrankiewicz, already “warned the West not to demand political or ideological concessions in exchange for increased trade." 35 He seemed to forget that the empire desperately needs this trade, not we. On the Free World side, former Chancellor Ludwig Erhard of West Germany issued another type of warning when at the 13th Congress of the Christian Democratic Union he bemoaned the fact that some Western nations are "competing with each other to give the Communist East long-term credits without getting any political concessions in return." Short-term credits are also important, and on this basis West Germany has led the others in EastWest trade. It cannot be emphasized too strongly that the United States leads in overall technological development, and it is this fact which places it in a unique position to determine how far the Red regime can partake of it. As one editorial has aptly put it, "Actually almost anything the Russians buy in the West is strategically important, because of the backwardness of their economy and their desperate need for Western technological assistance." 36 Bedazzled by Moscow's concentrated Potemkinist display of military rocketry, space explorations, and propagandized military strength, most Americans, even on the highest official levels, are unaware of the basically underdeveloped economy of the inner Soviet Russian imperium.

Another important characteristic of the poltrade policy is its via media approach, a general avenue between a complete embargo and free trade, yet participating in their negative and positive natures in unlimited possible combinations of bids and offers. The approach would be sharply differentiating, in breadth and depth far more so than that of the present policy. The reasons for this are an awareness of the general strategic character of all goods for the Red cold war economies and their varying degrees of strategic importance, and of the different political conditions existing in various parts of the empire in terms of oppression, persecution, special restrictions, and opportunities for internal pressure. These are the two broad bases for the operation of the poltrade formula, which would proportion trade bids to political concession bids; in short, fusing economic values with political values.

Much is uncritically made of Yugoslavia as an example of wisdom in our present policy, for $3.5 billion in U.S. assistance are chalked up its "independence" from Moscow, about 70 per cent of its trade being done with the West, and a cozy association with Free World economic organizations. Yet it's

AP, Caracas, Venezuela, April 12, 1965.

34 e.g. Malcolm Rutherford. Financial Times of London, June 25, 1969. Reuters, Leipzig, East Germany, March 1, 1965.

38 "East-West Trade As A Weapon," The Chicago Tribune, June 2, 1969.

extremely difficult to perceive the political values of this pragmatic wisdom. From viewpoints of ultimate survival and ideological hue, Belgrade's interests are inextricably tied up with Moscow's and, just to mention one example, Tito's record of condemnations against U.S. action in the Congo, Vietnam and the Dominican Republic and concerning Cuba, constitutes ironic compensation of the most indescribable type. Belgrade trades with Havana and, despite its negligible power on the global scale, has played for the empire a unique role of diplomatic broker. Also, the thought of Yugoslavia setting a pattern of profitable practice for others in the Red Empire, and to the net advantage of the empire, seems to elude many. This pattern was formed not by design but rather by necessity of response to internal and external problems. In any case, the wisdom of our policy toward Yugoslavia has worked against the freedom of the various nations in that totalitarian state, as its broadened application certainly will against those in Rumania, Poland, Hungary and others. Tito may have his recurring squabbles with Moscow, but in the last analysis the survival of his regime depends on continuing Soviet Russian power.

Turning to the poltrade formula, one can see that it would be practicable and adaptable for all changing circumstances. Scaled to priorities of political consideration, the formula allows for long-term and short-run credits, as well as cash payments. It deals in producer, capital goods and consumer goods, as well as managerial ability, organization, and technological data. In sharp contrast to present U.S. policy, it advances a principle of consistency in that its application would be directed at the Asian sectors of the empire as well as the European and Latin American. The avid use of the formula would produce considerable politico-propaganda values, since all trade transactions would necessarily be tied to specified political items. Bids for specific political concessions would make the latter integral parts of the economic valuation process just as much as Red bids for machines and so forth. It certainly would not allow us to be baited in the competitive jungle on the supposedly pragmatic basis that if an item, e.g. a computer, is available to the Red regimes elsewhere, it should be allowed for export.37 This is tantamount to saying if others make regular attendance at a brothel, this is justification for us to do likewise.

Moreover, application of the formula would unambiguously work in behalf of the captive nations; it woul not accommodate without real cost the empire's economic plans; it would uphold the efficacy of our foreign aid program by relating Red subversive efforts in the underdeveloped areas to trade offers: and it would provide U.S. with an effective leverage to solve the problem of unconditional West European trade with the empire and reorient much of this trade toward intensified intra-Free World trade. A vigorous and well-planned poltrade policy with alternative advantages for our allies and a consuming emphasis on trade for freedom would find few, if any, Free World nations seeking to help the empire unconditionally, particularly as concern savings in intangible values of time and costs of research and development. The significant fact here is that since World War II, we have never taken the leadership in this kind of FreeW orld control over trade with the Red empire. With our power, it wouldn't be difficult to propagate such action.

Steps in applying the formula would in general be simple, methodical, and in graded order: (1) as in present policy, military weapons and space technology would face complete embargo; (2) most advanced producer goods, technology, managerialism and data would be proportioned to poltrade bids of the highest value, entailing free elections, enforcement of the national self-determination principle, the opportunity for political party pluralism, and the satisfaction of legal obligations in World War II treaties; (3) trade in less advanced producer goods, engendering the set-up of whole factories and organizational plans, would call for proportionate poltrade values in the order of dismantling the Berlin Wall, Russian, Czech, etc. exodus from Cuba, the withdrawal of USSR troops from Hungary and other captive areas, a vastly expanded cultural exchange program, proven Red support of subversion in Vietnam, etc.; (4) trade in consumer goods would also be differentiated on scales of regency, quality, and quantity and proportioned in terms of prevailing conditions and acts of religious oppression, slave labor employment, civil suppression, unjust

E.g. Rowland Evans and Robert Novak, "Liberalizing of Export Act Is Given Chance as Trade Eclipses Ideology," Syndicated column, July, 1969.

arrests and imprisonment of Free World citizens, atrocities, the need for rehabilitating political prisoners and so forth.

These are the four general categories of poltrade application into which further specific poltrade bids would be fitted as developments and circumstances demand. Another manifest advantage of such constant predication is that the real cause of our foremost problems today will be kept in the forefront of world attention and thought. Except for a complete embargo and its justifying reasons, this is not the case with the other alternatives; indeed, they submerge these causes into temporary oblivion. Again, the argument that the empire would refuse to trade under such poltrade conditions misses the whole, crucial point of trade as a weapon for real freedom and the tremendous leverage possessed by the West. Pursuit of the present course means endowing the Red economies with intangible values of shortened time and reduced real costs of development without, in this dimension, receiving anything in return except the spurious satisfaction of believing that dispersed contacts would lead to "greater understanding" and "evolution toward peace." Also, in the cold war context, to literally aid them to undermine us in time and every where is the height of folly, a fact that can easily be impressed on our allies. Rationally, a quid pro quo is demanded in these dimensions and can only be realized through advanced bargaining for counterpart, intangible freedom values. If the Red states are desperately in need of this trade, as they indicate to be, the best test of their determination is this quid pro quo approach.

As mentioned earlier, the formula's application would, of course, receive detailed treatment in relation to each Red state. If Hungary, for example, seeks Free World trade, in addition to the items stated above there are the genocidal abortion laws, the case of Cardinal Mindszenty, the reduction of the Iron Curtain, release of political prisoners, freedom of assembly for the Petofi Circle and others and a reciprocal distribution of U.S. literary output in Hungary. The same detailed treatment can be applied to any other Red state. To settle, as some "high Administration official" suggests, for "Soviet goodwill in defusing the East-West German impasse over holding West Germany's presidential election in West Berlin; Soviet help in searching for the victims of the U.S. flying Pueblo . . .; Soviet goodwill in trying to find some workable peace formula for the Middle East. . ." means to settle for hollow appearances at the complete sacrifice of substance.38 How easily a "high Administration official" can be duped. Doubtless, in enforcing our idea, the totalitarian regimes will cry about "interferences in internal affairs," their "national sovereignties" and the like, but these protestations are thoroughly arid in the light of history, the empire network, the basic solidarity of the entrenched Communist Parties, and the international Red conspiracy.

Lastly, the structure of positive Free World poltrade would to a notable degree be erected by the initiative and leadership of the U.S. and its poltrade policy. Though the structure should be built concurrently with the adoption of the policy, unilateral U.S. action would itself become a constructive, efficient cause for the moulding of the institution. The objective is, of course, a unity of action primarily with our West European allies, and there are numerous loverages of favor and disfavor to apply for such unity. The present lack of such unity is to a great extent ascribable to our own failure in providing the necessary leadership in the Cold War, over and beyond the military umbrella and foreign aid. A new, concentrated initiative by us should aim at the formation of a NATO Council on Free World Trade. The move would undoubtedly infuse a new life of working partnership in the Atlantic community. To maintain, as one senator has, that the Cold War is over and that trade restrictions are no longer in order is indicative of the folly of our present thinking.39

The Council's prime function would be a multi-lateralization of the poltrade policy. Free World countries, such as Japan, would be included as associates. Japan has been pushing its trade with the empire (Japan's 1968 trade with it increased 15 per cent over 1984 and amounts to less than 7 per cent; about $400 million with Red China, jumping 60 per cent over 1964, $30 million with North Korea, and small amounts with North Vietnam). With this economic

Warren Unna, "Nixon Opposes Freer Red Trade." The Washington Post, June 30, 1969. Sen. Warren G. Magnuson, "Introduction of The East-West Trade Relations Act of 1969," Congressional Record, May 27, 1969, p. S5768.

power assembled, in the ratio of 3 to 1 to the entire Red Empire, the so-called Communist economic offensive would become a sterile exercise as the Free World market, particularly in the underdeveloped areas, becomes in every sense a true, free market. The new structural framework would, with qualification, accommodate the inclinations of our allies as expressed, for example, in a resolution by the six-nation Common Market Assembly stressing "the political and economic importance of trade relations with state-controlled trade, in particular with neighbor countries of East Europe, and the desirability of developing them"-yes, toward genuine freedom. Canadians selling $403 million of wheat to Red China, Italians buying natural gas from the USSR, Greeks selling wheat to Bulgaria, and multiplying day-to-day reports on unconditional Free World trade with the empire would receive an entirely new assessment under the sway of a rational poltrade policy.

Only thirty years ago we substantially committed the same trade mistake with another breed of totalitarian powers. This time it is even worse because of the cold war subtleties involved and the trained capacity of the enemy to compound the use of his relatively inferior resources. In the final analysis, the requirements of the present situation are a firm understanding of Red economic strategy, the launching of a poltrade policy to counter this strategy, and a national will to see it through. Frequent comments on the current disunity, the alleged ambiguity of strategic materials, and "our allies are trading with them" are only convenient rationalizations for less than firm action in behalf of expanded world freedom.

President Calvin Coolidge, who showed more long-run insights than some short-sighted historians credited him with, stated at the beginning of the USSR as an imperial state that "Our Government does not propose to enter into relations with another regime which refuses to recognize the sanctity of international obligations. I do not propose to barter away for the privilege of trade any of the cherished rights of humanity. I do not propose to make merchandise of any American principles." 40 Those seeking the swift buckdirectly or by U.S. Government guarantee-are merchandising our principles. Let's see what more Coolidge said about principles-in our concluding chapter.

Senator ROTH. I don't know how good my pronunciation is, but at this time I would like to hear from Mr. Barbu Niculescu, who is secretary general, League of Free Romanians.

STATEMENT OF BARBU NICULESCU, SECRETARY GENERAL, LEAGUE OF FREE ROMANIANS

Mr. NICULESCU. I am trying to reduce the 10 minutes to as short as possible, Mr. Chairman.

The elements of the world economy have changed drastically in the last few years and are now in the process of searching for new rapports and balances in the world.

As I testified last year in the Ways and Means Committee on the same bill, it is appropriate that the changes on the economic scene be encountered here in the United States by a more dynamic and efficient system in order to deal expeditiously with the new problems they raise.

The bill is advancing a series of urgent proposals to meet the new world trade situation. Under the scrutiny of the Senate, the bill is responding to a pressing necessity. Supporting it I express a general opinion of Americans who are aware of its importance and who are interested in trade both here and abroad.

Particularly relevant to the projects I am associated with, is an item which deals with equal tariff treatment for Romania, mentioned on page 12 of the bill.

40 Annual Message to Congress, December 6, 1923.