Foreign Policy Benefits from Subsidization of Trade with Eastern Europe

by Benjamin Zycher

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This study examines economic policy tools with which the United States or NATO collectively might reduce the prospective political/military reliability of the non-Soviet Warsaw Pact (NSWP). It argues that growing long-term economic relations between the NSWP and the West could have just such an adverse effect on reliability from the Soviet viewpoint. Since a reduction in NSWP reliability is consistent with a strengthening of deterrence, promotion of growing economic ties with Eastern Europe may serve U.S. and NATO interests. This policy would differ from the current "differentiation" policy pursued by the United States in that it would not attempt to shape NSWP behavior through a system of positive and negative incentives. Instead, it would attempt to exacerbate Soviet concerns about NSWP political and military reliability by expanding economic ties between the NSWP and the West in a long-term evolutionary fashion. The author identifies four examples of areas for trade expansion with Eastern Europe: pollution control equipment, nuclear power safety equipment, medical supplies and equipment, and promotion of joint business ventures.

This report is part of the RAND Corporation report series. The report was a product of the RAND Corporation from 1948 to 1993 that represented the principal publication documenting and transmitting RAND's major research findings and final research.

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