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PASTOR GENERAL'S REPORT, JULY 9, 1982
PAGE 6
relations at risk and making the Versailles Economic Summit a
pointless farce.
Mrs. Thatcher managed to water down those
terms. But Britain drafted�� law preventing British firms
from obeying � Rea � an order.
!!:!.!
West German government is
considering challenging the U.S. sanctions before !n inter
national court. Senior West German officials suggest the Euro
pean backlash could spill over into defense, making it difficult
for Bonn to maintain support for U.S. arms policies.
Reagan has almost no chance of keeping Soviet gas out of Western
Europe. � most his � sanctions will merely delay the 1984
target date. --nfc>st estimates place the delay at about two years
in order"to accommodate redesign of the compressor turbines.] The
Soviet Union could simply supply its own turbines. As one west
German industrialist put it: "If the Russians can put men into
space, they certainly won't balk at building a few rotor blades."
The Soviet Union has built gas compressor stations for 30 years.
The DAILY TELEGRAPH in Britain reports that the Common Market Commission is
planning to coordinate lawsuits from member states challenging the U.s.
decision. The NEW YORK TIMES, in a report in its June 26 issue, highlights
some hyp-:x:risy in the American position adding that
Most trade experts say the new policy extends American control
beyond what is allowed by international law. The new policy bas
ically treats foreign subsidiaries of American corporations as if
they were American companies themselves, in asserting the right
to forbid them to sell goods to the Soviet pipeline builders.
This is bound to infuriate the countries in which the subsidiar
ies are situated, particularly since the United States Supreme
Court took exactly the opposite position earlier this month, rul
ing that American subsidiaries of Japanese corporations are
American companies, not Japanese ones. The ruling came in a case
involving hiring practices.
What many trade experts find the most troubling of all is that the sanctions
are being applied retroactively in the case of the foreign holders of U.S.
licenses.
The French company holding the license to build General
Electric-designed rotor blades had been told years ago that it only had to
be "cognizant of United States regulations." The question is: Cognizant
of regulations at the time of acquiring the license?--or of subsequent
rules change•, after multi-million dollar contracts have been signed?
West German political and economic leaders have vociferously denounced the
Reagan Administration pipeline decision. Manfred Lahnstein, Bonn's Finance
Minister, accused the U.S. of failing to observe the sovereignty of other
states. Eugen Laderer, head of the big metalworkers' union, I.G. Metall,
accused the U.S. of seeking to carry through its policies towards the East
"on the backs of European workers." He urged Bonn to do all in its.power to
counter Washington's "insolent" embargo strategy.
Herr Otto Wolf von
Amerongen, president of the West German Industry and Trade Congress, said
in an interview that German and other foreign firms would now have to think
twice before taking out licenses in the future.
West German politicians, from Chancellor Helmut Schmidt on down, believe
that President Reagan's credibility has been undermined--tragically