US talks free trade, but curbs remain tempting tools

Sometimes its tough to be the United States. You try to set an example of free trade, and what happens? A tidal wave of Toyotas washes over Detroit. You call up your allies to warn them about Russia, and what do they talk about? Interest rates. Always interest rates.

Short of missile-rattling, how do you influence the rest of the world?

One thing you can do is turn off the spigot of US trade.

"I don't like to use the word 'weapon' when referring to trade policy," said Secretary of State Alexander M. Haig Jr. He paused, projecting a tough yet diplomatic air. "I would refer to it as part of an integrated approach."

Lifting a grain embargo here, helping slap on Japanese auto quotas there, the Reagan administration has emitted conflicting signals on how it intends to integrated trade and foreign policy. Mr. Haig, appearing before a committee of senators, talked about how the State Department might use trade to deal with current foreign policy problems: East-West trade. "Our trade relations, and our broader economic relations, must reinforce our efforts to counter the Soviet Union's military buildup and its irresponsible conduct in a number of areas of the world," Mr. Haig said. "While clearly we have commercial interests which must and will be taken into account, security concerns must remain paramount."

("It's better than firing off an ICBM, isn't it?" said one expert, reacting to the statement.) Cuba. Haig said Cuba's recent bellicose behavior precluded any lossening of current trade sanctions there. In fact, Haig said, "Perhaps we should be looking at further tightening." South Africa. Liberals have critizsed administration officials for being overly chummy with South Africa. Haig said the resource-rich country is important to the free world and that, "in general, we're oposed to trade sanctions against South Africa." China. Questioned about a possible increase in Chinese trade, Haig retreated behind a fog of metaphors, saying that China is already an important trading partner but that progress "must be increased in an evolutionary way." West German-USSR natural gas pipeline. The US fears that the proposed natural gas pipeline between the Soviet Union and West Germany might make Western Europe more strategically vulnerable. But Haig, always tactful when dealing with European issues, said it would be "presumptuous" for the US government to try to set a pipeline agreement. He did admit the Reagan administration had "urged [ the West Germans] to consider other alternatives" (such as American coal and nuclear technology) before proceeding. Poland. How will the Western allies react if the Russian Army spills across the Polish border? Haig said there has been "intensive consultation to put together a range of contingency responses," but did not say what those contingencies were. If trade sanctions were imposed, Haig admitted, there would be inevitable damage to Western economies, but claimed that "our vulnerability does not match the results of allowing another blatant act of aggression."

Asked if he would fabor refinancing Poland's substantial Western debts, he said only that the believes the US will have to "deal with this problem for a substantial period of time."

"As things get tense, the knuckles of our financial officials get quite white over this matter," Haig said.

The US has a long history of using economic sticks and carrots to achieve its foreign policy goals.

For the most part, America's goals have been "unaccountably generous," according to one expert, who cited the Marshall Plan of the 1940s as the most famous example of American largess.

"Along about '60s, we should have changed our policies. We didn't," says Penelope Hartland-Thunberg, a senior fellow at the Georgetown Center for Strategic and International Studies.

In the first glimmerings of the Reagan policy "I see a much more up-to-date recognition of the world of the '80s," she says.

Others say trade sanctions are a doubtful foreign policy tool, if one expects immediate and concrete results.

"To think it will topple a government is quite fatuous," says Philip Trezise, a longtime diplomat now with the Brookings research institution. "I suspect [ the Reagan administration] has more people who have a rather naive view of specific results one gets with manipulation of trade."

On the other hand, "There's no foreign policy problem confronting any government today that doesn't have some economic component," says one expert.