Ship sails for Soviet port, defying U.S.

Press, 28 August 1982, Page 8

Ship sails for Soviet port, defying U.S.

PiZrA rans The French freighter Borodine headed for the Soviet Baltic port of Riga yesterday with a cargo that provoked the first United States sanctions against West European companies supplying equipment for the Siberia gas pipeline. As the freighter left Le Havre with three pipeline compressors in its hold, America announced a “temporary" ban on exports of American technology and goods to the manufacturers, Dresser France and CreusotLoire, a prime contractor for the controversial pipeline to Western Europe. Britain, West Germany, and Italy have all ordered their firms to proceed with contracts for the pipeline, in defiance of sanctions ordered by President Reagan in

response to the Soviet involvement in the military crackdown in Poland. The British firm John Brown is due to ship turbines for the pipeline this weekend, as the Borodine nears the end of its four-day voyage to Riga. American-owned Dresser France delayed the shipment for three days as diplomats tried to avert a damaging confrontation between France, which ordered the Borodine to sail, and Washington, which warned the French and the company of swift retaliation fOr defying the sanctions.

The “temporary denial” order against Dresser France had been widely anticipated, but the export ban against Creusot-Loire, a French company, came as a surprise. The United States Commerce Department under-

secretary (Mr Lionel Olmer) said that that company had “aided, encouraged and abetted” the shipment of the compressors, adding that other penalties, including fines and criminal suits, had not been ruled out. President Reagan ordered United States firms and companies using United States licences to halt shipment of parts for the multi-billion dollar natural gas pipeline project last June. His action angered the West European governments, who said that the embargo had no legal basis and disrupted western allied policy. The French Industry Minister (Mr Jean-Pierre Chevenement) who had taken the legal responsibility for Dresser France’s actions, warned the United States against reprisals that could lead to a trade war. France

could only win if such a war took place, he said. European diplomats in Paris said that they believed the Reagan Administration would come to accept that its embargo was inflicting greater damage on the N.A.T.O. alliance than the Warsaw Pact. Washington had the means to cause serious short-term damage to European companies if it chose tough reprisals, they said. But a prolonged feud would disrupt established trade links and severely shake the alliance, handing the Soviet Unison a windfall propaganda coup. The French Government is expected to issue formal orders to three other companies, sharing in SUS7OO million of Soviet pipeline contracts that went to France, to fulfil their contractual obligations.