Soft line on U.K. firm urged

Press, 1 September 1982, Page 8

Soft line on U.K. firm urged

NZPA-Reuter New York Two of President Ronald Reagan’s Cabinet members were urging him not to be too tough on . a British- company if it broke his embargo on equipment for the Soviet gas pipeline, the “New York Times” said yesterday. The Secretary of State (Mr George Shultz) and the Commerce Secretary (Mr Malcolm Baldrige) were said to have made the suggestion in a telephone call to the President, who is on holiday in California.

They had wanted John Brown Engineering barred only from receiving American products related to oil and gas technology, it

said: This penalty would be lighter than that imposed last week on the French subsidiary of Dresser Industries, of Dallas, Texas, and the Paris-based CreusotLoire, which were banned from buying any goods and services from the United States. Explaining the two Cabinet members’ reasons, the “Times” quoted an Administration official as saying: “The full denial order could destroy the firm, and the British are good allies.” A Soviet freighter docked at Glasgow yesterday to load Sment for the pipeline, a : of Britain’s decision to defy the American embargo.

The freighter will collect six gas turbines made by Brown. Like the French Government, Britain had ordered Brown to go ahead with the shipment. The turbines, the first of 21 on order, are being built under licence from an American firm, General Electric, and they include some American-made parts.

Brown has several subsidiaries in the United States which might be hit by Mr Reagan’s reprisals.

Three other British firms — Baker Oil Tools (United Kingdom), Smith International (North Sea), and American Air Filters — also have contracts to supply

equipment for the project, which will pipe natural gas from Siberia to Western Europe. The French freighter Borodine arrived in a Soviet port yesterday with three gas compressors for the pipeline. The American attempt to embargo equipment for the project is said to be'a protest against the imposition of martial law in Poland, which Mr Reagan blames on Moscow’s influence.

Washington also argues that the pipeline will make Western Europe overly dependent on the Soviet Union, and will, by earning hard currency for Moscow, indirectly support Soviet military spending.