U.S. softens ban

Press, 3 September 1982, Page 6

U.S. softens ban

NZPA-Reuter • Washington President Ronald Reagan has moved to prevent a serious breach with his European allies by softening sanctions against companies aiding the building of the Soviet gas pipeline to Western Europe? Last week the Commerce Department barred exports of all American products, services and technology to a French firm and the French subsidiary of an American company which, on the orders of the French Government, had defied the sanctions. The Treasury Secretary (Mr Donald Regan) said yesterday that the sanctions had been too sweeping and that the ban would apply only to exports of oil and natural gas equipment and technology. He denied that the Administration was backing down. The action, which came a day after the State Depart-

ment insisted that there would be no back-tracking on the sanctions, seemed unlikely to do much to ease the deepening dispute between the' United States and its allies. The new, limited sanctions are expected to be applied to the British firm of John Brown Engineering, which made pipeline equipment now being loaded on to a Soviet freighter in Scotland. The sanctions issue is certain to arise again later when pipeline equipment is shipped by Italy and West Germany. American ■ sanctions against the 5700 km line, which will carry natural gas from Siberia to various West European countries, were imposed because of the alleged Soviet role in the Polish military crackdown in December. Mr Reagan extended the sanctions in June to apply to foreign subsidiaries of American firms and foreign

companies making United, States-designed equipment. The action outraged the governments of the four allied countries involved — France, Britain, West Germany, and Italy — and all said they would defy the sanctions. In Glasgow the British Prime Minister (Mrs Margaret Thatcher) yesterday gave a defiant reply to Mr Reagan’s sanctions. “We will stick to that deal. We want to deliver, we shall deliver.” 1 More turbines on order are being delayed because Mr Reagan has banned an American firm from supplying a vital part. “I now feel particularly wounded by a friend,” she said. She had told Mr Reagan that the deal would go ahead, “especially since you in the United States are delivering wheat.” John Brown would be compensated if the Soviet deal fell through.