Principles vs. Pride

The three hutlike wooden crates on Le Havre's Quai de Moselle last week looked unremarkable. But when they were finally winched aboard the French freighter Borodine for a five-day trip to the Soviet port of Riga, they caused an immediate intensification of the long-running dispute between the U.S. and its Western European allies over Washington's sanctions against the Soviet natural gas pipeline. The shipment amounted to an open French challenge of the U.S. embargo: each of the crates contained a French-made and U.S.-designed compressor that will help propel Siberian gas through the 3,000-mile pipeline. It was the first delivery of such pipeline equipment by any Western supplier.

Only 35 minutes after the Borodine set sail, the U.S. Commerce Department placed the two French companies involved in the compressor sale on a "temporary denials" list, a partial commercial boycott that prohibits them from buying any U.S. goods, services or technology. One of the firms, Dresser-France, the manufacturer of the three compressors, is the wholly owned subsidiary of Dresser Industries of Dallas. The other, Creusot-Loire, a Paris-based heavy-engineering firm, is the leading French contractor for Soviet pipeline orders.

The U.S. response was considerably less harsh than it might have been. The Government could have ordered an outright ban on exports to the States by the two companies, along with fines and jail terms for their executives. The action, said Commerce Secretary Malcolm Baldrige, "represents a measured response that we hope will dissuade other firms from violating U.S. regulations."

That was wishful thinking. The next skirmish in the contest of wills was already set to take place in Scotland, where a Soviet vessel was expected to pick up the first six U.S.-designed turbines ordered from Britain's John Brown Engineering Ltd. The British, like the French, are taking a hard line, demanding that their pipeline suppliers ignore the U.S. ban. Said a senior British official: "We are not going to be bullied by Washington."

The French were clearly spoiling for a showdown. President Franc,ois Mitterand's government had on Aug. 10 warned the four French-based pipeline suppliers that they would be "requisitioned" if they bowed to U.S. pressure. Last week Dresser-France was told that it would be the first to be taken over because its Soviet contracts called for the earliest delivery of equipment. Complained John James, chairman of the Texas parent firm, which lost an eleventh-hour battle to block the U.S.

Government from taking action against the company: "The laws of the U.S. are not the laws of the whole world." Designed chiefly to punish the Soviets for their role in the imposition of martial law in Poland, the pipeline sanctions were extended in June to include foreign subsidiaries of U.S. firms and foreign companies holding licenses for U.S. technology. But instead of hurting the Soviets, the sanctions seem to be playing right into Moscow's hands. Observed the French newspaper Le Monde: "Now Mr. Brezhnev can gloat. Less than three months after all that hugging and embracing at the Versailles summit, Western solidarity is shaken to its foundations."

Suddenly, the dispute that President Reagan once considered a "family" squabble is threatening to become an out-and-out row. On both sides, pride and principles are at stake. In Europe, it is a question of jealously guarded sovereignty and large contracts for industries plagued by unemployment. As the U.S. sees it, however, the Soviet-supported clampdown in Poland demands a united show of Western force just as did Britain's war in the Falklands, during which the U.S. joined an allied embargo against Argentina. Perhaps more practically, President Reagan must maintain face. If he is to placate his right wing, already restive over his tax bill and his murky policy on arming Taiwan, he must not be seen as soft on the pipeline issue.

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