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U.S., Soviets Plan to Focus on Trade Ties : Diplomacy: Negotiations beginning Monday are expected to result in most-favored status for Moscow.

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TIMES STAFF WRITER

The Bush Administration will begin formal negotiations with the Soviet Union next Monday on a comprehensive trade agreement designed to pave the way for a normalization of trade relations between the two countries by early summer, U.S. officials said Wednesday.

The talks, promised by President Bush during his summit in Malta last December with Soviet President Mikhail S. Gorbachev, are expected to lead to restoration of most-favored-nation trade status for the Soviets at the two leaders’ June meeting.

They also will ease the way for the Soviets to gain observer status early in 1991 in the 97-country General Agreement on Tariffs and Trade, a Geneva-based organization that monitors and administers world trade. Such status is a prelude to eventual membership.

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Receiving most-favored-nation status means that the Soviet Union would be eligible for the same sort of low tariffs and other trade preferences that the United States grants to its closest trading partners. U.S. tariffs on Soviet goods would be cut to an average 6.7% from 34%.

The talks with the Soviet Union, to be conducted by U.S. Trade Representative Carla A. Hills, follow a promise by Bush at Malta that Washington would normalize trade relations as a reward for Gorbachev’s efforts to begin reforms in the Soviet Union and Eastern Europe.

U.S. Secretary of State James A. Baker III, traveling in Eastern Europe, announced that the United States would extend most-favored-nation status to Czechoslovakia as part of a package of concessions to the new government in Prague. Hungary already enjoys that status.

The Soviets have been seeking most-favored-nation status and observer status in GATT for several years. U.S. officials cautioned, however, that attaining observer status in GATT would not necessarily guarantee that the Soviets would be admitted into full membership very soon. Observer status is an apprenticeship period that can last for years.

“What the United States has in mind (for the Soviet Union) is observer status in a very literal sense--that is, observing and seeing what goes on,” a senior U.S. official said. “Nobody thinks that the Soviets have any chance (for full-fledged membership) in the foreseeable future,” he said.

Both the United States and other Western countries have insisted repeatedly that Moscow will have to make sweeping economic reforms before it can become a full-fledged member of GATT. Current global trade rules are difficult to put into practice under a Communist system.

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U.S. analysts said the major benefit for the Soviets of receiving most-favored-nation status initially would be political and psychological, in part because Soviet goods are so shoddy it is doubtful they would be able to sell much even with lower tariffs.

“There’s a serious question as to what they’ll be able to market in this country,” a senior U.S. trade official said. Moscow currently ships only a handful of products to U.S. buyers--furs, textiles, vodka, caviar and some ores and metals.

There also is some doubt about how much the Soviets would be able to increase their import-buying. Moscow primarily wants to purchase more high-technology goods and electrical machinery, but such items may be restricted indefinitely by limitations involving national security.

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