Trade Gap Cut Seen in East Europe Sales : Mosbacher Predicts Narrowing of U.S. Deficit in New Markets

U.S. Commerce Secretary Robert A. Mosbacher today predicted that reforms in Eastern Europe will have a favorable impact on the U.S. trade deficit in the coming decade.

Mosbacher said newly opened markets in Eastern Europe could help “bring us very close to a trade balance.”

But he said an immediate impact will be limited due to the lack of hard currency available to Eastern European countries.

“Short term, they don’t have the hard currency to do a huge amount of buying,” Mosbacher said.

He declined to discuss prospects for the dollar but noted that U.S. currency is just one component of the trade equation.

Mosbacher also forecast the U.S. economy will become increasingly less dependent on defense-related industries because of East-West disarmament. He said non-defense exports would have a growing role.

The official, who was in Hanover to attend CEBIT, the world’s largest high-technology fair, said there are good investment opportunities for U.S. companies in Eastern Europe.

He singled out telecommunications technology, which he said is “necessary for economic democratization.”

But he warned that U.S. companies should not expect immediate returns on their investments. He said Western companies could expect to wait about five years before turning a profit.

“I’m very negative about people who expect short-term returns for everything. I would not recommend that anyone go into Eastern Europe hoping to double their money,” he said.

Separately, he said Western nations could reach an accord as early as June on relaxing restrictions on the sale of high-technology goods to Eastern Europe.

Mosbacher said he and West German Economics Minister Helmut Haussmann have agreed there must be “differentiation” on COCOM restrictions for East European countries and those applied to the Soviet Union.

COCOM is the acronym for the 17-nation Coordinating Committee for Multilateral Export Controls that restricts Western high-technology exports to East Bloc countries.

“I see a shortening of this list down to things that are essential to our security,” Mosbacher said.