Create a Floor Gorbachev Can Stand On : Trade: A Western credit pool would buy time for the Soviet leader to build a market economy.

The reluctance of President Bush and his Administration to join our NATO allies in creating a trade credit pool for the Soviet Union is mystifying, to say the least. It is manifestly more puzzling when we consider that virtually all Western leaders, including now the new democratic leaders of Central Europe, are unanimous in their judgment that Mikhail Gorbachev’s success is in our collective interest.

Bush joins British Prime Minister Margaret Thatcher in a lonely defense of inaction by saying that aid should not be provided until after the Soviets reform their economic systems. But he has the process backwards. Only after constructing a base-line floor under the average Soviet citizen’s standard of living can Gorbachev hope to carry off the painful transition to market systems.

That floor cannot be self-constructed at any time in the foreseeable future. It can only be built with outside help. Trade credits are not gifts, grants or handouts. They must be repaid. Up until the past, troubled six months, the Soviet Union’s credit rating was excellent. A pool of trade credits could, and should, carry strict conditions, including repayment in a reasonably timely period; also, they should be limited to specific consumer goods, with those goods to be purchased from the creditor countries.

Terms might, for example, call for a multinational pool of some $3 billion to $5 billion each year for three to five years. The U.S. contribution needn’t be more than $1 billion to $2 billion, if that. (Gorbachev is now saving us about 10 times that amount in defense reductions.) The Germans, French and Canadians have already committed the bulk of the total amount. We, the British and the Japanese can readily make up the difference.

If used to buy food, clothing, pharmaceuticals and other basic necessities, this credit pool would not only create jobs and profits for American farmers and workers; it would also put consumer goods on Soviet shelves during the time frame Gorbachev needs to revolutionize his economic structures.

After five years, vast elements of Soviet farmland could be privately operated and productive, manufacturing enterprises could be self-managed and productive, defense industries could be switched to domestic production, and the ruble could be on its way toward convertibility.

Wouldn’t trade credits simply let Gorbachev continue military spending at present levels? The simple answer is no. The rubles he uses to pay his defense establishment are virtually useless in Western consumer markets. Besides, he has already told his unhappy generals to plan for continued large cutbacks in spending for years to come.

The most important economic goal for the Soviet Union is a convertible currency. That cannot be achieved without substantially increased productivity. Productivity cannot be achieved without privatization and market forces. These reforms cannot be achieved without a social safety net for those hardest hit by inflation, unemployment and dislocation brought on by the traumatic transition from a centrally controlled socialist economy to a market economy. This safety net simply cannot be self-constructed. There are not enough resources at hand.

For Bush to demand drastic reforms before assistance will be provided is to stand the process on its head and virtually guarantee Gorbachev’s demise. If that is our goal, then we are taking the right steps to achieve it.

After his stunning concessions on German reunification and NATO membership--made at great expenditure of personal political capital--what more must Gorbachev do to merit our support? Are our leaders going to lengthen his tightrope forever? If so, then don’t be surprised to find a conservative cabal in power in the Kremlin and a distinctive chill in East-West relations returning this winter.