U.S. Backs Soviet Market Economy : Reforms: American businessmen will head for Moscow next month to aid Gorbachev.


The United States, responding to Soviet requests for economic assistance, agreed Thursday to bring dozens of top American businessmen to Moscow next month to consult on this country's transition to a market economy.

The agreement, reached between U.S. Secretary of State James A. Baker III and Soviet Foreign Minister Eduard A. Shevardnadze, will commit the Bush Administration and the U.S. business establishment to ensuring the success of President Mikhail S. Gorbachev's economic reforms.

Shevardnadze, meeting Baker in the Siberian city of Irkutsk, discussed the Soviet Union's deepening economic crisis and what assistance the United States could provide as Gorbachev transforms the state-owned, centrally planned, bureaucratically managed economy into one based on entrepreneurship and the market forces of supply and demand.

Vitaly I. Churkin, a Shevardnadze aide, said that the Soviet Union is accepting Bush's offer of assistance, made last December when he met Gorbachev at Malta, and hopes that extensive consultations will result from the next Baker-Shevardnadze meeting, planned for Moscow in mid-September.

Robert A. Mosbacher, the secretary of commerce, will bring a delegation of leading American businessmen to Moscow for that meeting, which will coincide with the annual session of the Soviet-American Trade and Economic Commission. Gorbachev will meet with the group for a strategy session on economic reform and increased trade.

Bush, in renewing his offer of assistance, said recently that the United States is prepared to provide economic advice, to expand technical cooperation and to foster increased trade to underwrite the Soviet Union's economic reforms, but that the United States cannot provide direct economic assistance.

Churkin said that Shevardnadze had outlined a series of areas where the United States could help, starting with government-to-government agreements to provide the framework for increased trade but continuing into extensive cooperation between U.S. and Soviet enterprises as a market economy develops here. Baker had made detailed proposals when he met with Shevardnadze last month in Paris.

U.S. technical assistance might help the Soviet Union solve such problems as getting food to the market; more than a quarter of Soviet agricultural produce rots before it gets to consumers because of inadequate transport and storage facilities.

American specialists might also advise on the development of a commercial banking system, the formation of equity markets to raise capital and modern industrial management.

In other developments at the Irkutsk meeting, Baker and Shevardnadze established a new channel for quick resolution of issues in the negotiations to reduce the two countries' strategic arsenals.

As the negotiators in Geneva proceed through the scores of outstanding questions in drafting a strategic arms reduction treaty for signature by the end of this year, they will now put those requiring political decisions to the ministers' deputies, rather than wait for the ministers' next meeting.

"This new channel does not mean new difficulties," Churkin said. "The principal points of the treaty were agreed in Washington in June. The final preparations of the treaty are now under way, but there are enormous technical difficulties. The point is that the two sides are determined to finalize this treaty as soon as possible."

Shevardnadze formally advised Baker in Irkutsk that the Soviet Union would complete its deployment of mobile intercontinental ballistic missiles in 1991 and thus would halt production of the weapons. Churkin said this should make it easier to agree on rules for verifying compliance with the agreement.

The two ministers also discussed ways to resolve the principal remaining issue--the deployment of warplanes--in the Vienna negotiations on reducing conventional forces in Europe and agreed to consult with their allies in NATO (North Atlantic Treaty Organization) and the Warsaw Pact to see if these could be included in a treaty to be signed at an all-European summit in Paris in November.

Baker and Shevardnadze agreed on a timetable for the preparation of a new Bush-Gorbachev summit meeting to be held in Moscow before the end of the year with the strategic arms control agreement as its centerpiece, Churkin said.

That will propel the two countries to make a number of key decisions in the next four or five months on how their relationship will develop, according to Churkin.

The principal focus of the Irkutsk meetings had been regional conflicts, particularly those in Asia--the Korean Peninsula, Cambodia and Afghanistan--as well as the situation on the Korean Peninsula. Churkin said the result was one of "narrowing differences" but that differences remained.

"Each time the ministers discuss this (Afghan) issue, they find new common ground," Churkin said of the continuing Afghanistan civil war, in which Moscow and Washington supporting opposing sides. "Both agree elections should be held, that the United Nations should play an active role in the settlement and that the process should be under international control."

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