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EAST-WEST TRADE: The Great Ripoffsky

3 minute read

For American businessmen, the lure of the Soviet market is so great that not even political crisis can impede their desire to sell. At the height of last month’s Middle East war, when Soviet-supplied SAM missiles were chasing U.S.-made Skyhawks over the Sinai, the largest U.S. industrial exhibit ever staged in the U.S.S.R. went through its scheduled ten days as smoothly as sour cream. Just as in previous years, the enthusiasm of American exhibitors was dampened neither by staggeringly high exhibit costs nor some suspiciously detailed questions from many of the 50,000 Soviets (mostly technicians) who came to drink in Yankee expertise.

The U.S. businessmen knew that when the Communists bought they would buy big. So far this year, Soviet purchases from U.S. exhibitors have included $68 million worth of Caterpillar earthmovers and $25 million worth of International Harvester compressors and generators. At best, such sales have not come easy. One European businessman, who has been drumming in the U.S.S.R. since 1966, estimates that most sales take 18 months from “expression of interest to closing the contract.” Officials of one Soviet ministry asked a U.S. company to develop a special alloy able to withstand temperatures of — 58°F. for use in the Siberian oilfields. At no little expense, the company developed the alloy; the Soviets never bought.

Businessmen must also contend with elements of rip-off and racket. Rates for space at Sokolniki Park, Moscow’s exposition center, are about the same as at halls in the West. But the Russians load on charges for utilities, services, security and labor that make costs three to four times higher than for a similar show in Chicago or London. At last month’s exhibition, 100,000 sq. ft. of space cost $130,000, v. about $30,000 for the same space in the U:S. Labor rates would make capitalists blush: workmen were paid $5 a day by the state, which charged $30 a day for their services.

Camera Bugs. Soviet window-shoppers at the fairs have voracious appetites for brochures, catalogues and specification sheets—sometimes to a suspicious extent. Some exhibitors worry that their products will be copied instead of bought. Said one Houston chemical engineer at last month’s fair: “I just had to plain tell them, Those are company secrets, my friends.’ ” A salesman of drilling bits complained: “They photographed our exhibit four times.”

Probably the most outrageous rip-offs are “seminars,” at which American exhibitors are invited to lecture. Usually they happily accept, and afterward are stuck with some unexpected bills.

One engineer was charged $300 for the rent of the hall in which he was invited to speak. Another had to pay $100 for the interpreter* that the Russian technicians in his audience had brought with them. American businessmen are likely to grimace and bear such tactics because they see still a bigger opportunity to sell to the Soviets. Russian planners, worried about their country’s inferior technology, are recommending that the U.S.S.R. do more than merely buy goods. They did just that last week, announcing the purchase of a complete petrochemical plant from the C.E. Lummus Co. and Monsanto. The negotiations took over two years.

* Translation can also be embarrassingly erroneous. At the recent exhibition, Otis Engineering Corp. wondered why its display won Soviet sniggers as well as praise. The answer: a thoughtless translator had rendered a sign saying Completions Equipment as Equipment for Orgasms.

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