pressure of a military buildup along with diplomatic, economic, and propaganda measures.”
Prevailing meant rearming America with increased military spending, impeding the Siberian pipeline, and reducing Soviet access to U.S. technology. The “concept of prevailing,” said the Times, was also “at the heart” of Reagan’s policies in Poland, Afghanistan, China, and elsewhere. According to the Times, Reagan officials believed that such pressures meant that “in the long run,” victory would be achieved without armed conflict. The article concluded with a prophetic timeline, noting that Reagan officials believed that Soviet economic weaknesses would “intensify toward the end of this decade,” as America regained economic and military strength.58
All of this was exactly right—a testimony to fine journalism and to the fact that what Reagan officials said after the presidency perfectly matched what they said during the presidency. The Times published these observations only three weeks after the release of NSDD-54.
THE ECONOMIC CAMPAIGN FALLS INTO PLACE: NSDD-66
While the Times article stirred up some domestic controversy, to the administration everything remained business as usual, and just before Leonid Brezhnev’s death in November 1982, Ronald Reagan decided to impose limited trade and credit restrictions on the Kremlin. Reagan said that this meant that “none of us”—an overly idealistic reference to the G-7 economic partners—“would subsidize the Soviet economy or the Soviet military expansion by offering preferential trading terms or easy credits,” nor would they “restrict the flow of products and technology that would increase Soviet military capabilities.”59
This thinking, which was manifest in September’s NSDD-54, was also evident in November’s NSDD-66— another product of Bill Clark’s NSC, where it was written chiefly by Roger Robinson.60 In the strongest form to date, NSDD-66 formally authorized comprehensive economic warfare against the USSR. Robinson called the directive the “centerpiece” of the economic strategy.61 In the words of the CIA’s senior economic warfare strategist, Henry Rowen, the intent of NSDD-66 was to “cause such stress on the [Soviet] system that it will implode.”62 Championed by Clark, Casey, and Weinberger, the directive found warm reception with the president.
The directive was declassified in 1995, sooner than expected given its aggressive nature and the fact that its circulation was restricted to a small group of individuals.63 (This also means that only a few Reagan officials knew how all the components fit together.64) Reading the document, however, it is not surprising that it was declassified so soon: It is written vaguely enough to seem almost innocuous.
Not at all innocuous were the destructive implications unleashed by the document’s subtle language. What Reagan authorized in signing NSDD-66 was nothing less than a full search for means to destroy vital elements of the Soviet economy, authorizing an all-out search-and-destroy mission. Until NSDD-66 was declassified with the harmless title, “East-West Economic Relations and Poland-Related Sanctions,” the working title of the NSDD was the more provocative (and accurate) “Protracted Economic Warfare Against the USSR.”65
Beginning auspiciously with the statement: “This framework agreement will govern East-West economic relations for the remainder of this decade and beyond,” it was clear from the onset of the document that within the farsighted text of NSDD-66 lay the potential to win the Cold War.66 The directive sought formal commitment from leading Western European nations “not to sign or approve any new contracts for the purchase of Soviet gas” during a period specified in the NSDD. More specific language in NSDD-66 talked of reaching an agreement to “not commit to any incremental deliveries of Soviet gas beyond the amounts contracted for from the first strand of the Siberian pipeline.”
In addition, NSDD-66 set forth three other objectives with Western European allies, the first of which was to gain agreement to add as many critical technologies as possible to the COCOM list. COCOM, the Coordinating Committee for Multilateral Export Controls, was created early in the Cold War to restrict certain Western exports to the Soviet bloc, particularly hightech products. NSDD-66 looked to harmonize allied coordination in enforcing the COCOM product list and to produce an improved, effective list of results. The second objective of NSDD-66 was to secure an agreement on limits to advanced technology and equipment that went “beyond the expanded COCOM list,” with, again, more emphasis on the oil and gas sector. Finally, the directive sought agreement among OECD countries (largely Western nations) to “substantially raise interest rates to the USSR to achieve further restraints on officially backed credits such as higher down payments, shortened maturities and an established framework to monitor this process.”67
NSDD-66 had two tracks, one concerning action by the Reagan administration and the other involving Western European allies. Unfortunately for the Reagan team, Western Europe resisted much of this ideological- economic warfare. And, in fact, the NSDD acknowledged that the governments of the UK, West Germany, France, and Italy, not to mention Canada and Japan, had stated explicitly, “That it is not their purpose to engage in economic warfare against the USSR.”68 Still, this resistance never diminished NSDD-66’s success. Overall, it was quite effective as a license to Reagan staff to identify Soviet economic vulnerabilities, even if the United States had to act alone.
Indeed, the administration was gung ho in its endeavor to act in its own best interest. Another section of NSDD-66, headed “Preparations within the U.S. Government,” identified SIG-IEP as the group “responsible for the attainment of U.S. objectives in the context of the work program.” That dry language masked a malicious intent: so-called “interagency working groups” would be established under the supervision of SIG-IEP “to develop U.S. positions and strategies for the achievement of these objectives.” In addition, “a working group will be established for an overall study of East-West economic relations in the context of political and strategic considerations.” Through SIG-IEP, these working groups would submit to the president (for approval) various “strategies for attaining U.S. objectives.”69
While the specific language of the directive may have been vague, its implications were not. In essence, the directive created an infrastructure to identify and exploit Soviet economic vulnerabilities—actual groups were established for that purpose. Though it was not as large scale, the directive was somewhat akin to the National Security Act of 1947, which authorized the creation of entire departments and groups like the NSC, CIA, and Joint Chiefs of Staff, to meet the new requirements demanded by the new war—the Cold War. Here, in late 1982, NSDD-66 spawned smaller groups for the new war silently declared by the Reagan team—the U.S. economic war against the USSR. Some of the strategies and efforts identified by these groups were pursued with the support of allies; others were not, and instead were achieved unilaterally by the administration or bilaterally with countries inside or outside Western Europe and the OECD.
Exploring where the most damage could be inflicted, Roger Robinson identified what he called the “strategic trade triad” of three critical Western resources that Moscow relied upon: bank credits, high-tech exports, and hard currency from energy exports. Among them, most vulnerable was the Soviet dependence on energy exports, which the administration was already exploiting and would continue to exploit in a number of ways.
As a result of these dependencies, there were many practical effects of NSDD-66; the Reagan administration proved to be quite successful at reducing Soviet access to Western technology. It pushed for much more vigorous prosecution of technology theft cases in order to disrupt sales of U.S. technology to Moscow; and this newly aggressive stance in fact caused a dramatic spike in the overall number of cases that were prosecuted. During the 1970s, only two or three theft cases were prosecuted by the federal government, but by January 1986, the Reagan Department of Justice was prosecuting more than 100 cases per month.
The administration also worked to limit the number of high-tech goods that could be legally shipped to the Soviet bloc, through the addition of twenty-six items to the U.S. Commodity Control List. Reagan’s team also applied substantial pressure on allies and trade partners, including neutral countries like Switzerland and Sweden, in an attempt to limit their role as a transshipment point for high-tech materials headed to Moscow. COCOM, which included all NATO countries (except Iceland) and Japan, also tightened the controls on technology.70
The results were substantial: According to the U.S. Department of Commerce, in 1975 roughly 33% of all U.S. goods exported to the USSR were high-tech products, amounting to $219 million in sales. By 1983, the number dropped nearly seven-fold to 5%, dwindling to a paltry $39 million. By the fall of 1983, U.S. Customs agents seized some 1,400 illegal shipments headed to Moscow, valued at roughly $200
