As a result of its own internal review and a survey of over sixty
private sector participants, HUD, in late 1983, concluded that the
Agreement should be renewed. This decision resulted from a weighing
of benefits and costs of the Agreement and an understanding of how
it can be made more effective, by focusing on more clearly defined
technical areas. This assessment was confirmed by an interagency
review coordinated by the State Department's Office of Soviet Affairs.
While there are few general areas of Soviet technology with immediate
application to the U.S., several specific areas have been singled
out by American private-sector participants as useful to them in the
industry's developmental work. These non-strategic technologies in-
clude, among others, construction in permafrost areas, earthquake
zone buildings, district-size and integrated utility systems, low
energy use designs and technologies, and the use of large scale
models for research in building design. Technical experts in HUD
and other participating agencies generally concur in this assessment.
Under this agreement the U.S. has benefitted in some projects, while
the U.S.S.R. has benefitted on others. HUD has attempted to ensure
a mixture of projects which would yield a balanced outcome--with
some benefiting the U.S. side and some the U.S.S.R. The latter
are necessary for the Soviets to continue the exchange in good faith.
In the technical/commercial area, HUD believes that the value of
the Agreement to the U.S. is two-pronged: in field where Soviet
technology has something of interest, the U.S. gains expertise;
where Soviet technology is weak and where exchanges can allow
Americans to demonstrate the superiority of their product, a climate
favorable to Amerian marketing can be created in the U.S.S.R.

As the dominant force in American housing, construction, and urban
development is the private sector, its participation is critical
to the success of many projects under the Agreement. With its own
expertise and facilities, corporate involvement makes the program of
greater interest to the Soviets and more representative of American
development practices. In addition, private sector representatives
are able to assess the potential transferability of Soviet technology
to American industry. In the program's earlier period (1975-83)
several corporations sent representatives to meet with Soviet officials
in the U.S. or the U.S.S.R. Under the new work program (1985-89),
U.S. project teams will once again be composed of experts from private
corporations and technical and trade associations, all paying their
own expenses.

G.

Six senior executives from U.S. private corporations involved in construction and urban development joined Secretary Pierce's delegation to Moscow in September 1985. Their involvement served to underline the importance the Secretary attaches to expanding the commercial potential of this technical exchange program. Reciprocal Soviet interest has only reinforced HUD's plans to work with U.S. business interests that would like to support and utilize this bilateral program.

In order to forge a public-private partnership to reach this goal,
Secretary Pierce has appointed Dr. June Q. Koch, HUD's Assistant
Secretary for Policy Development and Research, as U.S. Coordinator
for Commercial Activities under the Agreement.

FUTURE PLANS

Following the President's desire to build a more constructive re-
lationship with the Soviet Government and to allow U.S. Government
and private experts to assess Soviet designs and technologies, HUD
would like the bilateral cooperative program, agreed to in Moscow
in 1985, to be carried out. If fully implemented, the work program
would continue until late 1988 - early 1989. Unless either side,
following its own internal assessment procedures, decides not to
renew it, the Agreement is scheduled to be renewed on it anniversary
date in June 1989.

While HUD has no plans to expand this technical exchange program beyond it present scope, it does expect a steady expansion of U.S. corporate interest in commercial opportunities in the Soviet Union in areas related to building design and construction technology.

As requested in your letter to Secretary Dole of June 27, 1986, I am pleased to submit a report on activities under the 19731983 US-USSR Agreement on Cooperation in the Field of Transportation.

If you need further information, I suggest you contact Dr. Bernard A. Ramundo (Tele: 366-4398), a member of my staff who served as the U. S. Executive Secretary for the Agreement.

Sincerely,

Enclosure

Matthew VA Seocozza

Assistant Secretary for Policy
and International Affairs

US-USSR COOPERATION IN TRANSPORTATION

HISTORY

Cooperation in transportation between the United States and the Soviet Union began in 1968 with exploratory exchanges of technical delegations in the areas of bridge construction and tunneling, high-speed rail and containerization, and urban transport and the environment. Cooperative activities were formalized by the conclusion on June 19, 1973, of the US-USSR Agreement on Cooperation in the Field of Transportation.

The U.S. Department of Transportation (DOT) and the USSR State Committee for Science and Technology (SCST) were designated Executive Agents for the Agreement. A US-USSR Joint Committee (JC) was established to oversee its implementation through annual meetings, alternating between Moscow and Washington. The JC was composed of officials from SCST and the involved Ministries on the Soviet side and from DOT and the Department of Commerce (where Maritime Administration was then located) on the U.S. side. The SCST was the principal point of contact for DOT. Executive Secretaries for each side were named to manage cooperative program activities in accordance with respective government policies and the decisions of the Joint Committee.

Formal exchanges were launched by the January 1974 meeting of the Joint Committee in Moscow. Working groups in five areas of mutual interest were organized: civil aviation, marine transport, tunnel and bridge construction, rail transport, and highway safety. Specific programs for exchanges of information and delegations in these areas were agreed. During meetings in 1974, 1975, and 1977, programs were reviewed, revised as necessary, and additional working groups established in areas of urban transport, transport of the future (i.e., high-speed rail using magnetic levitation technology), trade documentation facilitation, and hazardous materials transport. There was a year's delay in scheduling the Fourth Joint Committee meeting (1977) due to a deterioration in U.S.-Soviet relations over Angola and senior-level changes on the U. S. side after the election of President Carter.

The Transportation Agreement was renewed in mid-1978 for two years and thereafter for an additional three years.

At the fifth Joint Committee meeting in June 1979, cooperative areas were reviewed and work programs approved in six areas: civil aviation, tunnel and bridge construction, rail, highway safety, transport of future, and hazardous materials transport. The Committee agreed to the U. S. side's proposals to: (a) discontinue work only as the need arose in certain areas of civil aviation, (b) dis

continue the trade documentation working group because it duplicated work being done in international organizations, (c) discontinue the urban transport working group because the exchange of operational experience (under a program recommended by the Soviet side) was irrelevant due to basic differences in national systems, and (d) expand the transport of the future program to include urban research and development topics. The Committee agreed to hold its sixth meeting in April 1980 in Washington.

Most of the activities planned for the 1979-80 period were canceled shortly after the Soviet invasion of Afghanistan in December 1979. Further, in January 1980, the U. S. Government adopted the policy of not scheduling any senior-level meetings with the Soviets, although agencies were requested to maintain technical cooperation beneficial to the United States, humanitarian activities, and continue participation with Soviet counterparts in multilateral forums. This policy was reinforced by the imposition of sanctions following the declaration of martial law in Poland in 1981.

In mid-1983, an 180-day extension of the Agreement was approved to allow time for negotiation of a revised Agreement. Following the Soviet downing of the KAL plane on September 1, 1983, the United States canceled plans for those negotiations, thus allowing the Agreement to lapse.

DESCRIPTION OF ACTIVITIES

Civil Aviation

Activities included exchanges of information and delegations on air navigation research and development, i.e., air traffic control (ATC) and the microwave landing systems (MLS); general aviation production and use; airworthiness (certification of airplane designs); security; training and education; medical factors influencing crew performance; accident investigation procedures; and environmental factors. After several delegation exchanges in all areas, it was clear that that significant, long-range mutual benefits would be obtained through continuing bilateral discussions and tests in the design and development of the ATC and MLS systems.

Marine Transport

The program under this area included ice transiting; ocean commerce and cargo; ship equipment and crew training; and measurement of sea pressure on ship hulls. It was agreed that the ship hull measurement project would have to be postponed because reliable testing equipment would first need to be developed. Limited benefits to the United States in the ocean commerce and ship equipment areas were deemed acceptable as a trade-off for potential benefits from Soviet ice transiting technology. In early 1978, after a five-year period of minimal benefit, the U.S. side canceled all work in marine