A Delicate U.S. Mission

Commerce Secretary Malcolm Baldrige is to lead a delegation of some 60 government officials and private businessmen on a trade and investment mission to Algeria and Saudi Arabia from December 1-8.

The Commerce Department's announcement of this on September 20 was unusually low-key: a discreet mention in the department's magazine, Business America. Department staffers concede that putting the mission together has been an extremely delicate affair and that, although both the Algerians and Saudis want it to proceed as planned, everything could unravel as a consequence of the deterioration in U.S.-Arab political relations over the Lebanese crisis.

"So far all we've got are verbal invitations from both countries," one Commerce source told The Washington Report. "We haven't got anything in writing. The invitation could be withdrawn if things go wrong."

The purpose of the mission is to promote American goods and services in six business sectors: water resources, manpower development, building operations and maintenance, electronic communications equipment and services, agribusiness and avionics and ground-support equipment and services.

In addition to two dozen or so business people from those fields, the U.S. delegation will include top officials from the Export-Import Bank, the Overseas Private Investment Corporation as well as State, Agriculture and Treasury.

Saudi Arabia and Algeria already are major trading partners of the U.S.-Saudi Arabia, in fact, ranks with France as the U.S.'s seventh largest export market, and according to Commerce Department analysts, ranks among the top five countries in terms of market potential.

Algeria is a major oil and gas supplier to the U.S. and has become more attractive to American companies since the socialist government in Algiers liberalized commercial laws to allow export management companies to operate in the country.

U.S. exports to Algeria and Saudi Arabia grew by 27 percent and 32 percent respectively over 1980. The growth in exports to Saudi Arabia, which were worth $7.3 billion in 1981, has been accompanied by a sharp drop in U.S. oil imports from the kingdom, so that, for the first time since the early 1970s, the U.S. actually had a favorable trade balance with Saudi Arabia in the first half of this year—earning $4.4 billion on exports and spending $4.35 billion on imports. The Commerce Department says U.S. private investment in Saudi Arabia has grown from $200 million to more than $6 billion in the past two years.

Algeria has long been a difficult market for U.S. firms to penetrate because of its centrally planned economy and the almost total domination of the market by the French. The Algerians sent three purchasing missions to the U.S. recently and have expressed an interest in building stronger commercial ties with the United States, according to Joseph F. Dinnin, deputy assistant secretary of commerce for the Near East. He says Algeria should become a billion-dollar market for U.S. goods this year, up from sales of $717 million (against oil and gas imports worth $5 billion) in 1981.

President Carter's first commerce secretary, Juanita Kreps, led the only previous mission of this type to Saudi Arabia in January 1979 and a U.S. commerce secretary has never before visited Algeria. The Commerce Department is obviously trying to create the most favorable climate possible for the forthcoming Baldrige mission, but appears to want to do so without drawing too much attention to it. If the mission goes ahead as planned, it will offer a chance for U.S. officials and business leaders to determine at first hand, from two influential Arab countries, the seriousness of reported Arab warnings of trade and economic sanctions against the U.S. over the Lebanese crisis and U.S. support of Israel.