MOSCOW — President Bush sought to give a political boost to Mikhail S. Gorbachev's beleaguered program of economic reform Tuesday by announcing that he will move to grant the Soviet Union its long-sought "most-favored-nation" trading status.
Winning so-called MFN status, which must be approved by Congress, is seen as a major element in normalizing political and economic relations between the two countries. It would drastically cut tariffs on Soviet exports to the United States--now subject to the highest tariff barriers in U.S. history.
Bush's decision to seek most-favored status for Moscow is also a symbolic step toward integrating the Soviet Union into the global trading system after more than 50 years of Communist isolation.
"The Soviet Union should become a full participant in the global economy, and the United States will support you in that effort," Bush told Gorbachev.
During a busy day of meetings and public appearances capped by a state dinner set amid the resplendent religious murals and frescoes of the 500-year-old Hall of Facets in the Kremlin, Bush heaped praise on Gorbachev for his courage in transforming the Soviet Union, but he also bluntly lectured the Soviet leader on the need to do still more.
And he spent nearly an hour in one-on-one discussions with Boris N. Yeltsin, president of the Russian Federation and Gorbachev's chief rival for power.
As a result, while Bush has repeatedly declared that he does not want to become involved in the internal politics of the Soviet Union, that is exactly where he landed Tuesday.
Yeltsin gave the political equivalent of a stiff-arm to Gorbachev by spurning an invitation to attend a luncheon meeting with Bush and the Soviet president, explaining acidly that he did not "fit into a voiceless mass audience."
In a television interview following his meeting with Bush, Yeltsin also pointedly declared that he and Bush are united in strongly supporting independence for the breakaway Baltic republics, Estonia, Latvia and Lithuania--a position Gorbachev opposes, he noted.
Nor did Bush himself shrink from the issue of the Baltics, which were annexed by dictator Josef V. Stalin at the outset of World War II. Bush commented on the subject repeatedly. The newly elected leaders of the Baltic republics, he said, are asking Soviet leaders "to repudiate one of the darkest legacies of the Stalin era."
"Surely, men and women of reason and goodwill can find a way to extend freedom to the Baltic peoples," the President said.
Bush, in a speech on the opening day of his two-day summit meeting with Gorbachev, declared that the process of normalizing economic relations between the two countries is "now nearly complete" and said he will submit the trade agreement to Congress when he returns to Washington.
Speaking at the Moscow State Institute for International Relations, Bush said the "key impediment" to approval and increased trade was removed on May 20 when the Supreme Soviet lifted restrictions on emigration. "The new Soviet emigration law stands as a major step forward--a victory for all who value human rights," he said.
Bush will send the most-favored-nation approval to Congress as part of a broader U.S.-Soviet trade agreement. It will be considered under recently passed "fast-track" rules, which require Congress to act within 90 days to vote the proposal up or down without amendments.
Tariffs on Soviet exports to the United States would be reduced from an average of 34% to the same 6.7% tariff rate applied to most U.S. trading partners.
Soviet exports to the United States are relatively small, and the immediate economic impact of lower tariffs is not likely to be significant, but it could become important in the longer term if the Soviet economy gathers strength.
The broader U.S.-Soviet trade agreement provides improved market access for both countries and prohibits the adoption of standards that are discriminatory or designed to protect domestic production. Administration officials said it also will facilitate the operation of U.S. firms in the Soviet Union by establishing an expedited accreditation procedure for commercial representations, allowing these offices to hire local and third-country employees directly on mutually agreed terms.
The United States and the Soviet Union have been negotiating most-favored-nation status since 1989 and finally agreed to the text of a trade agreement on June 1, 1990, during the Bush-Gorbachev summit meeting in Washington. But final approval ran into various snags, including the Soviet restrictions on free emigration.
The President also announced Tuesday that he will propose legislation to remove restrictions on Soviet eligibility for U.S. government credit and credit guarantee programs in support of American exports.
