Grain Pain

THERE ARE HOPEFUL signs that the Reagan Administration is reassessing, at long last, its callous treatment of American allies.

In his September 6 address before the crowd at Harvard's 350th birthday celebration, Secretary of State George P. Shultz pointed out the evils of isolationism, warning of "thoughtless escapism, a retreat from responsibility, an attempt to evade the reality of our dependence on the world and the world's dependence on us."

It is unfortunate that the point was not raised earlier this summer, before the United States enraged its allies, particularly Australia, through a surprising wheat deal with the Soviets, in which billions of dollars worth of American grain were dumped on the Soviet market below cost.

Domestic pressures motivated the dumping. American farmers, already driven by federal farm subsidies to overproduce, were stricken in large areas with perfect weather for growing, thus suffering a record-breaking harvest. The subsequent abundance caused a slump in the already sliding commodities market.

Meanwhile, in the USSR there was no commodities market to slump, and a poor harvest meant that the Soviets were in need of grain.

TO THE AUSTRALIAN government the timing of the American decision could not have been worse. The Labor Party under Prime Minister Bob Hawke had already begun to suffer an alarming drop in popularity, most notably because of a crisis in foreign exchange. Emergency measures had to be enacted to shore up the plummetting Australian dollar. Treasurer Paul Keating voiced his fear that Australia was heading for "banana republic" status. And so, in light of looming economic disaster, the government introduced the so-called "horror budget" which called for massive federal cutbacks.

The Australians, then, were justifiably alarmed to learn that a major source of foreign exchange was about to be cut off by their largest, and allegedly best, ally. Hawke fumed on national TV and, meanwhile, dispatched an emergency delegation to Washington to talk some sense into the Reagan Administration.

But much to the Austrialian's dismay, their complaints were all but ignored. The delegation returned home empty-handed.

What doomed the mission from the start--and what the Australians find so hard to comprehend--is that the formulation of American policy virtually precludes input from overseas. American voters come first; allies place a very distant second.

SUCH A POLICY is not only arrogant, it is--as Shultz cautioned in his Harvard address--short sighted and ultimately destructive. When we ignored the pleas of our allies, the Australians, we not only endangered the prospects for open free trade but also tarnished our reputation as good neighbors.

The Australians do not owe us their loyalty, nor will they continue to extend their friendship if we continue to abuse it. If there is a strong link between our countries, it is more because of our hearts than because of our guns or money. And when we add insult to injury by ignoring the Australians' protests at the same time as we damage their economy, we needlessly imperil a valuable friendship.

It's time America woke up and smelled the coffee. Instead of making shady deals for short-term domestic gains, we must play straight on the world market. It's time we started dealing honestly with ourselves--and honestly with our friends.