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Socialist Countries Face the European Community

Soviet-Bloc Controversies over East-West Trade

Suvi Kansikas

In the early 1970s, the Council for Mutual Economic Assistance (CMEA) began to revise its trade policy towards the outside world. It needed to counter the European Community’s bid to implement its Common Commercial Policy and thereby change East-West trade practices. Foreign trade priorities became at once a crucial issue on the socialist countries’ political agenda. The key question was whether they would have to open their system to the global economy – and bear the consequent pressures and competition that this decision entailed. Based on newly declassified archival sources, this study shows how the East European states were able to lobby their positions towards the USSR within the CMEA. The pressure from its allies forced the Soviet leadership to accept the CMEA’s opening towards the EC.
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The CMEA hesitantly starts a rapprochement

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At the beginning of 1973, the CMEA members were faced with a serious challenge to economic relations with their trade partners in Western Europe. The EC began to implement its Common Commercial Policy, although in regard to the socialist countries, not in full scale. Starting on 1 January, EC member states were no longer allowed to negotiate bilaterally on trade agreements with CMEA members, since the EC Commission had been granted exclusive rights over the members’ trade relations. Based on the EC Council of Ministers decision in December 1969, existing trade agreements would only be in force until 1974.338

By 1973, the EC had been able to accomplish its first enlargement, when it was joined by three new member states: the United Kingdom, Denmark and Ireland.339 Most members of EFTA had concluded free trade agreements with the EC, making the European free trade area larger than ever. The Community was also more powerful than ever. In addition to the relative strength that the EC received – for instance, its population grew from 190 to 250 million inhabitants – the admission of new member states also caused direct economic strains for many of the socialist countries. The UK, a significant importer of CMEA agricultural products, was now also constrained by EC import quotas, whereas Denmark, a prior competitor to the EC dairy and meat market, had now become a recipient of customs union benefits. This had negative repercussions for countries such as Poland or Bulgaria that were dependent on...

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