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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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Introduction

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The Soviet bloc’s internal coherence was tested at the turn of the 1970s. Having barely managed to contain the repercussions of the Warsaw Pact invasion of Czechoslovakia in August 1968, the socialist countries were confronted with another issue that affected the central tenets of their ideology and system. All of them had experienced economic hardship and deteriorating growth rates during the past decade. The crucial question was: would they manage to find an internal development path to economic prosperity or would they have to open their system to the global economy – and bear the consequent pressures, rules, and competition that this decision entailed.

The clash of two coinciding but unrelated processes started to tear the socialist bloc apart. The first factor was the growing dependency on the Western markets since the beginning of the 1960s. The socialist countries had increasingly turned towards the West to acquire better quality products which they were unable to produce themselves, primarily due to problems inherent to their own economic system. Their need for technology and consumer goods from the West, and consequently the need to sell their produce on the EC market to receive currency to pay for those imports, worked towards creating dependencies. These became evident due to another process taking place at the time: the integration process of the European Community (EC).1 The socialist countries’ trade partners, the EC members, began to implement a Common Commercial Policy (CCP) as had been agreed upon when the organization was...

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