German Trade

Press, Volume XCIX, Issue 29398, 28 December 1960, Page 8

German Trade

The resumption of trade negotiations between Bonn and the East German Republic encourages hope that, for some time at least, Berlin will not be a cause of acute international crisis. The trade dispute originated because of East German restrictions on movements to, from, and within Berlin. Three months ago the Federal Republic notified the East Germans that the interzonal trade agreement would be renewed at the end of 1960 only if the travel restrictions were removed. For weeks the ultimatum seemed to have failed in its effect. The Communists did not lift the restrictions; rather, they tried to use the trade issue as a lever to compel Bonn to recognise the Pankow Government Access to East Berlin is still restricted; but a spokesman for the Federal Government said recently that the enforcement of restraints had been “ very “ liberal ”. Superficially Dr. Adenauer’s approval of renewed negotiations implies a tactical victory for the East Germans, not only against the Bonn Government but against West Germany’s allies, with whom the threatened rupture of trading relations had certainly been discussed. The recent softening of the Soviet attitude on Berlin could, however, justify Dr. Adenauer’s change of heart Because so much depends upon improving the political climate for next year’s talks on Berlin, the Chancellor can scarcely afford to be awkward about East German trade.

In the meantime the trade continues. Its value to the West Germans as a ,link with their outcast brethren transcends its economic importance. Nobody

can forecast precisely how serious a cessation of the trade would be. The West Germans’ economy is so buoyant that they would be little embarrassed; their exports to East Germany, valued at £B3 million annually, represent 2.5 per cent, of their total export trade. They could do without the goods—mainly sugar beet and brown coal—that East Germany supplies in return. The people of West Berlin would probably suffer no hardship through losing the benefit of East Germany’s coal, electricity, or meagre contribution to their larders. But because of the rigidity of State planning East Germany could ill afford to dispense with the steel products, chemicals, and technical equipment that flow from the West Eleven per cent, of East Germany’s trade is with the Federal Republic. Russian assistance might ultimately offset East German losses resulting from a Western trade embargo; but temporarily, at least, the West Germans could exert unwelcome pressure upon unco - operative neighbours. Whether this brief tactical gain would be worth while in the longer view of diplomacy was questioned by “The Times” in October, when the Federal Government announced its trade reprisals against Pankow. The “Daily Telegraph” commented on November 29 that an “ explosive situation ” could be produced if the Federal Government stood firm upon its own terms, insisting on formal withdrawal of the Communist travel restrictions. Dr. Adenauer has apparently concluded that discretion is the better part, and that, at least in Berlin affairs, politics are best kept out of trade. The holiday season will now probably pass without the threatened Berlin explosion.