New Trends of Soviet Trade in Central Europe

Otago Daily Times, Issue 26963, 24 December 1948, Page 7

New Trends of Soviet Trade in Central Europe

NZPA Special Correspondent Rec. 9 p.m- LONDON, Dec. 23. The real nature of what the Soviet wants in Europe is suggested by the trade agreements recently signed between Russia and other European countries, says The Times in a leading article. Taking as the most striking examples the treaties with Poland and Czechoslovakia, The Times comments that they are for a number of years, they provide for the export of Russian capital goods to Central Europe, and diversions of considerable quantities of Russian raw materials in exchange for Central European manufactures. They carry with them extensive credits which are sometimes in gold. The' Times continues: The Soviet Union, in other words, has greatly enlarged its area of planned trading, and in doing so has acquired large new resources for the production of consumer goods of which the Russians stand greatly in need. The explanation of this apparent change of attitude towards foreign trade is not hard to discern. Countries which are now ' being brought into the Soviet area of planned trade are countries with Communist regimes already brought within the Soviet sphere of politics and strategy. The extension of planned trading may perhaps be interpreted in part as an attempt to provide Russia with a substitute for the Marshall Plan in Central Europe, but it is more likely that these new trends in commercial policy are simply a consequence of Communist domination in countries outside the Soviet Union. It would be wrong to assume that the benefits will go all the one way, or that practical advantages may not accrue to smaller countries as well as to the Soviet Union. The Russians are sending large quantities of raw material to the factories of Bohemia and Moravia, of Budapest and Warsaw and elsewhere, and are taking payment for these in manufactured goods. The new agreement with Czechoslovakia provides that only part of the finished textiles manufactured from Russian cotton need be exported to Russia, the rest—together with an unknown sum in gold and foreign exchange—remaining for exchanges with other countries which have to be paid for in hard cash. Even more important, the Russians have agreed to sell capital equipment to Poland and Czechoslovakia—both of whom lost much by being prevented from accepting Marshall Plan aid—during the coming period of intensive industrialisation. In the Balkans and Eastern Europe, the Russians are helping to create employment in industry. This, as the Communists no doubt calculate, can do much to raise the general standard of living, and to that extent, prestige and popularity of the Soviet Union and of Communist leadership. The Kremlin, says The Times, evidently considers the industrialisation of Central Europe to be possible and worthy of support in the near future. The Russians have no excess of capita] equipment over and above what they need for their own industrialisation, and their readiness to divert valuable resources to Central Europe may well suggest a new sense of confidence in Moscow.