Abstract
This paper deals with the transformation of East-West commercial relations since the political changes and economic reforms in Eastern Europe and the former Soviet Union began. The former network of trade relationships represented an accommodation between two fundamentally different economic systems, market economies on the one hand and centrally planned economies (CPEs) on the other. Given the political cleavage between East and West, their trade also took on a strategic dimension reflected, above all, in export controls on goods with military applications. Overall, East-West economic relations were fraught with discriminatory practices.
United Nations Economic Commission for Europe, Geneva. The opinions contained here are the author’s and do not necessarily reflect those of the United Nations. He would like to thank Mr. P. Rayment for his comments and Mr. C. Majernik for his research assistance.
The material presented here draws in part upon section 4.2 of the UN/ECE, Economic Bulletin for Europe, vol. 45, 1993. This source should be consulted for details and additional references.
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Footnotes
For more detail on the relations between East European countries and the GATT, see Lindén, Ake (1989), in East-West Economic Relations in the 1990s, G. Bertsch and C. T. Saunders (eds.), Macmillan (vol. 11 in the present WIIW series).
A summary of unilateral trade policy measures and economic agreements between the Western market and the transition economies and the dates of their entry into force are given in UN/ECE (1993), Economic Survey of Europe in 1992–1993, New York, table 4.2.1, pp. 254–255.
In view of the civil war in Yugoslavia, the EC Council of Ministers decided in November 1991 to denounce the application of the agreement. In the following December it made available equivalent trade preferences to these four successor republics. EC Commission (1993), Overview, EC-East Europe, Brussels, 29 January.
The timetables for the reduction of tariffs and dismantling of quotas contained in the agreements with the former Czechoslovakia, Hungary and Poland can be found in UN/ECE (1992), Economic Survey of Europe in 1991–1992, New York, pp. 187–188.
GATT (1993), Focus, no. 99, May/June. The original waiver from GATT rules, for a period of two years, was sought by the EC at the end of 1990.
GATT (1990), Circular, L/6730.
In 1990 the combined export shares of the “sensitive products” (textiles and clothing, iron and steel, and agricultural products) ranged from 32 percent for the former Czech and Slovak Federal Republic to 41 per cent for Hungary. The shares are even higher if certain bulk chemicals are included. In all three countries. sensitive goods accounted for around 40 per cent of the incremental value of the growth in their total exports to the West from 1988 to 1990. See UN/ECE (1992), Economic Survey of Europe in 1991–1992, New York. pp. 78–81.
European Council of Copenhagen, 21–22 June 1993, Agence Europe, Documents no. 1844/45, 24 June 1993.
The impact of the liberalisation of Western markets vis-à-vis Eastern products is discussed in more detail in UN/ECE (1993), Economic Bulletin for Europe, vol. 45, New York and Geneva, pp. 112–114.
On the efforts of Western protectionist lobbies, see Hindley, B. (1993), “Helping transition through trade? EC and US policy toward exports from Eastern and central Europe”, EBRD Working Paper, no. 4, March, p. 3.
For example, see Sir Leon Brittan, Financial Times, 20 March 1993.
See, for example, Ostry, Sylvia (1993), “The threat of managed trade to transforming economies”, EBRD Working Paper, no. 3, March.
See sedion 4.2, UN/ECE(1993), Economic Bulletin for Europe, vol. 45, New York and Geneva.
It may be doubted, however, whether the application of contingency protection in some of the Western countries can explain the cessation or decline in the exports of several, but not all, East European economies in 1993. See UN/ECE (1993), Economic Bulletin for Europe, vol. 45, p. 114.
See Hindley (1993), op. cit.
In a number of respects the draft agreements on the new codes go beyond, but in other respeds fall short of, a special regime advocated for the Eastern countries during the transition period. Elements of this proposal include the adoption of selective safeguard measures in place of anti-dumping and countervailing actions; an international (GATT) review of any request for relief from imports; limitations on the magnitude and duration of any corrective action; and a mechanism for reviewing the economic impact of such restrictions on the country’s transformation process. See Ostry (1993), Ope cit., pp. 21–22.
A partial inventory of these measures was presented in UN/ECE (1993), Economic Bulletin for Europe, vol. 45, pp. 111–112. It may be noted that under the EC and EFTA FTA agreements, Eastern partners benefit from a slower reduction of trade restrictions on their industrial imports than do their Western partners (i.e. the asymmetrical reduction provision).
There are groundsfor believing that in certain casesthe reforms resulted in excessively open systems which prematurely exposed domestic industries to foreign competition. While liberal trade regimes have undoubtedly conferred certain benefits on the transition economies, the costs have included precipitate losses in production. The impact was exacerbated by the pronounced shift in consumer preferences toward Western goods early in the transition. Although Eastern consumers have partially reverted to domestic goods,local industry is likely to have been weakened. See UN/ECE (1992), Economic Bulletin for Europe, vol, 44, United Nations, New York, p. 75.
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© 1995 Wiener Institut für Internationale Wirtschaftsvergleiche (WIIW) (The Vienna Institute for Comparative Economic Studies)
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Smolik, J.E. (1995). The Transformation of East-West Trade Relations. In: Saunders, C.T. (eds) Eastern Europe in Crisis and the Way Out. European Economic Interaction and Integration. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-13642-1_10
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