Harmonizing EEC–CMEA Relations: Never the Twain Shall Meet?

Robert M. Cutler

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Harmonizing EEC–CMEA Relations: Never the Twain Shall Meet?

Robert M. Cutler

Recent developments have taken the question of relations between the European Economic Community (EEC) and the Council of Mutual Economic Assistance (CMEA) off the diplomatic back burner. Some reasons for current CMEA interest in the question are economic: most CMEA countries continue to have difficulties with their hard currency debt, and it may appear that formal interbloc relations can help to open the EEC up to Eastern imports, increasing the CMEA countries’ hard currency earnings. Also, the volume of trade between the two blocs has been increasing since 1980, and some in the East may think that this makes the absence of formal EEC–CMEA relations illogical. Yet some in the West suggest that because present arrangements seem to be working satisfactorily, formal interbloc links would have little practical value. Clearly there are also political motives: it is only under Gorbachev that these new moves have occurred. The purpose here is to analyze recent developments in order to gain a perspective on the costs and benefits to both the EEC and the CMEA of formal organizational relations. To this end, some recent historical background is necessary.

1. The 1970s

During the 1960s, the EEC and CMEA both focused more on their respective integration processes than on relations with each other. Yet in the course of this decade, policy makers on economic affairs in the CMEA countries realized that the technological modernization of their own countries would require Western imports and credits. Certain East European countries (Hungary and Czechoslovakia most notably, but others as well) reached out for improved economic relations with the West, and their push in this direction gave the USSR—which was much less dependent on foreign trade—reason to worry about how such an attraction to the West might undermine East bloc cohesion.

In the late 1960s, international flows such as trade, communications, and tourism increased markedly between the two halves of Europe. By the end of the decade it was clear that capitalist economic and commercial organizations were willing, on a broad scale, to take into account the idiosyncrasies of socialist state planning. As the East

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European economies adapted to West European organizations and procedures, diverse changes were introduced into the national economic, administrative, and planning systems of the East European states. This heterogeneity made coordination of national economic plans among CMEA members increasingly difficult. The Soviet invasion of Czechoslovakia in 1968 reinforced not only the bloc’s political but also its economic cohesion.[1]

In the years immediately following the invasion, initiatives for integration within the framework of the CMEA increased markedly. By 1971, this reintegration found expression in CMEA’s adoption of its Complex Program of Socialist Economic Integration. This document was intended to serve as a set of guidelines for the development of intra-East bloc economic integration, with a time horizon of about two decades. Although some economic coordination was accomplished, it was hardly of the degree envisioned in the Complex Program itself. The Complex Program seems to have been part of an overall political and economic program, encompassing both foreign and domestic policy, through which Brezhnev consolidated his political primacy. East European countries participated in accelerating integration while being allowed to open up somewhat to the West. Greater integration of the CMEA into the world economy contributed to intensifying intrabloc cooperation: the CMEA’s newly established International Bank for Economic Cooperation provided access to international credit markets for financing imports of Western technology, while its International Investment Bank promoted intrabloc joint ventures.[2]

1.1. Changing Soviet Views in the Early 1970s

In the early 1970s, at a time when there were renewed feelers by both sides for greater interbloc economic cooperation, Soviet perspectives on world politics—and on “international imperialism” in particular—underwent an important shift. As early as the 1969 World Communist Conference in Moscow, Soviet thinking about West European domestic politics was changing in favor of a renovated “united front” policy – under the slogan of the “democratic alternative”—that advocated joint political and social action by communists with other left-wing forces. This approach was confirmed and elaborated at an April 1973 conference in Moscow organized by Yuri Krasin, pro-rector of the Central Committee’s Academy of Social Sciences, and held at the Academy, which has played a significant role in managing relations with foreign communists. According to this viewpoint, the expansion of the EEC would help to realize the “democratic alternative” by mobilizing the working classes and intermediate social strata of the EEC member- states. It therefore followed that the pursuit of the “democratic alternative”

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should apply not just to the various national parliaments in Western Europe but to the European Parliament as well.[3]

In fact, there were and are four facets to the Soviet analysis of West European integration: economic, political, military, and financial-monetary. The last of these, which is the most often overlooked, is in fact what dominated Soviet attention to West European integration in the early 1970s. This attention was focused in the context of the realization that the United States was, at least economically, no longer the systemic hegemon of international imperialism but rather one of three centers, the other two being the EEC and Japan. Soviet scholars introduced a distinction between economic microintegration (e.g., transnational cooperation among enterprises) and economic macrointegration (viz., intergovernmental cooperation on economic policy). This led them to accept what we may call political macrointegration in Western Europe, i.e., intergovernmental cooperation in political affairs. This they interpreted to be the result of attempts to resolve the “contradictions” of economic macrointegration and microintegration. Curiously, the Soviets seemed not to consider military-industrial microintegration in Western Europe a part of West European economic integration in general. They were more worried about military macrointegration and consequently paid more attention to such formations as the West European Union, the Eurogroup, and the European Planning Group.[4]

What resulted was a cognitive separation of the military, political, and economic aspects of West European integration. The Soviets acknowledged the possibility of political integration in Western Europe without being forced to conclude that military integration would follow. This attitude was in clear contrast to the “bad old days” when the EEC was considered the European pillar of NATO and when any move toward even political integration was seen as an American-inspired attempt to institutionalize the division of Europe by building up this pillar. There was a Hobson’s choice here, of course, for it was not clear whether the Soviet Union would prefer—if it had to choose—a Western Europe with an independent military force or a Western Europe supporting the United States in NATO.

This change in Soviet thinking toward Western Europe, under way since the mid- to late 1960s, was catalyzed in May 1971, when the Federal Republic of Germany floated the Deutschmark on international currency markets. Then in June, a summit meeting between the French President Pompidou and the British Prime Minister Heath cleared away the political obstacles to eventual British entry into the EEC. The issue of currency-financial integration in Western Europe attracted even more attention in both East and West when, in August 1971, President Nixon unilaterally removed the dollar from the gold standard

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and imposed a ten percent surcharge on all import duties. To the Soviets, this move—following upon the deterioration of the fixed exchange rates established at Bretton Woods – seemed to force the West European powers to recognize their common cause against the “dollar zone” in international commerce, compelling them, in their defense against the American currency, to enter into a “joint float,” the first step on the road to a European Monetary System (EMS).

The quick succession of these events led the Soviets to take a very close look at integration moves in Western Europe. In mid-1971, Andrei Anikin, one of the most creative members of the Institute for World Economy and International Relations (IMEMO) in Moscow, wrote in Kommunist: “The transition from an agreed-upon tariff policy to the tasks of deepening economic unification makes the currency problem especially urgent for the ‘Common Market.’”[5] In Soviet analyses, the question as to whether the EEC was indeed a political reality came to be argued in terms of whether the nascent EMS had any chance of succeeding. The success of the EMS would clearly be an instance of political macrointegration, since it would require intergovernmental cooperation over not just an economic issue but a fundamentally political one as well. The EMS question, in turn, came to be argued in terms of the question as to whether gold had been “demonetized,” i.e., whether gold would remain a standard for comparing the prices of national currencies. That was why Nixon’s move to take the dollar off the gold standard was so striking to the Soviets.

Debates among specialists took place in the Soviet international affairs community, embracing not just IMEMO and the Academy of Sciences’ family of research institutes but also the various research institutes attached to Soviet government ministries concerned with national and international finance.[6] These debates were extremely pointed and argumentative; at times they reached the level of polemic, with specialists attacking one another by name (which is not extraordinary in domestic policy debates but almost never occurs in debate over international policy) and accusing each other in print of being nothing less than un-Marxist. The eventual result was confirmation of the view that Western Europe was emerging as an independent entity from under American tutelage.[7] In January 1972, a conference of the International Working Group on Capitalist Integration was held at IMEMO, and some of the conference’s results were published authoritatively in Pravda .[8] Other ideas that had circulated at the conference were published in Pravda over the signature of Georgii Ratiani, a former diplomat who had become a researcher at the Institute of World History and leading international affairs journalist in Moscow.[9]

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All this set the stage for Brezhnev’s remark in May 1972, during a speech to the Trade Unions Congress, that:

The Soviet Union by no means ignores the existing situation in Western Europe, including the existence of an economic grouping of capitalist countries such as the “Common Market.” We are carefully observing the activity of the “Common Market” and its evolution. Our relations with the participants of this grouping will, needless to say, depend on the extent to which they recognize the interests of the member- states of the Council of Mutual Economic Assistance.[10]

A similar statement by Brezhnev on December 21 of the same year was circulated in Helsinki by the Soviet delegation to the Conference on Security and Cooperation in Europe (CSCE). This statement was probably motivated by a desire, inter alia, to falsify the assertions by certain Western politicians and opinion leaders that the Helsinki talks were designed to fragment Western Europe and/or to pry the Federal Republic of Germany away from the rest of the European Community. In addition, the Soviets were most likely aware of the deadline set by the Treaty of Rome’s deadline—January 1, 1973—before which the Community’s members would have to decide whether to transfer to the executive organs of the European Communities (E.C.) the authority to make a common foreign trade policy. In the absence of a definite decision to that effect, the authority to make foreign trade policy would remain with the individual member-states. The Soviets, recognizing the approach of this deadline and thinking that they would otherwise face more problems in promoting exports to the EEC, may have felt an additional motivation for direct dealings with the EEC.[11]

1.2. Subsequent Developments in the 1970s

In 1973, the chairman of the CMEA Executive Committee visited Copenhagen while “on vacation” and met with the Danish prime minister, who at the time happened also to be serving as president of the E.C. Council of Ministers. This was a curious move, because the CMEA chairman should rightly have gone to Brussels if he had wished to explore contacts with the EEC. Little came of this hesitating initiative, however, possibly because the Soviets came to realize that the EEC’s introduction of a common tariff policy would have little effect on Soviet foreign trade.

By the mid-1970s, Soviet actions with respect to the EEC had clearly lost any independent initiative and became principally reactive. CMEA integration provided a certain scope for an interbloc approach to handling trade issues, but to move from a network of bilateral trade links to one regulated by the integration organizations themselves would have implied (1) that the CMEA member-countries’ foreign trade was susceptible to supervision by the organization as a whole and (2) that the EEC would recognize the CMEA as an equal. The EEC desired neither of these prospects and the smaller CMEA countries, not wishing their national trade to be regulated by their integration organization, tacitly supported the EEC’s proposition that the CMEA executive organs had no juridical authority to sign such an agreement. Official CMEA policy was that bilateral agreements between the EEC and individual CMEA members should not be signed, but international economic developments during the 1970s—especially hard currency requirements resulting

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from the oil shocks—forced the smaller CMEA members to seek and sign such agreements. Because the USSR could not keep the other CMEA members in line, its policy was constantly on the defensive.

The EEC and CMEA actually exchanged drafts of an interbloc agreement in 1976.[12] However, negotiations were complicated by the question of Soviet and East European access to fishing grounds within the 200- mile maritime economic zone claimed by the EEC. The Soviets, on the verge of being locked out of the Community’s waters in early 1977, ceased attempts to deal exclusively through the E.C. Council of Ministers and sought to come to terms directly with the E.C. Commission. In Brussels, the Soviet fisheries minister sidestepped questions from the Western press as to whether this meant the USSR now recognized the E.C. Commission. The answer soon came as Soviet ships moved out of the Community’s waters, effectively blocking de facto recognition. Following this, ships of the EEC countries left Soviet waters, and Brussels gave the Soviet fisheries minister a cold reception. By the middle of 1977, the fisheries issue was a political stand-off. This notwithstanding, general discussions between the EEC and the CMEA continued through 1978, and by 1979 they had actually arrived at a common text for a formal agreement, with the exception of a few political issues that required resolution at the highest levels. Before those matters could be resolved, however, the Soviets marched into Afghanistan and EEC–CMEA contacts, like many East–West contacts in general, fell apart.

To summarize, on the West European side, three parallel phenomena were increasingly manifest during the 1970s: (1) the development of European Political Cooperation (EPC); (2) the development of CSCE, which had a strong component relating to the expansion of international trade; and (3) the E.C. Commission’s assumption of responsibility for foreign trade policy.[13] Moreover, the origin and development of these three phenomena were largely autonomous of any American coaxing. Indeed, in the early 1970s, U.S. and Japanese competition motivated the EEC member-states to harmonize their trade policies with one another. During this period, EEC protectionism directed against Eastern Europe declined, but it grew stronger again during and after the 1975 recession. Because the CSCE involved trade and security, the Commission had also developed concerns with economic aspects of security issues; as the decade progressed, it indeed became more and more involved in the EPC process. (Today the E.C. Commission acts as a member-state within EPC.)

The Soviet position during the 1970s, that there should be an overarching framework regulating relations between the two organizations, was undermined both by the East Europeans and by events. Today there are all manner of EEC agreements with CMEA member-countries over such individual issues as agriculture and steel. Moreover, the very extension of bilateral economic cooperation between the two blocs over the course of the 1970s—e.g., Franco- Polish economic relations, Bulgaro-German economic relations, etc.—has created a self-sustaining structure of cooperation that does not depend on formal coordination between the two integration organizations. Indeed, it seems now that such formal coordination would be as likely to restrict as to promote

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further economic cooperation. As for the USSR, it no longer has a policy concerning the matter: having sought unsuccessfully to construct a policy without giving in on principles, the Soviet Union’s moves over the last ten years have become essentially reactive and directed toward damage limitation.

2. EEC–CMEA Relations Today

The invasion of Afghanistan ruptured a dialogue between the two organizations that was ongoing, albeit in fits and starts, throughout most of the 1970s; however, by March 1981 the Vice- President of the E.C. Commission with responsibility for external affairs had written to express a willingness to restart such talks. Not until the CMEA summit in Moscow in June 1984 did the CMEA respond with a statement that improved relations were desirable, and a formal reply was not made until June 1985, when, in Brussels, the Polish ambassador to Belgium delivered to EEC Commission President Jacques Delors an invitation to visit CMEA headquarters in Moscow. Later that month, the West European foreign ministers decided to explore cautiously whether talks could be reinitiated without jeopardizing established relations between the EEC and individual CMEA members. Therefore, in July 1985, the EEC sent a request to the CMEA for more details.

The CMEA answered in September with a letter offering vague promises that the Community’s bilateral relations with the East European countries would not be endangered by the establishment of interbloc relations. The EEC wanted more specific assurances, however, and on January 31, 1986, while offering the CMEA a positive response, it also sent letters to the smaller East European members of CMEA, inviting their opinions on the establishment of diplomatic relations between the two organizations.[14] Three types of factors—legal, economic, and political—obstruct the road to an EEC–CMEA accord. After examining them, it will be possible to enumerate the potential outcomes of current contacts and to assess their respective likelihoods.

2.1. Legal Factors

The EEC and the CMEA are not equivalent organizations. Differences in their juridical personalities under international law, and particularly in the competences of the executive organs under their respective charters, account in no little part for the failure in the early 1970s to establish relations between the organizations. These differences are clear from, for example, their treatments of the Generalized System of Preferences (GSP) adopted by the United Nations Conference on Trade and Development (UNCTAD). On the West European side, it was the EEC itself that revised its tariff schedule under GSP, in order to promote imports from the less developed countries; but on the East European side, it was the member-states of the CMEA and not the CMEA itself that revised the tariff schedules. To take another example, at the UNCTAD negotiations on the Common Fund for commodities, the Soviets strongly resisted the idea that the EEC should be able to become a member of the Common Fund just like any state could: this would have entailed legitimizing a certain “juridical personality” of the EEC under international law. In the

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end, the EEC was allowed to contribute capital to the Common Fund but not to vote in decisions that it may take.

The CMEA, by contrast, enjoys none of these competences. Indeed, the authority of the CMEA Executive Committee is not regularized and is revocable without notice by its member-states. The Soviet delegate to the Sixth Committee of the U.N. General Assembly has even suggested that any international organization should be able to invoke its internal statutes in order to decline to fulfill the commitments of any treaty or other agreement that it might sign.[15] Yet if the CMEA Executive Committee has authority to act on behalf of the member- states only when the latter give it specific permission to do so in the individual instance, then it is legitimate to wonder against whom a complaint could be made in the case of nonfulfillment by CMEA.

In light of international law, the CMEA appears to seek to benefit from all the rights of being an international organization (and an actor in the international community) without being obligated to fulfill any of the concomitant duties—since the authority of the CMEA’s executive organs is conditional upon the will of the member-states, and these may at any moment not only reappropriate that authority but also subsequently decline to execute the CMEA’s obligations as nonbinding on themselves as states. In terms of the research functions of the CMEA, of its coordination of national economic activities, and of its membership, the CMEA is indeed much more like the OECD than like the EEC.[16]

Until very recently, Soviet specialists on international law have ignored the accumulated case law of the EEC, which is nevertheless very important for how the EEC deals with the rest of the world. The most recent Soviet legal literature, however, recognizes the EEC’s distinct juridical personality; and it is certainly no longer true—as had been suggested by a Special Rapporteur (who was Soviet) to the International Law Commission—that the EEC is a unique intergovernmental organization, not “international” but “supranational” and therefore having neither substantive standing under customary law nor normative standing under the law of treaties. [17] The Gulf Cooperation Council (GCC) is largely modelled after the EEC and, indeed, entertains relations with it.[18] The Soviets have accommodated the GCC and have even encouraged both North and South Yemen to draw closer to it. Perhaps it is these developments that have led the Soviets to drop their objections against the EEC under international law.

2.2. Economic Factors

Because different CMEA countries have different trade patterns, the impact of any EEC–CMEA arrangement would vary with the country concerned. CMEA countries that export raw materials generally have no problems with the EEC, because these materials are simply either traded or not traded. Other CMEA members mainly export industrial manufactured goods, such as industrial consumer goods, processed food, or

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machinery and equipment; still others—Hungary, for example—are both industrial and agricultural exporters.[19]

It is typically countries in the latter two categories that feel their exports would be enhanced by a lowering of tariff barriers (e.g., shoes from Hungary or textiles from Romania). Representatives of these countries, which feel injured by protectionist measures in agriculture as well as by industrial tariffs, maintain that in their view a general agreement with the EEC is desirable, and that the two organizations should recognize each other as a precondition to increasing the possibilities for actual cooperation. However, such countries frequently have bilateral arrangements already with Western Europe that include developed marketing networks. Although West Germany is inclined to view favorably the prospect of formal interbloc ties, there is stiff resistance to this both among the national governments of other EEC member-states and among the Eurocrats in Brussels.

Furthermore, trade with the CMEA is much more important to the EEC for its political and strategic aspects than for its economic aspects; whereas the CMEA countries see such trade as economically important not so much in quantitative terms—since most of their trade is with members of their own bloc—but rather in qualitative terms, since it could be an important source of advanced technological inputs. Because of this contrast in the position and interests of the members of the two blocs, the CMEA’s desire for greater EEC openness—its insistence on ending import quotas and so forth—is not accompanied by any willingness to offer similar concessions. Indeed, it cannot be accompanied by any such concessions, because this would promote the abolition of state- trading monopolies in the East, thereby opening a wedge for the disestablishment of statist economic planning.

2.3. Political Factors

Some in Western Europe hesitate to encourage any kind of contact with the CMEA, because they fear that any agreement might somehow enable the Soviets to supervise, control, or otherwise place limits upon the foreign trade activity and sovereignty of the smaller East European countries. This fear was voiced in the early 1970s and is still echoed today; however, it seems unfounded, for under current CMEA procedures it is hard to see how it might come to pass in practice. In talks within the CMEA, instructions given to national delegations are very flexible except where national interests are at stake, and there they are rigid. As early as 1962, for example, Romania was able to prevent adoption of Khrushchev’s plan for CMEA-wide “superministries” that would have limited the members’ autonomy. It follows that so long as the principle of unanimity continues to hold sway in CMEA councils, a real basis will be hard to find for fear that Soviet economic influence may limit the sovereignty of the East European countries. It is questionable, therefore, that any agreement between the CMEA and the EEC could enable such limitation.

Political problems do remain, however, which arise from those considerations of international law that were mentioned earlier. For the West Europeans, one of the questions concerns with whom they would sign an agreement. The CMEA Executive Committee does not have regularized statutory powers to sign such agreements. (The question of assigning responsibility on the CMEA side is therefore an open and nontrivial question.) Nevertheless, the CMEA

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member-states have been able to sign such agreements on several occasions in the past by empowering the organization’s Executive Committee in each particular case to do so on their behalf. For example, Soviet scholars often cite the agreement on economic cooperation signed by the CMEA’s Executive Committee with Finland in 1973;[20] similar agreements have also been signed with Mexico, Iraq, and Yugoslavia. But none of these is more than a framework agreement: the signatories commit themselves only to seek to attempt to fulfill certain goals for the extension of trade and commercial contacts. Such an agreement, therefore, embodies only general terms, the fulfillment of which depends upon subsequent specific negotiations. It is little more than a multilateral device for coordinating the bilateral long-term agreements that the CMEA member-states individually sign with third countries.

In the abstract, such an agreement with the EEC could promote the autonomous bilateral ties of the East European countries. However, the USSR has historically been the motive force behind the Eastern bloc’s initiatives for this type of agreement. To the degree that that remains the case, such an agreement could serve to increase the coordination of national economic planning among some, if not all, CMEA members. The autonomous development of existing bilateral economic ties between East and West European states, on the other hand, could encourage an economic integration process in Eastern Europe that would exclude overt coordination with the USSR.

3. EEC–CMEA Relations in the Future

It is possible to distinguish four potential outcomes of the two organizations’ ongoing contacts. These are: (1) an umbrella framework agreement, (2) establishment of a joint statistical office, (3) an agreement in principle, and (4) absence of any agreement.

3.1. An Umbrella Framework Agreement

Let us suppose that some interorganizational agreement establishes an institutional framework along the lines of the Franco-Soviet model, in which a multiplicity of councils and committees seeks to regulate and facilitate commercial contacts between the parties. If the CMEA were to seek some such joint council with the EEC, then some in Western Europe might fear that this would create a basis for the Eastern bloc’s interference in the affairs of EEC members. But it is at least as likely that this would also permit the West European countries to “interfere” in the affairs of CMEA members. Indeed, this is precisely what happened through the follow-up conferences instituted by the CSCE Final Document. Although the Soviets thought they could use the document—as well as the process of its formulation—in order to divide Western Europe from the United States (and the West European states from one another), Basket Three has given the Western countries entrée under international law to concern themselves with human rights in the USSR. Moreover, the Helsinki Accords gave rise to a wave of dissent in the CMEA countries in the late 1970s that was wholly unanticipated in both East and West. From this experience it would seem unlikely that Western Europe should have much to fear from an EEC–CMEA joint commission.

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3.2. Establishment of a Joint Statistical Office

After the failure in the early 1970s to establish strong, institutionalized formal relations, some rather more modest proposals were put forward, including one to establish a central statistical office—to gather and exchange economic data—which might also facilitate trade contacts. Although this is a much more practical approach, the Geneva-based U.N. Economic Commission for Europe already fulfills precisely this function, and it is doubtful that duplicating that effort would promote further cooperation.

3.3. An Agreement in Principle

The possibility also exists for an agreement in principle. Such an agreement would be entirely symbolic, yet even this possibility encounters obstacles: the CMEA still does not like the EEC’s supranational status, and the EEC rightly hesitates to bequeath to CMEA the appearance of equality. An agreement in principle fits rather well into recent Soviet preferences for European security. Even more than in the early 1970s, Soviet moves today seem motivated less by the desire to establish practical and effective relations than by the desire to create a political atmosphere. The whole of Soviet policy in Europe in the 1970s—at CSCE, MBFR, and SALT—suggests this pattern of motives.[21]

3.4. Absence of Any Agreement

There is always the possibility that the status quo will be maintained and that no agreement will be struck between the EEC and CMEA. It is unlikely that the absence of an agreement will make much difference. Without an agreement, relations will continue to develop along present lines, with the EEC seeking piecemeal to aid the East European countries to increase their autonomy in trade matters through accords on limited issues. Interstate commercial contacts (Franco-Polish, Bulgaro- German, etc.) will be no more restricted by the absence of an agreement than they are now, and their recent development has been prodigious.

4. Conclusion

Underlying the issue of EEC–CMEA relations is the question of competing political visions of Europe. Despite calls for all-European economic cooperation, the Soviets give no evidence of regarding an interbloc economic agreement as the means for creating a united Europe “from the Atlantic to the Urals.” An interbloc economic agreement would, in fact, only reinforce the East- West division of Europe, confirming the boundaries of the two blocs by regulating the EEC’s autonomous penetration of the CMEA countries. Yet for the European Communities, the ultimate vision of Europe remains one of a genuinely transcontinental entity, organic and whole. There is a clear parallel between the EEC’s approach to relations with the European Free Trade Association (EFTA) and its approach to the CMEA. EFTA’s members ended up signing individual free trade agreements with the Community, which refused steadfastly to sanction any formal agreement with EFTA as an

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organization. This experience seems almost a conscious model for the EEC’s treatment of the prospect of relations with the CMEA.[22]

If the EEC recognizes the CMEA, this is unlikely to be a recognition on equal terms. The EEC countries have little to gain economically from formalizing relations with the CMEA; however, such relations do have a role to play in the political construction of Europe. If the EEC countries succeed in increasing their penetration of Eastern Europe in the longer run, then the only way the Soviets could maintain this region as a buffer zone would be to encourage a certain amount of economic (perhaps even political) cooperation in Eastern Europe, autonomous of Soviet participation. Recent events cannot be encouraging in this regard: the Soviets have never been warm to attempts to construct all-Balkan cooperation, and during winter 1985-86 they put the chill on a putative “Berlin- Budapest-Bucharest axis” that sought expanded political contacts with Western Europe at a time of very poor superpower relations. Still, such a development cannot be ruled out in the long run: who would have thought in 1957 that the Soviets would entertain the prospect of formal political relations with the EEC? If distinct and autonomous East European movement toward regional economic and political integration does develop, however, it will certainly not be discernible before the 21st century.

In the late 1940s, the Soviets supported the stillborn International Trading Organization (ITO) which was to have been a part of the Bretton Woods system. In 1956, they proposed to the U.N. Economic Commission for Europe that a European Trading Organization should be created, and they unsuccessfully pushed a similar initiative at the CSCE meetings in the 1970s. Thus, the USSR has historically favored the creation of new international organizations, and of legal and procedural frameworks for the regulation of international trade, while seeking consistently to break the capitalist countries’ hold on whatever international economic institutions they dominate. This attitude helps to explain the USSR’s behavior at UNCTAD, its positions articulated in the U.N.’s International Law Commission, and its general approach to international trade law. The Soviets have traditionally been less concerned with maximizing their maximum possible economic gain than with minimizing their maximum possible political loss.

Yet the experience of the East European countries demonstrates that those international economic institutions will adapt to some aspects of centralized statist planning, [23] whereas recent attempts to reinvigorate CMEA coordination of East bloc economic activity have run into significant obstacles. The revision of intra-CMEA pricing rules, motivated by Soviet interests in the mid-1970s, forced the smaller CMEA countries to turn to world markets to satisfy their needs for energy and raw materials. But it was precisely these commodities that—through their extraction, refinement, and trade – formed the basis for CMEA’s earlier successes in promoting East bloc economic cooperation. Economic managers in some of the smaller CMEA countries now see long-term advantages emerging from their need for hard currency, because this requires them to become internationally competitive in other export markets. It should come as no shock to hear even East European planners remark that the CMEA has been transformed from an integration mechanism into a disintegration mechanism. Having failed to delegitimize the EEC, the Soviets seem to wish to enlist its aid to relegitimize the CMEA.

Notes

[Note 1]. For a detailed discussion of the different East European foreign-trade reforms, see Harriet Matejka, Trade Control in Eastern Europe (Geneva: Éditions Médécine et Hygiène, 1978); for concise analysis of their political effect on the bloc, see Andrzej Korbonski, “Détente, East–West Trade, and the Future of Economic Integration in Eastern Europe,” World Politics, Vol. 28, no. 4 (July 1976), pp. 568–89.

[Note 2]. On the Complex Program, see Peter Marsh, “The Integration Process in Eastern Europe, 1968 to 1975,” Journal of Common Market Studies, Vol. 14, no. 4 (June 1976), pp. 311–35, esp. pp. 322–27. For a comprehensive review of the CMEA’s institutional developments during this period, see Zbigniew M. Fallenbuchl, “East European Integration: COMECON,” in United States Congress, Joint Economic Committee, Reorientation and Commercial Relations of the Economies of Eastern Europe (Washington, D.C.: U.S. Government Printing Office, 1974), pp. 79–134, esp. pp. 96–122.

[Note 3]. The proceedings of the 1973 conference were published in Opyt i perspektivy sovmestnykh deistvii kommunistov i sotsialistov: Materialy nauchnoi konferentsii, sostoiavsheisia v AON pri TsK KPSS, 18–19 aprelia 1973 goda [The Experience and Perspectives of Joint Activities of Communists and Socialists: Materials of a Scientific Conference, Held in the Academy of Social Sciences attached to the CC CPSU, 18–19 April 1973] (Moscow: [AON pri TsK KPSS], 1974). A summary of the general evolution of Soviet perspectives on the West during this period is in Jerry F. Hough, “The Evolution in the Soviet World View,” World Politics, Vol. 32, no. 4 (July 1980), pp. 509–30; but for a view contesting Hough’s interpretation of that evolution, see Hannes Adomeit, “Soviet Perceptions of Western European Integration: Ideological Distortion or Realistic Assessment?” Millennium, Vol. 8, no. 1 (Spring 1979), pp. 1–24.

[Note 4]. For detail of this argument, see Robert M. Cutler, “The View from the Urals: West European Integration in Soviet Perspective and Policy,” in Werner G. Feld (ed.), Western Europe’s Global Reach (New York: Pergamon, 1980), pp. 80–119.

[Note 5]. A. Anikin, “Valiutnyi krizis kapitalizma: Prichiny i posledstviia” [Capitalism’s Currency Crisis: Causes and Consequences], Kommunist, 1971, no. 10 (July), p. 95.

[Note 6]. For an in- depth examination, see Alain Rémy, “Le rôle de l’or dans l’économie monétaire occidentale: Analyses soviétiques,” Thèse pour le doctorat de troisième cycle (Université de Paris I—Panthéon–Sorbonne, October 1981).

[Note 7]. A. V. Kozlov, “Sovremennyi valiutnyi krizis i mezhimperialisticheskie protivorechiia (SShA–Zapadnaia Evropa)” [The Contemporary Currency Crisis and Interimperialist Contradictions (USA–Western Europe)], Diss. kand. ekon. nauk (Moskovskii finansovyi institut, 1975).

[Note 8]. A full page of articles on the subject of the conference, “prepared by the scientific workers of IMEMO,” was published under the general headline “Mir kapitalizma: v tupike protivorechii” [The World of Capitalism: In the Blind Alley of Contradictions], in Pravda, February 16, 1972, p. 4. The conference proceedings themselves were subsequently published in Polish: Jerzy Bartosik and Zdzislaw Nowak (eds.), Procesy integracyjne w systemie wspólczesnego kapitalizma (Poznan: Instytut zachodni, 1973).

[Note 9]. Ratiani’s series of five articles was published in early 1972 under the general title “Partnery i soperniki” [Partners and Rivals], in Pravda, January 18, 21, and 25, and February 2 and 9, 1972, p. 4 of each issue. Information on his career is in Iurii Zhukov, “K chitateliu” [To the Reader], pp. 3–12 of Georgii Ratiani, Na Blizhnem i Dal′nem Zapade: Kniga vtoraia [In the Near and Far West: Book Two] (Moscow: Pravda, 1980), a posthumously published collection of his journalism that also reprinted that series.

[Note 10]. “Rech′ tovarishcha L. I. Brezhneva” [Speech of Comrade L. I. Brezhnev], Pravda, March 21, 1972, p. 2.

[Note 11]. Robert Legvold, “Four Policy Perspectives: The Soviet Union and Western Europe,” mimeographed (Cambridge: Harvard University, Russian Research Center, January 1976), pp. 7–21.

[Note 12]. For a good summary of formal interbloc developments in the 1970s (which does not, however, mention the fisheries issue), see Max Baumer and Hanns- Dieter Jacobsen, “EC and COMECON: Intricate Negotiations between the Two Integration Systems in Europe,” in Feld (ed.), Western Europe’s Global Reach, pp. 110–24; also John Pinder, “Economic Integration and East–West Trade: Conflict of Interests or Comedy of Errors?”, Journal of Common Market Studies, Vol. 16, no. 1 (September 1977), pp. 1–21.

[Note 13]. For a survey of the thorny question of a common export credit policy, see Peter Marsh, “Development of Relations between the EEC and CMEA,” in Avi Shlaim and G.N. Yannopoulos (eds.), The EEC and Eastern Europe (Cambridge: Cambridge University Press, 1979), pp. 57–61.

[Note 14]. See Sophie Verny, “CEE–CAEM: Le problème de la reconnaissance mutauelle,” Courrier des pays de l’Est, no. 305 (April 1986), pp. 34–37, for a detailed chronology of recent developments.

[Note 15]. See U.N. General Assembly, Official Records, A/C.6/SR.1403 (October 6, 1973), A/C.6/SR.1489 (October 31, 1974), A/C.6/32/SR.38 (November 7, 1977).

[Note 16]. The hegemon of the Eastern bloc—the USSR—is a member of the CMEA, yet the United States is not a member of the EEC; however, the United States is a member of the OECD. For development of this argument, see John Pinder, “The Political Economy of Integration in Europe: Policies and Institutions in East and West,” Journal of Common Market Studies, Vol. 25, no. 1 (September 1986), pp. 11–12.

[Note 17]. See, for example, U.N. General Assembly, “Report on the Most-Favored- Nation Clause, by Mr. Nikolai Ushakov, Special Rapporteur,” A/CN.4/309 and ADD.1 and 2 (April 11 and 12, and May 8, 1978), in Yearbook of the International Law Commission, Vol. 2, pt. 1, p. 9.

[Note 18]. Giampaolo Calchi Novati, “The EEC and the Gulf Cooperation Council,” Politica internazionale [English ed.], Vol. 4, no. 1 (Spring 1985), pp. 110–18.

[Note 19]. For elaboration, including a discussion of other forums (e.g., GATT) where the East Europeans make known their demands, see John Pinder, “The Community and Comecon: What Could Negotiations Achieve?”, World Today, Vol. 33, no. 5 (May 1977), pp. 176–85.

[Note 20]. A good overview, and still current, is Henryk De Fiumel, “The Council for Mutual Economic Assistance in International Relations,” Studies on International Relations (Warsaw), Vol. 7 (1976), pp. 68–77.

[Note 21]. See Robert Legvold, “The Problem of European Security,” Problems of Communism, Vol. 23, no. 1 (January–February 1974), pp. 13–33, for this argument.

[Note 22]. I wish to thank Baard Bredrup Knudsen, University of Oslo, for this insight. See also his “Europe between the Superpowers,” Cooperation and Conflict, Vol. 20, no. 1 (1985), pp. 91–112.

[Note 23]. See Valerie J. Assetto, The Soviet Bloc in the IMF and the IBRD (Boulder, Colo.: Westview, 1986).

Dr. Robert M. Cutler [ website — email ] was educated at MIT and The University of Michigan, where he earned a Ph.D. in Political Science, and has specialized and consulted in the international affairs of Europe, Russia, and Eurasia since the late 1970s. He has held research and teaching positions at major universities in the United States, Canada, France, Switzerland, and Russia, and contributed to leading policy reviews and academic journals as well as the print and electronic mass media in three languages.

 
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