The Need for a New Foreign Trade Regime

Abstract

In this paper, I intend to demonstrate that policy measures adopted in the 1980s both in East European and Western countries have been largely ineffective in dealing with growing global imbalances. In particular, these measures contributed to the consequences of the crisis of 1980 to 1982, leading to slow economic growth and stagnation in East-West trade. I will also formulate some proposals for a more appropriate policy framework for both groups of countries.2) Section 16.1 provides a general description of the present economic position of Eastern and Western countries with regard to East-West trade in the 1980s. Section 16.2 starts with a brief summary of the global crisis of 1980 to 1982 and gives an overview of policy adjustments undertaken in Eastern and Western economies. Against this background the need for a new type of economic and trade policy is emphasised, and specific policy measures for East-West trade expansion and development are proposed and discussed in Section 16.3. Section 16.4 concentrates on selected problems and difficulties which are likely to arise during the process of implementation of the new policy. Conclusions are summarised in Section 16.5.KeywordsForeign ExchangeForeign TradeReal Exchange RateSocialist CountryDomestic CurrencyThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.