Council For Mutual Economic Assistance Countries Research Articles

Editor's Note

December 01 2020 Editor's Note Author and Article Information Online Issn: 1531-3298 Print Issn: 1520-3972 © 2020 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology2020President and Fellows of Harvard College and the Massachusetts Institute of Technology Journal of Cold War Studies (2020) 22 (4): 1–3. https://doi.org/10.1162/jcws_e_00963 Cite Icon Cite Permissions Share Icon Share Facebook Twitter LinkedIn MailTo Views Icon Views Article contents Figures & tables Video Audio Supplementary Data Peer Review Search Site Citation Editor's Note. Journal of Cold War Studies 2020; 22 (4): 1–3. doi: https://doi.org/10.1162/jcws_e_00963 Download citation file: Ris (Zotero) Reference Manager EasyBib Bookends Mendeley Papers EndNote RefWorks BibTex toolbar search Search Dropdown Menu toolbar search search input Search input auto suggest filter your search All ContentAll JournalsJournal of Cold War Studies Search Advanced Search This issue begins with an article by Michael De Groot discussing the impact of the 1973–1974 Arab oil embargo and the concomitant rise in global energy prices on the Soviet-led Council for Mutual Economic Assistance (CMEA). Although the Soviet Union as an energy exporter stood to gain economically from the surge of prices, the crisis had broad negative consequences in CMEA, underscoring the flaws and inefficiencies of Soviet-style economies. Most of the East European countries in the 1970s had borrowed extensively from Western banks and governments, causing a large buildup in hard-currency debt. Because increases in Soviet energy production did not keep pace with the surge of debt-fueled demand from other CMEA countries, the Soviet Union decided to raise prices for CMEA importers, deepening the economic pressures they were facing in the early 1980s as payments on their foreign debts came due. The sharp increases in energy costs in the... You do not currently have access to this content.

A multilateral payments union for Eastern Europe

This paper attempts to assess the advantages and disadvantages of a payments union for the Eastern European member countries of the former Council for Mutual Economic Assistance (CMEA). The main question is whether CMEA countries should be subject to a ‘shock’ therapy of rapid liberalisation or whether a more gradual approach with restricted convertibility would be advisable. The author analyses the case for multilateralism versus bilateralism and proposes a tentative partial compromise solution.

Spezialisierungsinteresse und Integrationsaversion im Rat für Gegenseitige Wirtschaftshilfe: Der DDR-Werkzeugmaschinenbau in den 1970er Jahren

Abstract Socialist economic integration’ in the Council for Mutual Economic Assistance (CMEA)officially aimed at progressing from the member states’ bilateral trade to the bi- and multilateral coordination of production, research and development. The East German economy had, on the one hand, a vital interest in this international division of labour through political planning that stabilized markets for imports and exports and created economies of scale. On the other hand, politically planned specialization with the lower industrialized CMEA countries tended to preserve the existing structure of GDR industry instead of stimulating technological progress. The article illustrates this dilemma with a case study of the machine tool industry. In the 1970s, this highly qualified and traditionally trade-intensive branch fell behind the international trend that went from numerical control (NC) to computerized numerical control (CNC) technology. But the problem of declining international competitiveness was already detected in the 1960s and early 1970s regarding traditional NC machine tools. Evidence shows that even these less complex tasks could not be managed sufficiently by CMEA or bilateral integration measures.

Trade in quality goods, trading regimes and unemployment in transition economies1

AbstractOne of the most important consequences of the transition in Central and Eastern Europe (CEE) has been the dismantling of the Council for Mutual Economic Assistance (CMEA). It is argued in this paper that the abrupt loss of trading partners for the former CMEA countries and the Newly Independent States (NIS) are partly responsible for the ensuing contraction of output and the emergence of unemployment. A model in which trade is conducted in vertically‐differentiated products is constructed with the implication that the dismantling of ‘clearing trade’arrangements among CMEA countries may make unemployment more than just a short‐term phenomenon.

Economic integration in Eastern Europe

This paper reviews the activities of the Council for Mutual Economic Assistance (CMEA) since its establishment in 1949. It points out that, while specialization agreements have permitted the exploitation of economies of scale, technological progress has been slow. The issue of whether the Soviet Union subsidized the partner countries through trade is considered and the possibility of payments arrangements among former CMEA countries is discussed. The paper also evaluates alternative patterns of cooperation among former CMEA countries.

Interpreting the Soviet subsididzation of Eastern Europe

In trade among the members of the Council for Mutual Economic Assistance (CMEA), prices of raw materials are lower and those of manufactured goods higher than comparable world prices. Because the Soviet Union is a net exporter of raw materials to, and net importer of manufactures from, the other CMEA countries, it benefits less from CMEA trade than it would from trading with the rest of the world, and the other CMEA members benefit more. This redistribution of the gains from trade is generally seen as a form of subsidization. One explanation of these subsidies is that they represent Soviet payments for political and military benefits provided by East European regimes; another is that the subsidies compensate Eastern Europe for the economic burden imposed by central planning and extensive economic ties to the Soviet Union. I argue that neither of these explanations is consistent with the type of economic and political relations that one would expect of the Soviet and East European regimes. In their place I offer an alternative explanation based on the Heckscher-Ohlin model of comparative advantage. The distribution of CMEA subsidies is shown to reflect the distribution of gains from trade that would arise among any group of economies forming a preferential trading scheme. I also argue that the willingness of members to belong to CMEA, even at the expense of paying subsidies, is that CMEA can be viewed as a club that provides benefits to members while imposing costs that may to some extent be unequal and unpredictable.

East-South relations at UNCTAD: global political economy and the CMEA

UNCTAD provides a unique focus for studying the response of the Council for Mutual Economic Assistance (CMEA) to the New International Economic Order. Not only has UNCTAD played a role in stimulating East-South trade links since its foundation in 1964 but the East European members of the CMEA, collectively incarnated at UNCTAD as Group D, have there transformed their behavior with respect to the less developed countries. This transformation is evident in the evolution of Group D's position across four sets of negotiations: those on commodities trade and the Common Fund, on the Generalized System of Preferences, on the Code of Conduct for Liner Conferences, and on the Code of Conduct for Transfer of Technology. Contrasts between the conduct of the CMEA and that of the EEC at UNCTAD highlight the significance of Group D's use of international law to remake the world trade system. Implicit in this strategy is the question of domestic state trading structures, which appears to be a principal factor motivating issue-specific coalitions at UNCTAD between the CMEA countries and the Group of 77. The CMEA countries use UNCTAD to reinforce their sovereign prerogatives as states in a transnational world, refashioning at the same time the transnational environment in which states conduct mutual relations, in order to reconstruct in their own favor the international regimes governing various aspects of trade and development.

Prospects for integration in the Council for Mutual Economic Assistance (CMEA)

In analyzing the future of the Council for Mutual Economic Assistance (CMEA), it is useful to assess both the centrifugal and centripetal forces affecting regional economic integration. Centrifugal forces include the existing structure of production in Eastern Europe; problems of coordination; and inefficient price systems, among others. Centripetal forces include the worldwide energy crisis; Western inflation and recession; the growing importance of trade blocs; and numerous other factors contributing to the increasing hard-currency indebtedness of the Eastern European countries. Many of these external events have increased the attractiveness for CMEA countries of intrabloc economic relations and provided a momentum for CMEA integration. Analysis of the various forces leads to the conclusion that Soviet economic policy vis-à-vis Eastern Europe will remain crucial in determining the direction and speed of economic integration. Soviet economic involvement with Eastern Europe seems to have been costly for the USSR during the past decade and so it is not obvious that the USSR will attempt to push integration much further than it now stands.

Council for Mutual Economic Assistance

The Council for Mutual Economic Assistance (COMECON) held its seventeenth session in Bucharest on December 74–20, 1962, attended by delegates from Bulgaria, Czechoslovakia, East Germany, Hungary, Mongolia, Poland, Romania, and the Soviet Union. A communiqué stated that a permanent currency and finance commission had been set up under the Council to develop cooperation in those fields among COMECON member countries, that international specialization and “socialist division of labor” among members had increased, and that during the first nine months of 7962 over-all trade among member countries had risen by 15 percent and trade in machinery and industrial equipment by 24 percent. The communiqué noted that the COMECON countries were now largely self-sufficient in certain raw materials, manufactures, etc., notably lignite, hard coal, oil and oil products, fertilizers, grain, machinery and industrial equipment, and timber.