U.S. Role in East-West Trade: An Appraisal
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INTRODUCTION *With the advent of detente and the 1972 Trade Agreement with the USSR, there was great expectation in the early seventies that East-West trade would flourish and that the U.S. would capture a share of the Eastern1 market that would be commensurate with its size and importance in world trade. To that point ithad lagged considerably behind the other major industrialized nations. For the period 1971-1973, the United Nations data, as reported by the Bureau of East-West Trade, show an increase in the U.S. share of Industrialized West (IW)2exports to the Eastern bloc: in 1971, the U.S. share was only 4%; in 1972, it had more than doubled to 8.7%; by 1973, it accounted for 14.7% of the Industrialized West exports to the Eastern markets. Import shares for the same years were: 1971-2%; 1972-4.5%; and 1973-4%3. The 1972 Trade Agreement with the USSR was the first attempt by the U.S. to establish a general bilateral trade agreement with a communist country; and it included provisions for the granting of Most Favored Nation (MFN) status, for general cooperation and an increase in trade (an anticipated tripling over a three-year period), for payments in a convertible currency, and for supervision of the Agreement by the Joint U.S.-USSR Commercial Commission.4 The Soviets, however, never put the Agreement into effect because the necessary legislation in the U.S. culminated inthe Trade Act of 1974, parts of which were unacceptable to the Soviets, particularly Section 402 (Jackson-Vanik Amendment), which links MFN status to the right of free emigration, and Section 613, which places a limit on the aggregate amount of Eximbank credits available to the Soviet Union. For the 1974-1976 period, the U.S. share of Industrialized West exports to Eastern Europe was as follows: 1974 -9%; 1975-10.5%; and 1976-12.4%. Even though the U.S. share of IWexports of manufactured goods is small in comparison to several of its competitors, it has been increasing (sales of U.S. subsidiaries are not reflected in these shares). The U.S. share of imports for the same period was: 1974-6%; 1975-4.7%; and 1976-4.9%. In actual dollars, exports grew from 1.5 billion in 1974 to 3.5 billion in 1976. The share of manufactured goods of total U.S. exports improved for 1974 when it rose from a low 21% in 1973 to 40% in 1974. For 1975, it declined to 35% and for 1976, to 30%. Imports, however, for the same period declined from $900 million in 1974 to $800 million in 1975, and they slightly exceed $800 millionin 1976.5 Thus, itseems that, without a bilateral trade agreement, without Most Favored Nation status (MFN), and with limitations on government credits, U.S. involvement in East-West trade has continued to * Dr. Irene Lange is Professor and Chairperson,Departmentof Marketingat CaliforniaState University,Fullerton.She served withthe Bureauof East-WestTrade, U.S. Departmentof Commerce fortwo years and has conducted numerousstudies on East-Westtrade. * James F. Elliottis Assistant Professorof Slavic languages, Universityof Tennessee. He has recentlyser
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