Iehc 2006 session 101

IEHC 2006

SESSION 101

Cold War and Neutrality: East-West Economic Relations in Europe

9

quota-based protocol ensuring for Czechoslovakia the import of food, silk and, most

importantly, iron ore, ball bearings, aluminum a semi-finished products made of aluminum,

various apparatuses and machine equipment, watches, medicines, coloring agents and

chemicals. In exchange for this, food was to be supplied to Switzerland – primarily malt, hops

and sugar as well as coke, machines, iron pipes, cast iron and various consumer products. For

unspecified types of goods, a global quota worth 7 million Czechoslovak Crowns was

proposed. The payment arrangement set forth a clearing procedure administrated by central

banks, based on the payment of excess financial amounts in a freely convertible foreign

currency.

18

The Czechoslovak negotiating position was very good because there was a difficult

situation in Switzerland as concerned supplies and the Czechoslovak supplies meant a

substantial contribution to addressing this situation. Prague achieved the release of the assets

of the Czechoslovak National Bank, which was a condition for Czechoslovak ratification.

19

As Ch. Späti reminds, the demand for Czechoslovak goods lead to expansion of the

Czechoslovak export. The volume of mutual trade was nicely growing. While previously the

Swiss share in Czechoslovak import amounted to 3.3%, it rose to 22.4% at the end of 1945.

The Czechoslovak import to Switzerland reached as much as 33.7%. In Prague, they tried to

increase the export excess, which, within the clearing system, was bringing a considerable

foreign currency benefit. Switzerland became the main Czechoslovak trade partner; Hubert

Ripka, the Minister of Foreign Trade, called it "the Czechoslovak gate to the world". The

cause of the unprecedented boom in mutual relations was the simple fact that both countries

perceived these relations as a substitute for their traditional relations with Germany, which

was the most significant pre-war partner of the two countries.

20

The Annex 1 to the Protocol on Goods Exchange Regulation, agreed in August 1945,

was a letter, which envisioned that the an agreement on all types of payments related to past

obligations (old claims) would soon be achieved. Since, after the expiration of the Protocol,

the Swiss government made any further negotiations on exchange of goods contingent on the

regulation of non-trade payments, negotiation on this issue took place in Bern from

15 February to 9 March 1946, which resulted in the formation of three agreements, namely

the Agreement on Regulation of Payments from Insurance and Reinsurance Relations, the

18

  The  Protocol  on  the  Regulation  of  the  Exchange  of  Goods  and  Payments  between  Czechoslovakia  and

Switzerland – ratification, NAP, PMO – current files 1945 – 1968, carton 1395, no. 110/46 d v.

19

 Späti Ch., o. c., p. 159 and 171.

20

 Ibidem, p. 172 – 173.

---

IEHC 2006

SESSION 101

Cold War and Neutrality: East-West Economic Relations in Europe

10

Agreement on Regulation of Remittance of Revenues on Swiss Capitals Deposited in the

Czechoslovak Republic and the Agreement on the Settlement of Former Slovak-Swiss Clear

(from the war period). The settlement of old claims was to be completed by 30 September

1946. Switzerland reciprocated the Czechoslovak concession by releasing the gold belonging

to the former Slovak National Bank and by releasing the claims of Czechoslovak banks and

other organizations in the Swiss territory. The path to trade negotiations was opened.

21

The negotiations about a new regulation of trade relations were taking place in Prague

from 23 April to 3 May 1946. The resulting protocol, signed along with the above-mentioned

financial agreements, was agreed for an indefinite period but the quota lists were to be valid

for only 6 months again. Nevertheless, the Czechoslovak party was satisfied. Export was to

reach one billion of Czechoslovak Crowns; import was to be lower by one quarter, which was

to bring the so-much needed foreign currency to the country. For the quotas of undefined

goods, 60 million Crowns were earmarked (a financial reserve for the import of any necessary

goods); in addition to the traditional import of machines, the quotas for iron ore, ball bearings,

chemical substances and coloring agents were increased. A mixed commission was set up to

address problems connected to the trade exchange.

22

In October 1946, the validity of the old quota lists expired and new trade negotiations

were supposed to be started. Before they were started, the Swiss Embassy in Prague

announced that "the Swiss government does not intend to enter into any agreement of

commercial nature, if the [remaining] issues resulting from the provision on nationalization

and confiscation of Swiss property in Czechoslovakia are not settled"

23

. The negotiations

were complicated and long (14 – 19 December 1946; 12 February – 8 March 1947). On

8 March 1947, an amendment to the Agreement on Trade Relations and Payments between

the Czechoslovak Republic and Swiss Federation was signed; however, this was preceded by

the signing of the Protocol on Czechoslovak-Swiss Trade Negotiations, signed on the same

date. The Protocol set forth the Swiss request for resumption of the debt service concerning

the Austrian and Hungarian debt, which the Czechoslovak Republic assumed in the inter-war

period. At the same time, the Protocol contained the Czechoslovak promise for compensations

and the method of paying them through 5% interest-bearing bonds.

21

 Record for the Prime Minister, 1. 6. 1946, NAP, PMO, carton 1395, no. 1175/46-d v.

22

 Protocole concernant les échanges de merchandises et le règlement des paiments entre la République

Tchécoslovaque et la Suisse, Prague 3. 5. 1946, NAP, MFT, Territorial departments  1945 – 1970, Switzerland,

carton 129,  j. 53266/46.

23

  Czechoslovak – Swiss trade negotiations protocol,  8. 3. 1947, ibidem, sine.

---