Iehc 2006 session 101

IEHC 2006

SESSION 101

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

17

finances. It was a declaration stating that the payment was not used for transactions that

would be in conflict with the American regulations on the trade between the East and the

West.

43

 The American pressure restricted the possibility of using transit from third countries

and Swiss re-export of the embargoed goods to such an extent that it was actually eliminating

this trading method as a source of raw materials and technical and technological know how.

44

It also became one of the major factors of the further marked decrease of Czechoslovak

import from Switzerland in 1952.

The second meeting of the mixed Czechoslovak-Swiss governmental commission was

concluded by a protocol signed in Bern on 12 May 1952. The volume of the quotas of goods

totaled 2.2 billion Czechoslovak Crowns; 1.2 billion was to be the volume of Czechoslovak

export and the volume of import was to be lower by 130 million. The structure of the agreed

exchange of goods did not change in any fundamental manner. The rationale report for the

government stated that the import of investment commodities, special apparatuses, bearings,

chemicals as well as aluminum and aluminum semi-finished products was ensured.

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 The

declining volume of the trade exchange was confirmed by the third meeting of the mixed

commission held in Prague on 15 – 25 April 1953, where a reduction of the quotas defined in

the quota lists by approximately 15 percent was agreed. Czechoslovakia was reducing the

deliveries of coke, iron and steel, which were in short supply in Czechoslovakia.

The result of the decrease of Czechoslovak export, combined with the necessity of

strategic economic imports, was a constantly passive balance of the Czechoslovak foreign

trade in relation to Switzerland. This was clearly worsening the almost desperate

Czechoslovak lack of valuable currencies, which resulted in the sale of a part of the golden

reserves of the Czechoslovak State Bank, mentioned at the beginning of this paper. The gap

between import and export was constantly widening until 1953. The unfavorable trend was

not significantly changed even by a change of the structure of the goods imported to

Czechoslovakia, in which the quickly increasing share of raw materials was to be

compensated by reducing the import of consumer goods and food (see appendix no. 6). The

year 1953 was the year of the deepest decline in the mutual trade exchange in the 1940'ies and

43

 The text of the statements accompanying the remittances was as follows: Der Unterzeichnete bestätigt hiermit,

dass obgenannter Zahlung weder direkt noch indirekt geschäftliche oder private Transaktionen zu Grunde liegen

welche im Widerspruch mit den US-Bestimmungen betreffend den West-Osthandel stehen, und dass darin im

Speziellen keine Chinesischen oder Nord-Koreanischen Interessen involviert sind. Enclosure to letter of

Czechoslovak embassy in Bern to MFT, ibidem, no. 319/v. NM.

44

 Ch. Späti, o.c., p. 273.

45

 Report on negotiations of mixed commission for government meeting, 6. 6. 1952, NAP, PMO, carton 1395,

no. 15141/52.

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IEHC 2006

SESSION 101

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

18

1950'ies. The import converted to the new currency decreased to 106 million and the export

dropped down to mere 90 million Czechoslovak Crowns (see appendix no. 4).

The unclear legal issues and new facts in mutual relations brought a new trade

agreement signed on 24 November 1953, which replaced the 1927 framework agreement and

the system of annexed protocols. But that is another separate story.

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Czechoslovak-Swedish Economic Relations

The trade relations between Czechoslovakia and Sweden after World War II were also

building on the pre-war tradition. The trade and payment agreement of 18 April 1925

47

 was

implicitly recognized by both parties as valid It was important that it had not been terminated.

By that agreement, Czechoslovakia and Sweden mutually provided a most favored nation

clause.

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 However, the Czechoslovak party was extremely interested in regularizing mutual

relations under the new circumstances. Especially the industrial sector was highly dependent

on the renewal of Czechoslovak-Swedish trade relations. The Ministry of Industry had to

ensure import of Swedish ores, which were deemed to be necessary for successful post-war

reconstruction because in some large enterprises like the former Rothschild iron works in

Vítkovice, it was impossible to replace this ore with some other one because the technology

there was adjusted to the high-quality Swedish ore already since the period of Austro-

Hungarian monarchy.

Therefore the Ministry of Industry sent its representatives to Sweden in order to

quickly ensure deliveries of ores. In autumn 1945, the representatives visiting Sweden

prepared the ground for conclusion of an inter-state agreement on the regulation of trade

relations. The draft agreement, which the delegation of the Ministry of Trade brought from

Stockholm was approved by the Swedish party beforehand and the Swedish party even

immediately started to implement this agreement. Due to the lack of time, the payment issues

were not covered in the agreement. The advantage of immediate implementation, however,

involved the necessity to forego further negotiations about partial modifications of the

agreement and to accept it as it had been drafted because otherwise there was the risk that the

46

 Ch. Späti, o. c., p. 286-287.

47

 No. 50/1925, no. 119/1925 in Sbírka zákon  a na ízení republiky  eskoslovenské.

48

 The situation report on the current status of bilateral general trade agreements with the GATT member states

(a  material  for  the  Minister's  council),  22.  3.  1954,  NAP,    MFT,  secretariate  of  the  minister,  uninventoried

materials, no.  201.952/54-MO/2.

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