This report provides estimates of the magnitude, direction, and composition of the foreign trade in nonmilitary electronic goods of the USSR and thc six fully participating Eastern European members of CEMA, as well as an appraisal of the relative site of the contribution made by each of these countries to that trade* The estimates cover only international shipments of electronic andgoods and are exclusive of the value of technicalprograms, training programs, and sale of manufacturing licenses.
Ihe quality of the statistical estimates varies and reflects primarily the completeness of the published trade statistics. much of the analysis is based on fragmentary data, it is believed that national totals of exports and Imports fall within an acceptable range of confidence. Estimates5 arc preliminary.
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Summary
Affecting Rates of Growth of Trade
Specialization
ln Intra-Bloc
ln Trade Between the Bloc and .Ion-Bloc Countries
Appendix A.
Appendix B. Statistical Tableo
Bloc: Estimated Trade in Nonmilitary Electronic
Equipment with Bloc and Bon-Bine .
Bloc: Estimated Trade ln Nonmilitary Electronic
Equipment,c
3- Selected Soviet Bloc Countries: Exports ofEqulpoent Compared with Production8 and
4. USSR: Estimated Trade in Nonmilllary Electronic
Equipment, by Category,
5- USSR: Estimated Trade In Nonmilitary Electronic
Equipment with Bloc and Non-Bloc .
6. Soviet Bloc: Estimated Trade in Nonmilitary
Electronic Equipment, by
7- Soviet Bloc: Estimated Trade in Nonmilitarywith Non-Bloc Countries, by Bloc
8. Soviet Bloc: Estimated Trade in Nonmilitary Electronic Equipncnt with Non-Bloc Countries, by Category,
Figure I. Soviet Bloc: Trade in nonmilitary Electronic
Figure 2. Soviet Bloc: Imports of Honmilltaryfrom Bloc and Non-Blocfollowing page
Figure 3- Soviet Bloc: Exports of Nonmilitaryto Bloc and Non-Blocfollowing page
Figure k. Selected Soviet Bloc Countries: Exports of
Nonmilitary Electronic Equipment Comparedof All Electronicollowing page
Figure 5- USSR: Trade in Nonmilitary ElectronicEastern European Countries,5 following page .
SOVIET BLOC TRADE PATTERNS IN NONMILITARY ELECTRONIC EQUIPMENT*
Summary
The foreign trade of the Soviet Bloc in electronic goods grew rapidly, mainlyesult of the greater interdependence among the Communist countries of Eastern Europe (see Trade in these goods with non-Bloc countries grew less rapidly as the Blocan improved capability to satisfy its needs for electronics from its own production.
:BLOC;:TRADE IN. NONMILITARY^ELECTRONIC'^I
* The estimates and conclusions in this report represent the bestof this Office as of Thc terms Soviet Bloc and Blocdhis report include the USSR and the Eastern European Communist countries (or Eastern Europe)ulgaria, Czechoslovakia. East Germany, Hungary. Poland, and Rumania.
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The Communists imported from the Free World small quantities of advanced or specialised equipment to solve specific technological problems that had been retarding the development of theirndustries. The very considerable increase in Soviet imports offrom the Eastern European countries was only partlyfor by Soviet exports to those countries. Virtually all Soviet imports from Eastern Europe consisted of nonmilitary electronic goods because of the high priority given in the USSR to the production of military electronics. Important trends in the structure of the trade were the growing dominance of communications gear and the emergence of coordinated international specialization among the Eastern European countries in the production of electronic components.
It is estimated that Soviet Bloc trade in electronics5 totaled more than three times that8 (see Hie growth rate on the Import side was comparatively steady throughout most oferiod, as shown in Figure 1. Although the Free World provided substantial quantities of electronic goods to the Soviet Bloc, the countries of the Bloc depended on one another for the bulk of their electronic Imports (see Moreover, theyery small share (no more thanercentr their exports of electronics in non-Bloc countries (see
The principal Bloc exporters or electronic goods were Hungary, East Germany, end Czechoslovakia (see The principal importers were the USSR, Poland, and Czechoslovakia. The USSR, Poland, Bulgaria, and Rumania imported more electronics than they exported, whereas Hungary, Czechoslovakia, and East Germany were net suppliers of these goods. omparison of the production and exports of electronics by the principal producing countries is shown innd Figure 4.
II. Factors Affecting Rates of Growth of Trade
During the three-yearn accelerated rate of growth in trade resulted in an exchange of electronic goods among the Soviet Bloc countries3 that was more than double that In part this acceleration was the result of rapidly increasing Soviet requirements for electronics for defense purposes. Although the USSHteeply increasing volume of defense electronics from an expansion of domestic producing facilities, the concomitant lowering of priority for domestic production cf nonmilitary electronicsthe Soviet market for nonmilitary electronic imports from the Eastern European countries. oviet Imports from these countriesonsisting almost wholly of communications equipment and instruments and of components of industrial and entertainment grade (seeereimes the amount in(see
Another factor which contributed to the growth of exports from the Eastern European countries to the USSR.as well as to trade among these countries, was the general maturing of the electronics industries of the principal producing countries among the former Satellites. This situation was characterizedisproportionately large rise in the volume of output of some electronic goods relative to the Increase in domestic demand and also by an improvement in the quality of some goods, making them more readily salable in other Bloc countries. 'Ihe exchange of technical information and production licenses among the Bloc countric-ii vqis on important factor in the product improvement achieved by the Eastern European electronics industries. For example, the Hungarian Industry was able to produce transmission equipment for
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VESKA broadband microwave communications systems under license from tbe USSR with Soviet technical assistance, and (with Czechoslovak licensing and technical help) the East German electronics industry added crossbar telephone exchanges to its export catalogue.
III. International Specialization
The increased specialization in electronics production which took place among the individual Eastern European countries is reflected in the fact that exports by all the Eastern European countries increased and those in East Germany, Czechoslovakia, and Poland grewigher rate than production (seend Although available export data for individual countries cannot be satisfactorilyto show the country of destination, fragmentary information on the recent electronics trade of the Eastern European countries (except Hungary) indicates that their exports were received Involume not only by the USSR but also by each other. Hungary participated less than the others in Eastern European trade. Hearlyercent of Hungary's exports of electronics were received by the USSR, and the remainder was divided about equally between the non-Bloc countries and the other Eastern European countries. Moreover, about two-thirds of Hungary's Imports of electronics vere obtained from outside the Bloc. Consequently, although Hungary participated with the other Eastern European countries in internationalprograms. It was less dependent than they were on such programs.
International specialization in the production of electronics occurred among these countriesesult of both deliberateand the natural evolutionary development of traditional speclaltit International specialization in the production of electron tubesused by all Bloc countries was undertaken by common agreement among Czechoslovakia, Hungary, East Germany, and Poland This development resulted in increased output and reduced production costs and alsoarge increuse in the numbers of electron tubesamong these countries and shipped by them to the USSR.
Some apparent specializationfor example, the production of electro-optical Instruments in East Geraany and the production ofequipment in Czechoslovakiarepresented the natural development of lines of products for which particular countries have traditionallyood reputation in the export market.
Another cause for de facto (as distinguished from CEMft-imposed) specialization among the Eastern European countries is found in the influence of the USSR, because of whose patronage and with whose technical assistance economic production of certain electronic goods became possible for some of these countries- For example,nowominant position among them in the production of low-capacity microwave carrier equipmentesult Of having produced thesix-channel carrier equipment in large quantities on Soviet
order for several years. The production capacity that was built in responseecure Soviet market gave Czechoslovakia an advantage over the other Eastern European countries in developing this particular product for intra-Bloc sale as veil as for the growing market in less developed countries. Thus the USSR unilaterally induced an international division of labor among Its former satellites through its importance in their export markets.
As the requirements for new forms of electronic products areat an increasing pace in the Bloc and as the resources of the individual countries are strained ln an effort toodem line of product, these countries are finding It in their individual interests to share the cost of developing and bringing into production the new, advanced components which their industries must have. In East Germany, for example, the plan for providng the electronics industry with recently devised components of advanced design provides forfrom other Bloc countries those components that are only needed in quantities too meager to justify the cost of domestic development and production. The need toariety of communications equipment for modern national and international communications nets exceeds the research and development resources of any single Eastern European country. ertain amount of international sharing, by deliberate arrangement, of development and production tasks in thi6 field is reflected in the disproportionately rapid growth in exports ofequipment (overvhelmingly intra-Bloc in nature) compared with export growth in other categories of electronics, as shown in Table 6.
IV. Trendsntra-Bloc Trade
Associated with these changes in the electrOnicG industries in the Eastern European countries were changes in the direction of electronics trade. The share of total imports from each other has been growing In size while the shares obtained from the USSR and from non-Bloc countries have been shrinking. Moreover, the Soviet share of the total electronic exports of the former satellites has been increasing (from aboutercent9 to about U5 percent. In particular categories of electronicshat is,instruments and communications gearthese countries marketed more than one-half of their exports in the USSR. The USSR also purchased more than One-third of thcexported by the Eastern European countries during this period. Although the estimated value of Soviet imports ofequipment from these countries amounted to lessercent of the total domestic Soviet production of such equipment (both military andhese imports, which werenonmilitary,ignificant portion of the supply Of electronic equipment available to Soviet industry and consumers., estimated Soviet imports of civil communications equipment and industrial and consumer-grude electron tubes from
these countries equaledoercent of total estimated Soviet production, and imports of instruments from them equaled nearlyercent of the annual Soviet production of industrial instruments and control equipment.
V- Trends ln Trade Between the Bloc and Hon-Bloc Countries
The Bloc imports both ordinary and specialised electronic equipment from non-Bloc countries. 2 and thereafter, generally successful efforts were made to reduce its dependence on non-Bloc sources. An absolute reduction of the aggregate amount imported from these sources was madend, although Imports from these countries began to rice again thereafter, they comprised on ever-diminishing share of total Bloc imports (see As shown in Table2 and probably thereafter all categories of electronic goods (exceptimported from non-Bloc countriesoticeable In the whole, instruments comprised about one-half of the electronics imported by the Bloc from non-Bloc countries, only East Germany having reduced such imports Ihe Bloc (and particularly the Eastern European countries) continued to remain dependent on countries of the Free World for those advanced forms of electronic instruments which were widely available from commercial sources in industrialized Western countries but which were frequently available in the Bloc only from special laboratory production. among such goods are oscilloscopes and other meters for checking radio frequency circuits and automatic data processing equipment (both computers and peripheral associated input-output equipment).
The quality of electronic goods produced in the Bloc and available for export is variable and seldom embodies the most recentin the Free World technology. The export prices of Soviet Bloc electronic goods are based on prices In Free World markets, and in negotiating trade agreements with one another the Bloc countries quote Free World prices. In selling to the Free World the Blochave been hampered by difficulties in providing service-after-sale and have had to accept lower prices than Free World sellers, even for goods of equal value.
It is likely that Bloc electronics offered for export in the foreseeable future will continue to be generally inferior to similar Free World products in quality and in the provision of service-after-sale and that Bloc imports from non-Bloc countries will, continue to exceed exports to that area.
US t
SELECTED SOVIET^BLOC COUNTRIES x
3 EXPORTSONMILITARY I^ELECTRONIQ EQUIPMENT COMPARED WITHfO'KAtLvELECTRONIG EQUIPMENT'
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kethodoiogy
1- General
The methods employed In the analysis of Soviet Bloc foreign trade in electronics vere dictated by tho nature of the available data. It was not possible toomplete trade pattern for the Bloc and to show, in matrix form, the amounts imported by each recipient country from each exporting country. The most intensive analysis of the data resulted in an estimate by year of the total amounts of electronic equipment (by major category) that vere exported or imported by each Bloc country. The determination of the direction of trade wasto the division of trade into that moving in intra-Bloc trade and that exchanged with non-Bloc countries. It was seldom possible to be more specific than this with respect to country of origin of imports or of destination of exports.
2. The Data and Its Treatment
The available trade handbooks seldom give complete statistics. The division of total trade into commodity categories typically is accomplished in these handbooksanner that makes impossible tbe subsequent summing of all exports or importsarticularamely, electronics- For example, the Soviet trade handbooks Itemize exports of entertainment equipment and instruments, but exports of components and communications equipment are not listed although known to have occurred. Moreover, the reporting on instruments is imperfect for the purposes of this report because it contains both electronic and nonelectronic instruments.
Hot every Bloc countrytatistical handbook on foreign trade, and these handbooks do not appear until the expirationear or more after the lost year for which data are quoted. Advantage, where possible, was taken of the bilateral!ty of trade, in order to determine the imports and exports of nonroporting countriestudy of the exports and imports of all the reporting countries that trade with them-
Additional pieces were added to the picture from publishedstatements of the trade plans and achievements for the electronics industries of the several Bloc countries- These statements sometimes gave export figures as shares of total domestic output, making the accuracy of the export estimate dependent on the accuracy of oestimate.
Although the best estimates are those based on openly published statistics, intelligence reports provided fragmentary but useful data in some instances- This fragmentary information served principally to weight the interpolations and extrapolations that had to be made for those years for which data from published sources were incomplete.
3- Exchange Rates
All values in this report are expressed in US dollars. Where Bloc trade data have been taken from official statistical handbooks, their value has been converted to US dollars by the application of theofficial exchange rate (crown/dollar, zloty/dollar, and the like) The procedure is valid because the statistical compilations of Bloc countries present data on trade with non-Bloc countries in values that reflect the actual prices paid converted to domestic currency at the official exchange rate. Moreover, prices set artificially in intra-Bloc trade more or less reflect world market prices converted at official rates. Where Bloc trade estimates have been based on production data and reflect domestic prices, exchange rates have been employed that represent the ratio of domestic prices and dollar prices for Similar items of electronic equipment.
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Original document.
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