Trade expansion within the Council for mutual economic assistance after the Polish and Hungarian crises

Abstract

The Council for Mutual Economic Assistance (CMEA/Comecon) was established in 1949, but active cooperation between socialist countries of Eastern Europe began only in the mid-1950s. The CMEA countries sought to expand intra-bloc trade, especially against the backdrop of the success of Western European integration. The purpose of this research is to identify and analyze the non-market trade links within the CMEA in 1956–1959 as factors for expanding integration between socialist countries. The analysis is based on the materials of the Russian State Archive of Modern History, and the Russian State Archive of Economics. In 1956, accelerated industrialization in Eastern Europe led to the emergence of crisis phenomena in most CMEA countries. The relations between states were tense. The Polish and Hungarian crises of 1956 showed the severity of the situation. The Soviet Union harshly suppressed political opponents. At the same time, Moscow tried to support the economies of the CMEA countries. One of these measures was expanding trade with them. The results of the research showed that there was nonmarket expansion of trade in the case of coal supplies to Poland and Czechoslovakia, imports of Polish coal, exports of Bulgarian tobacco. In 1957–1958, there were serious imbalances in intra-bloc trade. Normalization of trade relations was intended to be achieved through the creation of the Multilateral Clearing System. In 1958–1959, this system was ineffective. This suggests that the CMEA countries used trade relations in the period under review mainly as a political tool.