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November 16, 2016
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January 4, 2000
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April 10, 1956
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s ~^ Approved For Release 2000/04/17 : CIA-RDP79T01049A001400~4401~-0 S-E-0-R-E.T CENTRAL INTELLIGENCE AGENCY Office of the Chief, Economic Research Office of Research and Reports Pro3act Action Memorandum Project No. 42.1080 Date: 10 April 1956 TITLE: Trends and Prospects in East-West Trade Rk UESTER: DD/I STATEMENT OF THE PROBLEM AND TERMS OF REFERENCE: : To prepare a paper to be- use briefing the President on the agave subject. Terms of Reference: 1. Terms of reference as given (see outline atta e . and Defense. RESPONSIBILITY: Action Division: D/S Braneg: S/TF 50 Consulting Branch: Princi al Ana x 3098 258X3A Project Monitor: ~~~ This project will not delay completion of currently scheduled projects. The classification of this project will be no higher than SECRET. 25X1A APPROVED - Ch/E 2. To be coordinated with D/E, State, Commerce,, Concurrence Man-hours D! Date Initials N/NF St/PR 25X1A S_E-C-R..E-T Approved For Release 2000/04/17 : CIA-RDP79TO1049A001400140001-0 Approved For Release 2000/04/17 : CIA-RDP79T01049A001400140001-0 Trends and Prospects in East-West Trade 1. East-'Vest Trade in Relation to rlorld Trade World trade was at an all-time high of nearly $92 billion in 1955 exceeding the previous peak (1954) by more than 7 percent. Trade of Free World nations with each other accounted for some 00 billion of this or more than 86 percent of the total. In contrast the trade among Bloc nations amounted to 07.8 billion or less than 9 percent of total world trade. Trade between Free World and Bloc countries was $64 billion in 1955, less than 5 ueeicent of total world trade. The major change in the distribution of world trade sit-tee 1948 has been the d x-~ fold increase in intra$Aloc trade, $1.2 billion in 1948 to $7.8 billion in 1955. This increase has derived primarily from a more, rapid increase in trade between F3].oc countries than between Free '-'arid couuntries, and, from the diversion of much of mainland China's trade to the Soviet Bloc. Although the total value of East-[Brest trade has risen by about half a billion dollars in this sane period, the proportion of East-I.-Jest trade to total trade has actually declined from 7 percent in 1948 to less than 5 percent in 19554, Approved For Release 2000/04/17 : CIA-RDP79TO1049A001400140001-0 Approved For Release 2000/04/17 : CIA-RDP79TO1049A001400140001-0 SECRET 2. Bloc Foreign Economic Policy and the Pattern of East-?West Trade. The outstanding features in the recent 'East-West trade pattern has been: a rapid expansion of trade after 1953 acco;oanied by increased trade ties with underdeveloped cauntrieS, and important shifts in the commodity composition of traded The value of East-West' trade declined from 34 billion in 1948 to $3 billion in 1953 and then rose to an estimated 44.4 billion in 1955. Since 1953, although ^restern Europe has remained the Bloc?s major trading partner, the action of the Sino-Soviet Bloc to increase trade ties with underdeveloped areas has become increasingly apparent- This trend has been evidenced both in terms of actual trade and trade overtures. The commodity composition of Bloc trade with the Free World has also changed. In the immediate postwar years the Bloc was a large net importer of capital goods (machinery and. equipment) and a large net exporter of food products. By 1954 the Soviet Bloc, including both the USSR and the European Satellites, for the first time became net importers of food products from the Free World. At the same time the value of Bloc capital goods exports ~rnrte ten-times from 1952 to 1954. The European Satellites by 1954 had become net exporters of capital goods to the Free !-.?orid, although the USSR and the Bloc as a whole: remained a net importer. 2.1 Approved For Release 2000/04/17 : CIA-RDP79TO1049A001400140001-0 Approved For Release 2000/04/17 : CIA-RDP79T01049A001400140001-0 Although the Bloc aa a whole remains a net importer of capital goods, it bad,, by 1951, became a net exporter of such cities as in hire tools, agricultural machinery, office machinery, and tx an port eauipment except ships and boats. While eoz fete commodity e . are not yet availkable for 1955, evidence suggests that the Bloc is continuing to move toward a position of a net exporter of capital goods. above- changes in the pattern of FAMt-West trade suggest th:?Ft Pace foreign eeon=ic policies are in process of adjustment to internal developwntS. i prewar years the USSR, in support of its industrialization but at pr,-o'm., exported raw materials in return for capital goods the same time strived to attain an increasing measure of independ. ence from western markets. As a result of years of high investment in heavy industry, assisted by imported capital goods, the USSR has achieved a position of industrial power second only to the United ;States, although it should be noted that the value of its industrial. prodietion is on3y about of that of the United States. the poster period, the Soviet ec, augznted by the reeources of the man Satellites has not only becom a higww deve industrial nation but has achieved a higher degree of seif.aufficieney than any other major country' in the World. 2-2 Approved For Release 2000/04/17 : CIA-RDP79TO1049A001400140001-0 Approved For Release 2000/04/17 : CIA-RDP79T01049A001400140001-0 7iie USSR's present economic advantage tends to be is the export of capital goods and the import of food and certain raw materials. The costs of manufactured goods have declined as pro- duction has expanded, as skills have !developed, and as additional capital goods have made other economies possible. During the same time, haver, the costs of food and raw materials have risen with increasing demands and the exhaustion of low-cost production opportunities. The steady transition of the USSR frm a relatively undeveloped to a highly industrialized economy, provides the economic basis for the foreign economic policy toward underdeveloped countries being evolved by the present Soviet leadership. This policy may also have the dual purpose of using the current needs and capabilities of the Soviet econmmj to promote the broader and lour range political and strategic aims of the USSR in world af'f'airs. SECRET 2.3 Approved For Release 2000/04/17 : CIA-RDP79TO1049A001400140001-0 Approved For Release 2000/04/17 : CIA-RDP79TO1049A001400140001-0 3. Free World Trade Controls a. Controls Against the USSR and European Satellites The Free World has restricted multilaterally the import of selected strategic goods into the European Bloc for almost six years; the United States for over eight years. During this period the Bloc economy continued to expand rapidly, particularly in the heavy industry sector. While controls undoubtedly had some retarding effect on the economy, nevertheless the Bloc internal supply position for many of the items on the original control lists has improved markedly. Currently Free `-brld embargo lists do not impose a significant deterent on the economic nor on the military growth potential of the European Bloc, although in a few selected sectors controls continue to have an important impact. This impact derives primarily from embargo of advanced electronic materials and equipment, selected non-ferrous and ferrous metals and alloys, and a small range of advanced equipment in other fields. While the impact may be quantitative in some sectors, the primary effect of controls is a qualitative one in restricting the transmission of advanced technology. Among the items which the Bloc relys on external sources for a large part of its requirements are copper, ships, and natural resources. 3-l Approved For Release 2000/04/17 : CIA-RDP79TO1049A001400140001-0 Approved For Release 2000/04/17 : CIA-RDP79TO1049A001400140001-0 (1) comer Even before the downgrading of copper :sire to List III in August 1954, the Bloc imported from the Free World some 20'30 percent of its total new supply. Because of the embargo most of this procure- ment was be clandestine means. Imports of copper and copper wire were in excess of 120,000 tons in both 1953 and 1954. In 1955, it is estimated that the Bloc imported approximately- 100,000 tons. Because of the downgrading of bare copper wire to List III, most of these imports consisted in 1955 of legal procurement of copper wire, Although almost no copper is produced in Western Europe, most of the shimients to the Bloc are from this area. For examnle in 1955, the United Kingdom supplied almost 40 percent of total exports, western Euronean countries accounted for another 40 percent and most of the remainder came from Japan. Although the Bloc is currently procuring a si gn.ficant part of its copper sunn7,y from the Free World, imports in 1955 decreased by as much as 20 percent from the 1954 level. If current Bloc nians for increased copper production are realized Bloc dependence on Free T?iorld supply may have lessened by 1960. 3-2 Approved For Release 2000/04/17 : CIA-RDP79TO1049A001400140001-0 Approved For Release 2000/04/17 : CIA-RDP79TO1049A001400140001-0 (2) Ships Trade controls have been effective in restricting the sale to the Soviet Bloc of certain types of vessels, such as tankers and higher speed freighters but other types of vessels, not subject to embargo have been sold in considerable quantity to the Bloc. In 1955, approx- imately 120,000 tons of new shipping was nurchased by the Bloc-from the Free 1,brld and in 1956 it is expected that at least 250,000 tons will be purchased. Since vessels of the Bloc merchant fleets are generally over age and slow, new acquisitions are of considerable importance in improving the overall characteristics of the fleets. Trade controls have been most effective in restricting the acquistion of ocean going tanker tonnage from the West and, in fact, have forced the USSR to undertake a very sizable tanker construction pro- gram in its own yards. However, there is no conclusive evidence that the tanker construction program has adversely affected the con- struction of naval combat vessels. Thus, the primary importance of the embargo has been to delay the overall modernization of the Bloc merchant fleets, to prevent the acquisition of certain strategic types of vessels, and require the expansion of Bloc merchant shipbuilding capacity. 3-3 Approved For Release 2000/04/17 : CIA-RDP79TO1049A001400140001-0 Approved For Release 2000/04/17 : CIA-RDP79TO1049A001400140001-0 {3) Natural Rubber Natural Rubber is embargoed to Communist China but can be freely imported by the European Bloc. However, Ceylon has been supplying Communist China since the beginning of 1953 with quantities of rubber more than sufficient to meet China's domestic requirements and China has re-exported significant quantities of its rubber purchases to other members of the Bloc. .the USSR purchased no rubber directly from the Free World between July 1953 and July 1955 and then resumed purchases at a rate below its estimated requirements. It is estimated that the USSR had a stockpile of 3OO OOO tons of rubber at the end of 1952, or sufficient for 3-4 years normal requirements. After 1952 the USSR apparently liquidated hart of its stockpile and in addition received part of China's rubber imports from Southeast Asia. The elimination of trade controls would probably lead to some increase in total Bloc imports, tarticularly of certain metals, ships, electronics and other complex industrial equipment. Increased Bloc purchases of such complex industrial equipment, however, would probably be concentrated in a relatively small number of categories since most of it is not included in the relatively narrow range of items now effectively embargoed by the West. SECRET 34s Approved For Release 2000/04/17 : CIA-RDP79TO1049A001400140001-0 Approved For Release 2000/04/17 : CIA-RDP79TO1049A001400140001-0 SECRET b, Controls Against Communist China Free World trade controls on Communist China being much more inclusive have a more significant economic effect on Communist China than the controls applied against the 'European Bloc. The difference in effect is due principally to the ancillary transportation controls (which increase Bloc transporttion handling and other costs), to US unilateral financial and Import controls. A relaxation of trade and ancillary controls including those of the US to the level maintained with the European Bloc would not greatly increase Communist China's access to strategic imports (most commodities are presently available through transshipment from European Bloc torts) but would permit less costly procurement and an expansion of exports. It is believed that in this way a relaxation of controls would enable an increase in Communist China's annual import capabilities by about .3125 million, of which two-thirds would be due to the relaxation of US controls. To that extent, the buildup of Communist China's economic and military potential could be accelerated, There would also be a reduction in internal Bloc transport costs amounting to approximately $100 million annually. An expansion in Communist China's imports from the Free World of :150 million, though amounting to about 8 percent of the present level 3-5 Approved For Release 2000/04/17 : CIA-RDP79TO1049A001400140001-0 Approved For Release 2000/04/17 : CIA-RDP79TO1049A001400140001-0 of Free World exports to the Soviet Bloc, would have little effect upon total Free World trade. For particular business in a few countries, however, especially Japan, this increase would be regarded as important. 3~-6 Approved For Release 2000/04/17 : CIA-RDP79TO1049A001400140001-0 Approved For Release 2000/04/17 : CIA-RDP79TO1049A001400140001-0 4. The L`u~rretat mtoc 'made Dive in U erdevelo nee world Areas M,e Sino?Soviet B3 oc is currently participating to a much greater degree than in the peat, in the international economic affairs of the Fiee Wand, especial1e the underdeveloped countries of Asia, Africa, and Latin America. 'his program in underdeveloped areas is marked by an expansion of trade, the extension of liberal ms's, cfferu of technical assistance, and wider participation in trade fairs. A1tbough the Bloc trade drive in underdeveloped areas is not limited to the extension of credits, this feature is one Of the mare important oases. It is estimated that fran Ja nu y 1954 through ?ebrueay 1956, the Bloc countries bar extended 1onggtem credits O most $900 million to non-Bloc countries. Sixty percent originated with the USSR and the remainder with the European Satellites. Ytoalavia has been the principal recipient Of the n w Bloc trade drive followed by Egypt, Afghanistan and India. Tire Bloc has also been active in other countries of the Now East as veil as Southeast Asia and Latin A=wi ca. Se bulk of this credit (65 percent) arises from tour large agreements; Yugoslavia, million; Indian steel mill, $115 million;; Af nistan, $100 million.; Egyptian arms, $l4o million. with the exception of the credit r a t on arms sbipmenU to Bgypt, these are longer term (10-30 years) credits. The remaini credit Approved For Release 2000/04/17 :1CIA-RDP79T01049AO01400140001-0 Approved For Release 2000/04/17 : CIA-RDP79T01049A001400140001-0 SECRET allocations are of smaller size (usually less than $5 Million each) and with shorter terms. Virtually all of the credit extension bear a rate of interest approxime-tely half that of normal Western c.rcial, rates. In addition to obtaining needed capital equipment with payment terms more attractive than usual in the West, the underdeveloped countries are able to repay the USSR through the barter of their exportable surpluses. Many of these surpluses do not at present bring eatiefactory prices in Free World markets. Outstanding examples are Egypt and Burma where the Bloc has arranged to take exportable surpluses of cotton and rice for Bloc eq 1 ant and for the services of Bloc technicians. a. Cow Cotton is a i 4or export of a number of countries in the Near East, Africa, South Asia, and letin America. It outranks all other trade of Egypt, Mexico, Paraguay, Peru, cowaditiee in the export Sudan, and Uganda It accounts for four-fifths of Egypt's exports and over three-fifths of the exports of Sudan and Ugaa ? Although world cons'ullption of r*W cotton has increased signify scantly in the fart five years, production has distantly been greater than the demand. By 1955 accuaulated stocks totalled almost 22 million bales, half of them held by the united States. In addition the world is preocntl.Y faced with another bumper crop SECRET Approved For Release 2000/04/17 :1e -RDP79T01049A001400140001-0 Approved For Release 2000/04/17 : CIA-RDP79TO1049A001400140001-0 and many consumer countries are holding otr large purchases in anticipation of lower prices. Thus certain of the underdeveloped countries welcome the opportunity to sell cotton to the Bloc. Currently the Bloc is virtualky self-sufficient in cotton. Nevertheless, it can purchase from the world market in consider- able volume if it so chooses. These purchases enable the USSR to exPand exports of Soviet cotton to the Free World. The Bloc has been exploiting the mounting cotton surplus problem in its trade drive in underdeveloped Free told areas. In addition to the exchange of arm for Egyptian cotton, the Bloc has shifted sow of its cotton purchases from Pakistan to India and Egypt. Since such purchases yield political gains at little or no economic cost, further Blocigulations in the Free World cotton market seem likely. b. Rice Rice, like cotton, is a major export of a number of countries, particularly in South Asia. It yields 70 to 80 percent of Burma?s exPOrt earnings and about 50 percent of 7__iland?s. Since 1953, the Asian rice situation has shifted from a condition) of relative shortage to one of oversupply. Prices have slipped sub. stantiefly from their postwar peaks and major exporters are plagued by surpluses and difficulties in finding Satisfactory export markets. 4-3 Approved For Release 2000/04/17 : CIA-RDP79TO1049A001400140001-0 Approved For Release 2000/04/17 : CIA-RDP79T01049A001400140001-0 A number of factors have contributed to this situation, including a shift to other cereals and an expansion of cereal production in traditional Asian deficit areas, for example, India and Indonesia. The burden of rice surpluses was most severe in Burma when the government marketing agencies strongly resisted the dawrd trend in rice prices.- Prior to 1955 no significant amounts of rice were imported by the Bloc. on the contrary, C__nunist China bad been exporting about 250,000 tons of rice a year to Ceylon as part of a five-year rice rubber agreement. Since 1955, however, there have been a number of rice purchases by Bl.oe countries, principally from Burma. I 19550 Com mist China,, the USSR, Czechoslovakia, Huaga y, East Cep, Poland, and Rumania all negotiated agreements for the purahs a of Burmese rice. These agreements covered from 250,000 to 300,000 tons of rice. Much of this rice was destined for North Vietnam, as part or the Bloc aid agreements. under a new 1956 agreement, the USSR has sigsned a contract to purchase from Burma 400, 000 tam of rice annually for the next four years. This represents over one-fourth of Burma?a expected rice export for the period. 4.4 Approved For Release 2000/04/17 : CIA-RDP79TO1049A001400140001-0 Approved For Release 2000/04/17 : CIA-RDP79TO1049A001400140001-0 o ? Prros is for Bloc FW3ilimeat oft edit Amts Present Bloc commitmmsts for the was of capital goods to the underdeveloped Free Wand arras amount to less than case percent of Luustrisa production. Thus it is likely that the pries c the Bloc could expend, credit and a rt pmgram with vederdevol ped countries substoutiel3y without IgW=mt to their wn economies. SECRET Approved For Release 200010447 : CIA-RDP79T01049A001400140001-0 Approved For Release 2000/04/17 : CIA-RDP79TO1049A001400140001-0 SECRET Future Bloc Prospects for Bast'-west Trade As the Bloc develops its industrial capacity fir, resulting in increased industrial. demands for basic resources and the gradual depletion of these resources, it vin become increasingly advanta. geoua for the Bloc to export capital goods and to import industrial rem. materials. In addition, as population continues to grow, it vill also becene more advantageous for the Bloc to import food products. The bulk of the exports of capital goods, hoe+ever, vill probably be Confined to the siagaer types vbich are relatively easy to manufacture. Such export, are the it= % VW .h the uad,e veloped countries have eespeciaijy desired to import, - transpor atiaa equip- Rant, prim "very, achinerY for extractive industries, and basic and standard maufacturing facilities. In addition, the Bloc is able and willing to direct the expo of technical assistance. Thus the basis exists for an expansion Of East-'hest trade particulaly bet" M the Bloc and Free World =weerdeYelaped countries. The future level of mat-West trade depends not only on eco, c considerations but also on political considerations. Nonetheless, there is reason to believe that the motivations brhi,nd Soviet trade -v including the relatively bIA-q st mineral and agricultural resource base, the desire to extend Soviet influence ,among other nations, and the rapidly expanding industrial plant -. point to an increasing trade SgCRET Sal Approved For Release 2000/04/17 : CIA-RDP79TO1049A001400140001-0 Approved For Release 2000/04/17 : CIA-RDP79TO1049A001400140001-0 between the Bloc and the Free World. It is estimated that Bloc exports to the Free World could double within, the next five years end exceed $ billion by 1960. Soviet exports to the Free world in 1960 could exceed $2 billion. Yeeam of -priority expansion in the machinery and equi.~- at sector of t rrnra r ban broa:g the UM tzi a point where it has export ; otr: z a1 for many basir t s of machine tools, industrial products, end industrial. instillations. Without regard to difficulties in ammemaing comparable quality and production, it is iaVortant to note that in 1955, Soviet production of machine tools (excluding metal !or ; equi t) exceeded that of the US in terms of units. A progr oriented toward export of such m'cbineay, bovever., would to scm extent core with the Soviet progrem of noderaisatiof and re,-*qua mt which hes been put rcrth as a part of the Sixth Pi .-,Year Man. Substantial imateasea in Soviet production of agricultural r ?hine-mss traator*D and truce planned for the period 1955 to 1960 also pride a considerable export potential. The 1960 output of agricultural machinery is to be 62 percent greater than the 1955 leore1, while the 1.960 output, of tractors is to be almost double that for i955. T3'hi1e such of this equipment is obviously ea nrked for the accelerated chani Lion of agriculture it must" also be viewed as a potential export. 5-2 Approved For Release 2000/04/17 : CIA-RDP79TO1049A001400140001-0 Approved For Release 2000/04/17 : CIA-RDP79TO1049A001400140001-0 Such equipsant is sorely needed by the letss U611-developesd and agriculfi ally-criested econcr es MA +2" USSR could probably exploit this requirement for politicall, as well. as econcE is advantage. E aropean Satellite ex ports to the Free World might also exceed $2 billion in 1960. The primary export potential of the European, Satellites lies in an expansion of exports of industrial products. Indeed because their own natural resources, with the exception of Polish eoal, Runian oil, and l riei- bauxite, are not sufficient to supply their own current needs, the sueeeesful fulfillment Of their plans for industria develop wnt depends an an a xpaasion of such . In the post the USSR has provided the bulk of Satellite food and raw materiel. irOport requirements, but it is likely that the share of these imparts from the UM Will deallne in the future. The USSR can retard the inexorable rise in its own raw material costs by encouraging its Satellites to seek other *our*" of supply. In the pattern of Sino-Soviet Bloc trade with the Free World, C st (hint will play C ay a secondary role for tote next five year=. Chitin, fared with the problems of developing its own ew=M'-O structure, Viii not be in a position to make large direct contributions to Bll.oc exports to the Free World. l ewers a large share of the Chinese export potential., primarily rear materials and foods will be directed to the MW in return for industrial products. SEC1 Approved For Release 2000/04/17 : CIA-RDP79TO1049A001400140001-0 5-3 Approved For Release 2000/04/17 : CIA-RDP79TO1049A001400140001-0 of the three major areas within the Sino.Soviet Bloc tho European Sateilite3 face the sat pressing agricultural problem. Tn food production the Satellites are deficient and vill require, by 1950, about 1.5 million tons of wheat aim ally in order to main- tain their present living standards. Tn the past the USSR has ?svided their food imports, but during the next five years the USSR, even barring unfavorable weather, will only be able to increase i1trig standards slightly at Ixm . In nearly all instances th :.irate 31tes can obtain the needed food pnsduet$ fri vuagrdevele]d arms, who will aim provide a market for their r chinex7 industries. For ray 7m t .a L. the European Satellites are also the moire, hard- pressed of any area in the Sino 8o:,riet Bloc. The USSR hers been upp: ying them v tb. considerable quantities of raw msat -"~ -s but r Soviet demestic demand has risen there has been evidence of reluctance to chip to the Satellites. In iron ore the Satellites m1st import more than two-thirds of fir requirements, much of which bes been supplied by the rest a the Bloc. Me Satellites will r equi. about 10 million ton of Iran we imports by 1960. E a't a a a)Ay's requix nt3 for ode oil will, be doubled: one million r= sins are now being obtained f r a Austria. Satellite #2atu ?al rubber -eq ir, w namely double is the next five years. All of the viafiei1ites have twade agmements with underdeveloped countries 54 Approved For Release 2000/04/17 : CIA-RDP79TO1049A001400140001-0 Approved For Release 2000/04/17 : CIA-RDP79TO1049A001400140001-0 oi~ zzr, rubber ship?ra ra . the European SattUAilzs, even at cur t o tp te; levels, are also deficient in new-ferrous metal s and other minerals end will have increasing d ds for ir4=ts of c er, bauxite,, rutile (for titanium). bast, cola mbiuan, tantalum, ; u , sul ur, mica, and industrial die zonds. In nearly all cases, . oir h and Sow; e t Asia has the ca sility for exporting tbase catelsials. The UDR bas less a problem of deficiency in raw mat earials wsh ~ a p .?obl awi of high s iw-rea sing costs. In coat, petroleum p eadtm'Ls, and timber the U t is relatively well-situate., but in fersi u metals, as well as Haas- `pus metals, costs of additional supplies have risen in recent yew. MWW of the ores are very lean and e:r action costs bigh. Since the U has no natural s: b , her requirements of nearly 200,000 to= in 1960 mast b itxpox cd. The USSR will also continue to be an increasingly large il: .rke~ for wool and possibly cotton. .e Si s-Soviet Moe will continue to have high demands tar IInc`n"-ry nazi equipa nt from the Ffte World. In the past use have o .,iced nearly half of total imports and while this pementa s decline ao ;sat, they will ,probably continue to be the major import. It i 1ikel., that Bloc orders in the Free World will c rp'tr iae the ec capital equip s t, prototypes, and products which if prodvved internally would interfere with military i oritieaa, such a2 ? rcba nt hips and equipment of relatively low priority dax Ctieelr. Approved For Release 2000/ t : CIA-RDP79TO1049A001400140001-0 5-5 Approved For Release 2000/04/17 : CIA-RDP79TO1049A001400140001-0 6. It can be seen fkan the above discussion that both the direction of Fozt.-Weet trade and its char dity composition should change between nor and 1960. ports will become increasingly weighted in favor of manufactures and capital goods as food and rw materials decline in relative itance. The share of food and raw materials in imports will probably increase aignificantly. Many of the InVorts which the Bloc will need aunt came Increasingly from Asia, the Near Eat, Africa, and even Latin America, where the capital and manufactured goods which the Bloc is increasingly prepared to export cyan be absorbed. Consequently, it is likely that during the next five years the proportion of imports originating, frwa and e rta shipped to the relatively underdeveloped nations of ABIa, the Near East, Africa, and Latin America will increase. 6?1 Approved For Release 2000/04/17 : CIA-RDP79TO1049A001400140001-0