COMMENTS ON CSR/USSR TRADE RELATIONS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00457R000400220005-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 2
• Document Creation Date: November 9, 2016
• Document Release Date: March 1, 1999
• Sequence Number: 5
• Publication Date: March 27, 1947
• Content Type: IR

Approved F as~`1 9/09/08: CIA-RDP82-00457ROOt4O?b` ti0~=2,
Document No. T CONTROL
NO CHANGE in C;1 S -k OP''ICIAL8 ONLY (25X1 A
14-LLIGENCE GROUP
Auth:
Date:
1.763 IM=e GENCE RT
fly:
COUNTRY Csochosl,?aaki.a/USSR
SUBJECT
regraded to
ORIGIN
25X1X
4, r r Cc cr I37r3 t,om
yj in`e:,'gcnCe to the
A c~i.v s; c~ k ,e L r;'aad States.
DATE:
IN . As stated
Dw: 27~!CNMD
PAGES 2 25X1 A nT1AL
SUPPLEMENT
The following excerpts from a confidential report comprise the fifth is a series
of reports on CSR/USSR trade tinder the terms of the Treaty of 12 April 1846:
1~ In the text of the Treaty, the agreements in Article 3,, concerning the establishment
of prices an the basis of international trade prices at that time, or the oe peti-
tive prides offered by ether countries,, are particularly noteworthy. For practical
purpoeeso etooording to confidential information, this seemingly well-chosen stop
has not proven thoroughly satisfactory. The Czechoslovakian Industry finds an easy
market at high prices for most of the products in question - such as ma.ch#a .tsels-
due to the great deau.ud for these products by England and other countries. The
S,viots? however,, insist that all these prices be based on the lower price offer
of the United Stater,, so that the Czechealoaak firms,, despite advance sales and
great export possib-_,li.tiea based on a more favorable pound rate,, have to adhere
to the lower U.S. prices and forage the better market possibilities. Also, the
price disparity between the CSR and USSR standards presents difficulties,
2. Settlements are made acceding to Articles 6 and 7 of the Treaty: in Kos from the
special account in the Czechoslovak National Barka In case of goods whose delivery
was not originally anticipated. payment can be made in free currency - for the zest
part in Amirioan dollars - as specjele?d in Article 8,
3, Comient on the rail transportation difficulties is indicated, especially on the
limited capacity of the passageway at ffep-Muka:aeve and on, the broad-gauge Russian
trucks which necessitate reloading of goods,,
4. No arbitration omnmltteee was named in the agreement. For practical purposes. all
Czech firm claims for goods and payment are to be directed to the Deputy for Trans
with USSR and decided with the Soviet traacte representative in Prague.. In the event
that no agreement can be reaohed an prides,, the decision rests with the Czechoslovak
Ministry for Foreign Trade and the USSR trade representative In CSR.
6. In the oonfidential report fron the Office of the Deputy for Trade with USSR, lit 148.
certain criticisms were made apropos of the small quantities in w*aioh long-tern
orders arc being delivered. Source adds the following observations as footers ,,em-
tributing to the slowness of these doliveriec:
Co me on CSIkilTS Trade Relations
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a. The reluotance of Czech industry to accept new expert obligations.
bQ Pasilure to reach a solution of the problem of cheaper long-term industrial
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as A reluctance on the part of the Soviets to make these deliveries right now
while they are pn-stannably awaiting the first results of their own five-
year plan before placir large orders for 1948 anc; later,
6. The significance of economic relations with USSR is cnnphes-I:zed by tho Czech
Government or the i ollowing reasons:
a. The economic plan of both countries ms.l e;r pos*si'blo long;..term ugreenonts and
stable conditions for the industry of Czechoslovakia without the previous
price fluctuations and dependence on world markea;;r, In Czech industrial
oiroleso however, and prtrtioularl f in natiolializ5'. industry, there is s
certain arnouit of holding back in view of the exp oted f zture eel.C.s'xi4
ficienoy of Soviet industry, which would then result in the Rus::i:vns ceasing
to order such items as Parrs machinery, lrnsq, eta? Consequently, it is
believed in Czech industrial circles that the adaptation of the Czech in-
dustry to the Soviet five-year plan will proceed with caution.
b. Cz hoslovakian lrrduettf, its well as the I.-Unistry t'or i oreigzi Trr3de, wishes
notai as before for the erection and cultivation of ne great an export ro
serve! as possible for the western and exert..Uuropean couutries0 They realize
that a change in ;:he inteerntti!anal scene is .y otherwise result in insurmount-
able difficulties for then. In the CSR it In well. stablishsd that the
treader relations with US Slt, even though of more imrredia ye importance Q nsunt
be regarded ars rsbrely a part of the Czechosloval, truce relatints with other
co:uitrte s.
Co Most Czech exports consist of finished products., while JSSR exports to CSR
are largely rn : materials,,
7a The following are arunw, the critical observation n ritacle by Cvaech industrialists
and government officials on the disadvantages of trade relations with Russia to
date:
a, Czachoslovakiun firms hr,.vo no knowledge oC `f'ree l;ussinn ton'rl e4
b0 Russian terminology. Cor various products is strango,
c. 'T'here are not even brochures, illustrations or crataingues in Russian.
d0 There are repeated instances or failure on the part of the Soviets to
adhere to prescribed quantity and quality ?:.ae' goods delivered,
eo Inardequate packing of irrcorain;; flussinn goods has Ind to marry complaints,
#o !JS: fl factories , receive no instructions for the use of various special
Products ond rar,chinc tools,
Czech firms are often ignorant of the international trade prices, which
leads to miscalculrationnsa
h. Czech firms desxlin? with the ,oviet offices Torgpredstvo9 find the long
forzrs burdensome.
It is not yet possible for Czeel: firms to deal directly with Russian
factories, syndicates end individualao
8. Ctsoh firms have ham several unfortunate experiences in dealing with Russian trade
ot'gaalzations, For example, when the Bata shoo concern accepted 'Zussiao orders
Par shoes, they submitted normal specifications for Y:he leather they would need
and for the prices to be paid,, Although the leather from a>,">Fd was oP very poor
quality,, the Soviets still demanded delivery of the riurabor of shoes on inally
agreed upoti, There have been similar complaints in cotton Uransaetionse Irotwt,
however, the Czech rectories in private to greerncnts heve started to P,dd a 2O "ace
oeptance commission"& under which plan work is progressing more smoothly`,
U... OFFICIAIS ONLY
ApprovedFor Release 1999/09/08 : CIA-RDP82-00457R000400220005-2