STAFF NOTES: SOVIET UNION EASTERN EUROPE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86T00608R000400090018-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 13
• Document Creation Date: December 16, 2016
• Document Release Date: July 26, 2004
• Sequence Number: 18
• Publication Date: June 20, 1975
• Content Type: REPORT

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Soviet Union
Eastern Europe
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June 20, 1975
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SOVIET UNION - EASTERN EUROPE
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CONTENTS
June 20, 1975
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Moscow and the Collapse of the
Sino-Japanese Peace Treaty. . 1
Romania Calls for More Rapid Development
of Less Developed CEMA Countries. . . . . . . . 2
Yugoslav and East Germans Confer on
European Communist Conference differences . . . 4
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USSR: Steel Imports. 9
USSR: Civil Aviation 11
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Moscow and the Collapse of the
Sino-Japanese Pepe 't'reaty-
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The collapse of Sino-Japanese negotiations on
a peace treaty apparently caught the Soviets by
surprise. Oki the very day that we learned that
Sino-Japanese talks had broken down, Tass published
a strongly worded version of the protest that had
been made by Foreign Minister Gromyko to the Jap-
anese ambassador a week earlier. The Soviets ap-
parently assumed that a stiff warning was needed to
put the Japanese on fresh notice that their acqui-
escence to Chinese demands for an anti-Soviet he-
gemony clause would cause a "freeze" in Soviet-
Japanese r' .;,tions. The protest, which turned out
to be s- n;:,erfluoub, has elicited a cool Japanese
response.
While Moscow now may be concerned that its
pressure tactics will backfire on Soviet-Japanese
relations, it is undoubtedly pleased that the ne-
gotiations have stalled. The Soviets may even
believe they can take some credit for the failure,
although the Japanese, by their admission, were
willing to give Peking most of what it wanted on
the hegemony issue, and it was Chinese intransigence
that halted negotiations.
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Once passions generated by the Soviet protest
have cooled, the Soviets may see some tactical ad-
vantage in renewing proposals that Japan sign a
friendship treaty without first settling the dis-
pute over the northern territories. The Soviets'
unyielding position on the disputed islands will
be, if anything, reinforced by the impasse in
Japan-Chinese relations. Moreover, as long as its 25X1
economic relations with Japan continue to expand,
Moscow will not have much incentive to make con-
cessions on the northern territories.
June 20, 1975
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Romania' Calls for More Ra id Development
' o L'e'ss Developed' CEMA' Countries
The Romanians have publicly called for a pro-
gram to speed up development of the less industri-
alized CEMA countries. Bucharest may be prepared
to present the proposal at the CEMA summit in Budapest
next week should the Soviets, as expected, propose
tightened economic integration.
Romanian economist Nicolae Belli spelled out
the details of the Romanian proposal on June 10 in
a major party theoretical journal. Belli called for:
--Increased access by all CEMA partners to
raw materials and energy sources, and to
the latest scientific and technological
developments.
--Higher prices for agricultural products.
--Low or zero interest on credits.
--Increased production and exports of sophis-
ticated, finished products from less developed
states.
--A higher priority on factory construction in
the less industrialized states.
The Romanian proposal appears broad enough to
appeal to the national interests of other CEMA mem-
bers. All East European countries are concerned
about access to raw materials, and the Bulgarians,
in particular, have in the past complained about low
prices for agricultural goods.
Belli attacked labor migration within CEMA as
an inappropriate, capitalist practice. All the East
June 20, 1975
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European countries are sending large labor contingents
to work on the Orenburg pipeline. The Bulgarians re-
portedly have ,.'ccn unhappy about Soviet efforts to
double the size of the Bulgarian work force in the
Soviet Union.
This latest Romanian statement comes in the wake
of numerous spirited attacks in the Romanian press on
"those" who would iv,a greater authority to CEMA.
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inay be reacting to the rehabilitation o the Bulgarian
economist, V. E. Valev, who has long resided in Mos-
cow. Valev gained wide notoriety during the Khrushchev
era for his ideas on economic specialization that
would have mainly cast Romania in the permanent role of
an agrarian state. Moscow has
suggested that the Do rogea an anu a asin regions
of Romania are ideal for "economic complexes" under
"international management."
The Romanians are almost certainly exaggerating
Soviet pressure for tighter integration. This scare
tactic--used by Bucharest before--appears aimed at
generating support for the Romanian position both
in and out of CEMA. Bucharest apparently reasons
that other East Europeans will find it easier to
oppose integration by pretending to cater to Romanian
sensitivities rather than by assuming an adversary
role.
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June 20, 1975
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Yugoslavs and East Germans Confer
on Euro2ean Communist Con Terence DI 7 oronces
The East German party sent its top specialist
in foreign affairs to Belgrade this week, presumably
in an effort to reassure the Yugoslavs that the
European conference of Communist parties will not
adopt binding documents.
Hermann Axen, an East German party reprosenta_.
tive in the preliminary sessions, talked on Wednes-
day and Thursday with his Yugoslav counterpart and
with Stane DoJ.anc, Tito's second-in-command in party
affairs. Press commentary on the talks is sparse,
but the Yugoslavs seem to want more bilateral meet-
ings--a delaying tactic--and the East Germans con-
tinue to stress the need for a successful conclusion
of the conference.
Axen's first priority in Belgrade was probably
to try to con'rince the Yugoslavs that the Soviets and
their supporters in the working group drafting con-
ference documents will be reasonable in meeting Yugo-
slav objections. The Yugoslavs have complained that
the previous draft, offered by the East Germans in
April, violated Belgrade's understanding that there
would be no binding program issued at the conference
and that the views of all parties would be respected.
The East Germans withdrew their draft under pressure
in May.
June 20, 1975
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The July meeting shapes up as an important test
of the limits of Soviet flexibility in dealing with
the independent parties. Moscow will have to balance
the demands of these parties for open and equal par-
ticipation against its claim that the Soviet party
plays the leading role in the world Communist move-
ment.
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USSR: Steel Imports
The USSR became a net importer of steel last
year for the first time since 1947, purchasing over
5 million tons of steel from the West--nearly 2
million tons more than in 1973. Large purchases
last year coincided with booming steel prices and
cost the USSR nearly $1.9 billion in hard-currency
payments, about $1 billion more than in
1973.
The
principal sources of steel imports were
many, Japan, Belgium, and Italy.
West
Ger-
The turnaround in Soviet steel trade arises
from the steel shortages that have long plagued the
Soviet economy and from the increased availability
of foreign exchange. Notwithstanding its advance
to leadership in volume of world production, the
Soviet steel industry has not kept pace with domestic
demand. Investment in basic iron and steel-malting
capacity, especially in facilities to turn out the
diversified end products required by the expanding
Soviet economy, has lagged.
Domestic production is not likely to catch
up with the growing needs for Siberian development
and general industrial expansion for the rest of
the decade, and still larger imports could be
easily absorbed by the economy. Imports from the
West accounted for only about 5 percent of Soviet
consumption of finished steel in 1974. The Soviets
reportedly will import about the same amount or
perhaps more steel from the West this year. Hard
currency will be available to maintain or substan-
tially increase imports of steel from the West,
especially if steel prices weaken as expected.
Types of steel imported from the West include
a wide range of -,.:ructural steel, large-diameter
pipe for oil and gas transmission lines, tinplate,
June 20, 1975
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transformer shoot, cold-rolled sheet for the manu-
facture of automobiles and appliances, and special-
ized tubular stool for the petroleum and chemical
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industries.
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The USSR has established a new state aircraft
registry and a civil aviation flight safety com-
mission to upgrade airworthiness standards and air
transport safety procedures. Both organizations
will be part of the Ministry of Civil Aviation and
will have broad enforcement powers.
This is the first time Moscow has empowered
a single group to draft airworthiness codes. Prom-
ulgation of new codes comparable to Western stand-
ards should be beneficirl in marketing Soviet air-
craft, particularly the new 100-passenger YAK-42,
the IL-76 cargo transport, and the TU-144 super-
sonic transport.
The safety committee includes representatives
from the ministries of Aviation Industry, Radio
Industry, Civil Aviation, Defense, and Communica-
tions Equipment Industry. It has definitive re-
sponsibilities to set standards for ground service
facilities and airport security as well as improv-
ing Aeroflot's operational procedures.
June 20, 1975
T1SSR: Civil Aviation
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