Mutually Advantageous Cooperation

by Nikolai Patoichev, Minister of Foreign Trade of the USSR
from PRAVDA

In accordance with the principles of peaceful coexistence, the Soviet Union continues to develop mutually advantageous trade relations with states willing to do so, and establishes longstanding economic ties on the basis of industrial and scientific and technical cooperation.

The socialist states, accounting for about two-thirds of the entire USSR foreign trade volume, play the major role in the Soviet Union's commercial relations with other countries. Trade vith the developing countries of Asia, Africa and Latin America is growing from year to year. A vivid example is furnished by an agreement on further developing economic and trade cooperation between the USSR and India, signed in November 1973 as a result of Leonid Brezhnev's visit to that country

The attraction of trading with the Soviet Union, which has a powerful and constantly expanding economic potential and the important place the socialist countries hold in world production force capitalist states to reckon with the real state of affairs and to gradually lift imposed trade restrictions. At the same time it should be borne in mind that the pro cess of "liberalising" trade is far from complete and in a number of cases old forms of discrimination are replaced by new ones.

The advanced capitalist countries of Western Europe are important trade partners of the Soviet Union. More than 16 per cent of the USSR foreign trade and about 70 per cent of trade turnover with all industrially developed capitalist countries fall on these states. Trade with them is characterised by high growth rates, exceeding those of the USSR's entire foreign trade. This testifies to the increasing role or the Soviet Union in the international division of labour

In recent years the USSR's foreign economic relations with West European countries have entered a new phase. Typical of this is the transfer to comprehensive and prolonged mutually advantageous cooperation on the basis of long-term agreements on economic, technical and industrial cooperation, as well as in the sphere of economic ties between individual Soviet organisations and foreign firms. Thus, such agreements for a term of 10 years have been concluded with Finland, France, Austria and the Federal Republic of Germany Talks are underway on signing such agreements with Italy, Britain and Belgium.

We are aware that the development of trade and other forms of cooperation with the Soviet Union is welcomed in government and business circles of West European countries. Yet, there arc opponents of international detente and the development of economic relations with the Soviet Union.

From time to time voices are heard in the West asserting that the Soviet Union gains a one-sided advantage from the development of these ties, that the Russians "are pumping out advanced Western technology", etc. Some try to make the development of these ties dependent on absurd poli tical demands they advance.

The insolvency of such an approach is self-evident, for businessmen conclude export and import deals only when these deals interest them commercially, are advantageous or necessary for them.

Mutual benefit is a main principle ot the business activity of all Soviet foreign-trade corporations. In developing economic ties with Western Europe our country obtains an opportunity to more fully and rationally utilize its recources and potential and at the same time to acquire goods produced by other countries, which are not manufactured in our country or which are more expensive to produce than to import.

Western countries produce insufficient amounts or simply lack many kinds of raw materials, semi-processed goods and fuel, which are traditionally exported by the Soviet Union. Among them are non-ferrous metals, plywood, coal, oil and oil products, gas, asbestos, cotton, various consumer goods.

In their turn. West European countries supply us with large quantities of such products as fine steel sheet, certain types of non-ferrous metals and chemicals, woollen yarn, artificial fibres, etc.

Trade in machines and equipment occupies a place of importance in the Soviet Union's commercial relations with Vest European countries. For a number of years the Soviet Union has been a big purchaser of West European machines and equipment for the chemical and wood-working industries, for automobile plants, for the building materials industry and for the food and light industries.
At the same time, the successes scored by the Soviet engineering industry made it possible to considerably enlarge exports of machines, equipment and various appliances to West European countries. The Soviet Union exports metal-cutting lathes, bearings, excavators, tractors, cars and lorries, airplanes, ships, etc

Various appliances and household utensils are also exported: clocks and watches, photographic and cine equipment, radio and TV sets.

A swift development of science and technology in the Soviet Union enabled it to start, in the 60's, the export of licences to West European countries for the right to manufacture industrial goods and employ the latest technological processes developed in our country. Licences were sold for the production of a turbodrill, installations for continuous steel pouring, lightweight aggregate concrete, a sys tern of evaporative cooling of metallurgical furnaces, etc.

Agreements with West European firms or joint development of natural resources in the USSR and creating industrial enterprises in our country on a compensatory basis is a comparatively new form of foreign economic relations.

Under such agreements the Soviet side is granted foreign credits to buy equipment, materials and necessary licences, these credits will be repaid later by deliveries of the goods produced by the newly created industrial projects.

Cooperation on this basis allows us to speed up the exploitation of natural resources and the creation of new production capacities. The interest of our partners in such cooperation is explained by the tact that, on the one hand, they receive large Soviet orders for various machines and equipment they produce, and on the other, receive, on a long-term basis, Soviet goods and raw materials they need.

In recent years a number of agreements have been signed with state agencies and firms in Austria, Italy, the Federal Republic of Germany, France and Finland on deliveries to these countries of Soviet natural gas over the next 20 to 30 years. Simultaneously agreement has been reached on Soviet purchases of large-diameter pipes, fixtures, machines and equipment for the gas industry, on credit, repaying them with gas deliveries.

French firms will supply equipment for the Ust-Ilim wood working and cellulose combine in Siberia in the period of 1975-76, which will be paid for by cellulose deliveries.

An agreement has been concluded with the leading Italian chemical concern, Montecatini-Edison, on coopera Hon, on a compensatory basis, in the building of seven large chemical combines in the USSR and on the deliveries to Italy of some products to be turned out by these enterprises. This agreement will cover 10 to 12 years, with a volume of mutual de liveries exceeding 500 million roubles.

Another agreement has been signed with Finnish firms on cooperation, in the construction of an ore-dressing combine in the Karelian Autonomous Republic on the basis of the Kostomuksha iron-ore deposit. The Soviet side also cooperates with Finnish firms in the building of wood-working and cellulose plants in the USSR.

Talks are underway with big firms in the Federal Republic of Germany about the construction in the USSR of a metallurgical plant using the method of direct reduction of iron, on the basis of the Kursk iron-ore deposit. This is going to be the biggest deal yet with the Federal Republic of Germany, also in accordance with the compensatory principle. Deals of this kind have also been concluded with Japan and the United States.

Long-term commercial and economic ties build up trust, create a sound economic basis for stabilising and developing political relations between European countries and exert a favourable influence on the international political climate. It is not accidental therefore that the questions of East-West economic cooperation took pride of place on the agenda of the European conference on security and cooperation.

The Soviet people are profoundly convinced that further normalisation of the situation and consolidation of mutually advantageous cooperation in all fields between European countries will become more effective and all- embracing.

Sputnik. №5 May 1974