Source: Export Control. U.S. Department of Commerce. 67th Quarterly Report, May 1964, p. 50.

The change in the level of exports from the Cocom countries to Eastern Europe over the last 15 years is shown in table VI: TABLE VI.-Exports of Cocom countries to Eastern Europe

1. Overall trend of the exchange, 1958-63

During the most recent 5-year period, for which data are available, trade between East and West has risen steadily. Exports and imports have shared equally in the upward trend, as shown by the following series of overall annual trade values:

TABLE VII.-Free world trade with the Sino-Soviet bloc

Source: The Battle Act Report 1964. P. 62 and unpublished Department of Commerce data on EastWest trade.

During this period trade with the bloc was expanding faster than world trade as a whole. The value of world trade of non-Communist countries increased by only 30 percent; compared with a better than 50 percent gain for their trade with the Communist world.

2. The geographic distribution of East-West trade

The free world, for statistical purposes, is generally divided into: (a) Cocom countries and (b) all other countries.

(a) Cocom countries

At present the Cocom countries account for some 50 percent of all trade between the free world and the Sino-Soviet bloc. In 1963

Cocom countries supplied 53.4 percent of all the exports moving from the outside world to the Communist areas while absorbing 54.3 percent of all bloc exports. In 1963 the 12 European Cocom countries accounted for $2.1 billion out of $2.8 billion in total exports from Cocom nations to the bloc and they imported $2.5 billion out of a total of $2.9 billion. Non-European Cocom countries are the United States, Canada, and Japan.

(b) Other countries

Outside of the Cocom membership, the free world nations are grouped by regions whose trade is shown below.

TABLE VIII.-Free world trade with the Sino-Soviet bloc, 1963

3. The commodity composition of East-West trade

(a) Commodities exported by the East

The principal exports of the Communist countries are mineral fuels, crude materials, and foodstuffs as shown in table IX. They also supply sizable quantities of manufactures of the simpler varieties. As mineral fuels, the West imports from the bloc coal, petroleum, and residual fuel oils. In 1962, this category totaled $864 million, 16 percent of the value of all imports from Communist countries. The U.S.S.R. supplied most of the petroleum, and the satellites were the principal source of coal and coke. Wood and pulp accounted for nearly half the exports of crude materials. Other leading items were: furskins, soybeans, cotton, wool, bristles, and feathers. The Soviet Union was the principal supplier of wood, furskins, and cotton. China was the major source of soybeans and bristles. Altogether crude materials accounted for 15 percent, or $823 million, of all free world imports from the bloc.

The most prominent food items imported from the bloc in 1962 were live animals and meat, sugar, wheat, eggs, corn, rice, fodder, tobacco, fruits, and vegetables. Here, the U.S.S.R. was a major supplier of wheat and fodder, and the satellites provided most of the meat, eggs, sugar, fruits, and vegetables. Foodstuff imports totaled $980 million, 18 percent of all bloc imports.

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TABLE IX.-Broad commodity groups in East-West trade
[Millions of dollars]

Source: Based on unpublished U.S. Department of Commerce data on East-West trade.

The finished products received from the East fell under these major headings: textile products ($260 million); steel-mill products ($317 million); nonferrous metals ($60 million); chemicals ($236 million); machinery ($361 million); and transport equipment ($95 million).

In these categories, China made its main showing in textiles, silver, and tin.

It is interesting to note that bloc exports of machinery have been rising steadily in recent years, from $206 million in 1959 to $361 million in 1962. But only 6 percent of Soviet and 9 percent of the satellite exports to the free world consisted of machinery.

(b) Commodities exported by the West

Table X presents the major components of free world exports to the Sino-Soviet bloc.

Source: Based on unpublished U.S. Dept. of Commerce data on East-West trade.

4,967

5, 171

783

894

46

98

324

323

49

61

68

85

80

99

45

53

1,227

1,141

90

94

Food has been a major item of free world exports to Communist countries in recent years. In 1962, foodstuffs amounted to $894 million, or 17 percent of all exports to the bloc, compared with 11 percent in 1958. Wheat accounted for $323 million, with China as the principal buyer.

The annual flow of crude materials from the free world to the bloc was $1.1 billion in 1962, 22 percent of total exports. Among these were crude rubber, cotton, wool, hides, and skins, synthetic fibers, and iron ore. Russia was the largest buyer of natural rubber, while the satellites took the bulk of the cotton, wool, and iron ore.

Exports of manufactured goods totaled $1.143 billion including $566 million in steel products; $205 million of copper and other metals; and $146 million in textile products.

From 1958 through 1962, the Sino-Soviet bloc doubled imports of machinery from the West, from $411 to $851 million. The U.S.S.R. and the satellites bought almost equal amounts of machinery with only a negligible amount being sold to Red China in 1962. Western Europe was the source of practically all of the machinery and trans

port equipment shipped in recent years to the Soviet bloc. In 1961 and 1962, the shipment of goods in these two categories was as follows:

TABLE XI.-Exports of machinery and transport equipment from Western European countries to Eastern Europe, 1961 to 1962

Machinery accounts for more than 30 percent of all West European exports to Eastern Europe, with West Germany, the United Kingdom, and France as the three leading suppliers.

In the category of transport equipment, ships were the biggest item with exports to Russia of $143 million in 1962, compared with an average of $80 million during 1958-62. The largest Western suppliers of ships during this period were Finland and West Germany.

II. STRATEGIC IMPLICATIONS OF EAST-WEST TRADE

A. WHAT IS "STRATEGIC"?

Differentiating between strategic and nonstrategic goods is a hazardous undertaking, for there are many variables to take into account. For example, in its practical application to problems of East-West trade, the term usually refers to "military" and "militarysupporting" items. Whereas military goods may be defined simply as those required or used in military operations, the concept of military supporting goods is far more complex. It runs afoul of such extreme cases as Khrushchev's reference to buttons on soldiers' trousers. While the notion of buttons being covered by the term strategic may strike one as an absurdity, there can be little question that rocket propellants and explosive warheads are prime examples of strategic goods.

Obviously, the concept of what is strategic is a broad one indeed, but it is a dynamic one too, for it evolves with new development in science and technology no less than it evolves with changing concepts of warfare and survival. These ephemeral characteristics have bedeviled the administrators of programs purporting to control exports of strategic goods, and particularly in negotiations with allies