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Hungary Trade Partners
Hungary's foreign trade was about evenly split between
the
Comecon countries and the West. Trade with the Comecon
market
accounted for 53.1 percent of its trade turnover in 1986,
an
increase from 49.3 percent in 1980. Total trade turnover
with the
Comecon countries, measured at 1986 prices, increased from
about
US$6.8 billion in 1981 to US$10 billion in 1986. Exports
to the
Comecon countries increased from US$3.6 billion to US$5.1
billion
in the same period, while its imports from those countries
rose
from US$3.3 billion to US$4.9 billion.
In 1986 more than 90 percent of the country's energy
imports,
42.5 percent of its raw- and basic-materials imports, and
more
than 60 percent of its capital-goods imports came from the
Comecon countries. In addition, 48 percent of exports of
raw-materials and semifinished goods, 84.3 percent of its
machinery and capital-goods exports, and more than half of
the
exports of industrial consumer goods and agricultural
products
went to the Comecon market.
In the late 1980s, the Soviet Union, plus three other
Comecon
countries--the German Democratic Republic (East Germany),
Czechoslovakia, and Poland--made up four of Hungary's six
most
important trading partners. The Soviet Union was Hungary's
main
trading partner, accounting for more than 30 percent of
Hungary's
overall trade and 60 percent of its trade with the Comecon
countries (see
table 13, Appendix). Raw materials and
energy
dominated the structure of Soviet-Hungarian trade. Under
the
Soviet-Hungarian trade agreement for the Seventh Five-Year
Plan
(1986-90), Hungary agreed to export foodstuffs, computers,
telecommunications equipment, buses, and other finished
goods to
the Soviet Union. In turn, Hungary imported mining
equipment,
heavy machinery, some consumer goods, and even larger
amounts of
Soviet raw materials and energy than it did in the
preceding
plan. East Germany, Hungary's third largest trading
partner,
Czechoslovakia, and Poland accounted for about 16.5
percent of
Hungary's overall trade and 31.1 percent of its trade with
the
Comecon countries ,
About half of Hungary's trade was with Western
countries.
Trade turnover with the Western world was US$7.9 billion
in 1986;
imports totaled US$4.2 billion, and exports amounted to
US$3.7
billion.
In June 1988, Hungary and the European Economic
Community
(EEC) signed a ten-year trade agreement, the first of its
kind
between the EEC and a Comecon country. The agreement
provided for
a reduction of quotas on about 2,000 items by 1995.
Hungarian
officials estimated that the trade would boost Hungary's
hard-currency exports from US$25 million to US$50 million
by
1995. In 1987 the EEC countries accounted for 24.4 percent
of
Hungary's imports and 19.9 percent of its exports. Hungary
accumulated a US$5 billion trade deficit with the EEC
countries
between 1979 and 1986.
West Germany was Hungary's largest Western trading
partner
and second largest trading partner overall. Raw materials
and
semifinished goods made up about 65 percent of the US$1.2
billion
of goods that Hungary imported from West Germany in 1986;
machinery and equipment made up about another 20 percent.
Hungary's exports to West Germany totaled US$771 million
and
included foodstuffs, live animals, machinery, chemical
products,
textiles, clothing, pharmaceuticals, and aluminum
products. As of
1987, West German banks had furnished Hungary with more
than
US$16 billion in loans; in the same year, the West German
government guaranteed a twelve-year credit for Hungary,
marking
the first time that the Hungarian government has accepted
credits
backed by a foreign government. In addition, Hungary and
West
Germany concluded an investment protection agreement in
1986
under which the Bonn government, based on Hungarian
assurances,
guaranteed that West German firms with investments in
Hungary
would be able to repatriate their profits and not be
subject to
nationalization of their assets. In 1987 West German firms
had
about 330 cooperation agreements with Hungarian firms;
more than
half were in engineering and machine industries. Siemens,
Krupp,
Telefunken, Volkswagen, and smaller West German firms were
involved in about thirty joint ventures with Hungarian
enterprises
(see Relations with the West
, ch. 4).
Austria was Hungary's second largest Western trading
partner.
In 1987 Hungary imported Austrian goods worth US$574
million and
exported US$594 million in goods to Austria. In 1987
Austrian and
Hungarian firms were engaged in 120 cooperation agreements
and
fourteen joint ventures.
Hungary and the United States signed their first trade
agreement in 1978, and Hungarian goods bound for American
ports
enjoyed most-favored-nation status. In 1988 ten United
States-Hungarian joint ventures operated in Hungary, but,
excluding Citibank Budapest's holdings, the total of
United
States capital invested in Hungary stood at a mere US$58
million.
In 1987 bilateral United States-Hungarian trade reached
its
highest mark ever at more than US$500 million. Exports to
the
United States, however, accounted for only 2.3 percent of
Hungary's exports in 1986, and imports barely exceeded 2
percent
of Hungary's total imports.
Trade relations with Japan were growing as Hungary
sought
Japanese capital and technology and hoped to gain a share
of the
Japanese market as that country opened its doors to
foreign
trade. Hungary imported US$142 million worth of Japanese
goods in
1986 while exporting only US$42.4 million in goods. Basic
materials and semifinished goods accounted for more than
half of
Hungary's Japanese imports; machinery and consumer goods
accounted for 27 percent and 19 percent, respectively.
More than
65 percent of Hungary's exports to Japan were basic
materials and
semifinished products, including pharmaceuticals,
aluminum, and
chemical products; foodstuffs accounted for another 16
percent.
In addition, Hungary and Japan formed their first joint
venture
in 1984 to produce polyethylene sheets for insulation.
Hungary's trade with developing countries totaled about
US$1.4 billion in 1986 and represented a 7.3 percent share
of its
total trade, down from 9.5 percent in 1980. Exports to the
developing world consisted of machinery, vehicles,
industrial
consumer goods, and agricultural goods. Hungary imported
from the
developing countries tropical foods and other agricultural
products, petroleum oil, clothing, carpets, electrical
appliances, and steel products. In 1985 Hungary joined the
International Finance Corporation and the International
Development Association, both of which are World Bank
affiliates.
Finally, trade with China rose dramatically from about
US$112.7 million in 1984 to US$343.9 million in 1986.
However,
China accounted for less than 2 percent of Hungary's trade
in
1986.
Data as of September 1989
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