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Romania Trading Partners
Before World War II, the West accounted for more than
80
percent of Romania's foreign trade. During the postwar
period up to
1959, however, nearly 90 percent of its trade involved
Comecon
nations. The Soviet Union was by far the most important
trading
partner during this period. But the PCR's insistence on
autarkic
development led Romania into direct confrontation with the
rest of
the Soviet bloc. In the late 1950s and early 1960s, Soviet
leader
Nikita Khrushchev had envisioned an international division
of labor
in Comecon that would have relegated Romania to the role
of
supplier of foodstuffs and raw materials for the more
industrially
developed members, such as the German Democratic Republic
(East
Germany) and Czechoslovakia. In April 1964, however,
General
Secretary Gheorghe Gheorghiu-Dej threatened to take
Romania out of
Comecon unless that organization recognized the right of
each
member to pursue its own course of economic development.
As early as the 1950s, Gheorghiu-Dej had begun to
cultivate
economic relations with the West, which by 1964 accounted
for
nearly 40 percent of Romania's imports and almost
one-third of its
exports. When Ceausescu came to power in 1965, the West
was
supplying almost half of the machinery and technology
needed to
build a modern industrial base. In 1971 Romania joined the
General
Agreement on Tariffs and Trade
(GATT--see Glossary)
and the
following year it won admission to the IMF and the World
Bank. In
1975 Romania gained most-favored-nation trading status
from the
United States.
Between 1973 and 1977, Romania continued to increase
its trade
with the noncommunist world and initiated economic
relations with
the less-developed countries. In 1973 about 47.3 percent
of its
foreign trade involved the capitalist developed nations,
with which
it incurred a large trade deficit that necessitated heavy
borrowing
from Western banks. During this period, major obligations
to the
IMF (US$159.1 million) and the World Bank (US$1,502.8
million) were
incurred.
To gain greater access to nonsocialist markets, Romania
set up
numerous joint trading companies. By 1977 twenty-one such
ventures
were in operation, including sixteen in Western Europe,
three in
Asia, and one each in North America and Africa. Romania
held at
least 50 percent of the start-up capital in these
companies, which
promoted its manufactured goods and agricultural products
abroad.
In 1980 Romania became the first Comecon nation to reach
an
agreement with the European Economic Community (EEC), with
which it
established a joint commission for trade and other
matters.
During the 1980s, however, trade relations with the
West
soured. Ceausescu blamed the IMF and "unjustifiably high"
interest
rates charged by Western banks for his country's economic
plight.
For its part, the West charged Romania with unfair trade
practices,
resistance to needed economic reform, and human rights
abuses. In
1988 the United States suspended most-favored-nation
status, and
the following year, the EEC declined to negotiate a new
trade
agreement with Romania. Meanwhile, attempts to increase
trade with
the less-developed countries had also met with
disappointment.
After peaking in 1981 at nearly 29 percent of total
foreign trade,
relations with these countries deteriorated, largely
because the
Iran-Iraq War had cut off delivery of crude oil from Iran.
Frustrated by the downturn in trade with the West and
the lessdeveloped countries, Romania reluctantly returned to the
Soviet
fold during the 1980s. By 1986 socialist countries
accounted for 53
percent of its foreign trade. But the Ceausescu regime
continued
to assert its independence, refusing to endorse the
Comecon program
that would allow enterprises to circumvent routine
bureaucratic
channels and establish direct business relationships with
enterprises in other member countries. And he refused to
cooperate
in Comecon attempts to establish mutual convertibility of
the
currencies of the member states (see
table 6, Appendix).
Data as of July 1989
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