No. 30, Gábor Oblath (1995): Eastern Europe’s trade performance on western markets and Eastern Europe as a market for western exports: a review of developments between 1990 and 1993

In this study a statistical review of the “progressive” side of Eastern Europe’s trade reorientation is presented for the period 1990-1993, from a reverse perspective, i.e. based on statistics of the OECD countries. On analysing Eastern Europe’s trade with the West since 1990 – which, for most of these countries, was the first year of the break with central planning – two distinct issues are addressed. On the one hand, we intend to discuss changes in the relative importance of the East European region, both as a supplier and a market of the OECD countries. On the other hand, an attempt will be made to clarify, how the relative position of individual Eastern European countries, in comparison with others, changed in their western trade during the period under review.Beside the general questions, a specific issue, namely the importance of (and changes in) trade in investment goods between the OECD countries and Eastern Europe is also addressed in this review. In particular, we wish to clarify, whether or not the role of investment goods in Eastern European imports from the West increased during the transition period. It appears logical to expect that in the early stages of the transition, chiefly involving tasks related to stabilisation, both the increase in investment goods imports, and their share in total imports, should be moderate, but later on, their proportion should increase in order to support the sustained growth of these economies. If this expectation is not borne out by actual developments, it should be useful to consider their reasons and possible implications. Thus, the scope of this study is rather limited. We intend to identify some characteristics of the shifts that have taken place in East-West trade (in particular, trade in manufactures) since the start of the transition in Eastern Europe, and clarify, how the relative position of individual Eastern European countries changed from the perspective of OECD countries. Several aspects of these questions have been addressed in former studies; many of the related issues have already been covered in previous volumes of the UN ECE Economic Survey of Europe and Economic Bulletin for Europe. The major contribution of this review is related to the fact that is covers four years since the start of Eastern Europe’s economic transformation; the year 1993, when some important changes in former trends appear to have occurred, is also included. It should, however, be clear that this study does not aim to be comprehensive. Moreover, it is mainly descriptive and tends to raise, rather than answer questions. Further work is necessary to clarify the macro- and the microeconomic factors underlying the developments in East-West trade since 1990. In the first section, the growth of East Europe’s exports to the OECD region is discussed in the context of OECD countries’ import growth from all non-OECD countries, and the evolution of the markets share of the EE5, as well as that of individual East European countries is treated. Next, the growth of OECD exports to Eastern Europe, the relative importance of these exports for west is discussed and developments in the two sides of this trade (OECD exports to, and imports from, the EE5) are compared. In the third section, a subset of this trade, western investment goods exports to, and imports from, Eastern Europe is reviewed. Finally, some tentative conclusions are drawn.

Project leader:
Gábor Oblath