TRADE BETWEEN EAST AND WEST GERMANY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-01617A000900130001-7
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 1
• Document Creation Date: December 27, 2016
• Document Release Date: May 30, 2013
• Sequence Number: 1
• Publication Date: March 28, 1950
• Content Type: MEMO

Declassified and Approved For Release 2013/05/30 : CIA-RDP78-01617A000900130001-7
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CENTRAL INTELLIGENCE AGENCY
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74
INTELLIGENCE MEMORANDUM NO. 282 28 March 1950
SUBJECT: Trade Between East and West Germany
Commercial and industrial tradibetween West and East Germany
continues to increase outside the interzonal trade agreement despite
efforts by the occupation authorities to enforce the export control
program. Federal au orities in West Germany display little desire
to cooperate in halting this extra -legal trade, which is already
larger than that legally authorized, and border controls are In-
adequate. Meanwhile, West German industrialists apparently believe
not only that extensive trade relations can be developed with the Soviet
orbit, including China, but that West Germany cannot exist without
? this trade. (Actually, West Germany's prewar trade with the East
only amounted to approximately 15 percent of its betel foreign trade.)
This West German belief is presently being fed by such factors as;
(1] resentment over stricter application of lA and 1B controls to
West Germany than to other ECA nations; (2) the non-competitive
nature of the Eastern markets compared with those in the West; (3) the
greater availability of certain foods and raw materials in the East; ,
and (4) the hope that East and West Germany will some day be
reunited.
If East-West German trade continues to escape strict official
scrutiny and control, the US will lose the ability to cut off shipments
to the German Democratic Republic, at present an important US
bargaining weapon In negotiations with the USSR on e security of
Berlin and access to the city. Other effects of this illegal trade will
be to: (1) contribute to the fulfillment of the East German Two-Year
Plan and to the war potential of the Soviet orbit generally; (2) accelerate
fee attainment by East Germany of economic independence of the
West by Western exports of much-needed capital goods; (3) improve
gradually the living standards of the East Germans, who will then be
less tnclin9d to resist the Communist regime; (4) divert capital goods
that could be used in the West; and (5) provide propaganda material '
for German unification to the National Front in East German and to
isltra-nationalists in West Germe.ny, many of whom favor establishing
a modus vivendi with the USSR. Obi
Document No.
Note: This memorandum has not been coordirta as4illiRmee
organizations of the Departments el S