PUBLICATION OF THE POLISH MINISTRY OF FOREIGN TRADE: INFORMATION BULLETIN, ISSUE NO. 12

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80T00246A047100150001-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 77
• Document Creation Date: December 22, 2016
• Document Release Date: May 10, 2010
• Sequence Number: 1
• Publication Date: February 27, 1958
• Content Type: REPORT

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Euglleh tranrlatior of a puhlice?ion artttled Information Bt.1etin issue Mc.
12, put out by the Polish Ministry of Foreign
2. The contents of the document ar tek a from Page 1 of the B?.iiet_n are as foli3 25X1
Usport of Miristar of Foreign i'de W. Trsapc?yneki on "The Foreign :lade Plan.
for 1958 in the Liar. of Fulfillment for the First Fire Months, and Export and
Deport Tasks for the Remainder of the Yew*
Discussion
Qsssats of Deputy Ministers and Departmental Directors of the Ministry of Foreign
Trsde
Qsatssnts end Discussion ty Chiefs of Missions
2. 2raiuation of the Recession in Capitalist Oomtriea
II. t ort
A. Capitalist Countries
B. Boatelist Countries
EL?. Import
IV. General Pr+cp a
V. P ospects or r 'apb
Ooorerenee Bwenation
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INFORMATION BULLETIN OF THE MINISTRY OF
FOREIGN TRADE
for chiefs of Polish trade missions abroad
Warsaw, 26 July 1958 No 12
REPORT OF MINISTER OF FOREIGN TRADE W. TRAMPCZYNSKI
ON "THE FOREIGN TRADE PLAN FOR 1958 IN THE LIGHT OF
FULFILLMENT FOR THE, FIRST FIVE MONTHS, AND EXPORT
AND IMPORT TASKS FOR THE REMAINDER OF THE YEAR"
COI NZS OF DEPUTY MINISTERS AND DEPARTMENTAL
DIRECTORS OF THE MINISTRY OF FOREIGN TRADE
COIII'IS AND DISCUSSION BY CHIEFS OF MISSIONS
1. EVALUATION OF THE RECESSION IN CAPITALIST COUNTRIES
II. EXPORT
A. CAPITALIST COUNTRIES
B. SOCIALIST COUNTRIES
III. IMPORT
IV. GENERAL PROBLEMS
V. PROSPECTS OF OUR TRADE
CONFERENCE SUMMATION
Edited by a board.
Published by the Press and Information Section of the Ministry of Foreign Trade
Warsaw, ulica Wiejska 10, Room 21, telephone 2103, extension 373
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FROM THE EDITORS
In accord with the announcement in the previous issue of the
Information Bulletin, this issue is exclusively dedicated to the
conference of chiefs of foreign trade missions which took place on
23 and 24 June 1958. This number of the Information Bulletin
includes the following:
1. Report of Minister of Foreign Trade W. Trampczyneki on
the subject, "The Foreign Trade Plan for 1958 in View of Fulfillment
for the First Five Months, and Export and Import Tasks for the
3emainder of the Current Year." This address was given on the first
day of the conference.
2. Cements and discussion by members of the management of the
Ministry of'Foreign Trade and departmental directors supplementing
the report of the Minister..
3. Comments and conclusions reached during the discussion by
chiefs of foreign trade missions.
The information and recommendations addressed to the foreign trade
missions which was included. in the previous issue of the Bulletin should
also be considered as part of the total reporting on the conference,
although this was not included in the report nor was it definitively
discussed during the conference. The above-mentioned information and
recommendations were made by interested organizational units of the
Ministry.
The information included in this and the previous issue of the
Bulletin will enable readers who did not take part in the conference
to fully orient themselves with the problems discussed.
E CFT
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At the same time, participants in the conference will receive an
organized and systematized compilation.of the essential problems
discussed at the two-day conference.
On 23 and 24 June the Ministry of Foreign Trade in Warsaw was the
scene of a conference of chiefs of its European foreign trade missions.
In addition, the chiefs of the following non-European missions were
invited to attend the conference: Canada, Turkey, Egypt and China.
The basic subject of the conference was the fulfillment of the Foreign
Trade Plan for the first five months of 1958, and the export and import
tasks remaining during the current year. The basic report on the above
subject was delivered by Minister of Foreign Trade Professor-Doctor
W. Trampczynski. It was the job of the chiefs of the trade missions
during the discussions to explain the market situation in the countries
in which they were stationed, with special emphasis on export and import
problems.
The comments and recommendations on the part of the individual
interested organizational units of the Ministry were reported in
previous issues of the Information Bulletin. This type of
presentation of recommendations and conclusions was dictated by the
necessity of leaving more time for discussion and for concentrating
attention on the.basic subject of the conference by the participants.
This eliminated separate reports from each department.
Members of the Ministry management and departmental directors also
took part in the discussions on the report of the Minister, and their
comments constituted a supplement to the basic report. Because of the
nature of these comments they are organized thematically in the sections
devoted to discussion.
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REPORT OF MINISTER OF FOREIGN TRADE W. TRAMPCZYNSKI ON THE
FOREIGN TRADE PLAN FOR 1958 IN THE LIGHT OF FULFILLMENT
DURING THE FIRST FIVE MONTHS, AND
EXPORT AND IMPORT TASKS FOR THE REMAINDER OF THE YEAR
Tasks for 1958 (the National Economic Plan and Decree No 74/58 of the
XE M (Economic Committee of the Council of Ministers) of 27 December 1958]
In discussing the Foreign Trade situation on the basis of the still
tentative results for the period January-May, I consider it worthy to
recall the tenets of the National Economic Plan for 1958 in the foreign
trade sector. I would also like to present the evolution of the plan
as a result of the development of a different world market situation
than that existing at the end of last year, that is at the time that the
National Economic Plan was prepared for the current year. A supplement
to the plan was formerly expressed in Decree No 74/58 of the KERM of
27 March 1958, concerning supplementary means for improving the payments
situation in foreign trade for 1958.
The National Economic Plan imposed a difficult task on the Ministry
of Foreign Trade. Imports, which increased 22 percent in 1957 over 1956,
or to 5 billion foreign exchange zlotys from 4.1 billion, were slated
to remain at not much lower a level during the current year, or at more
than 4.7 billion foreign exchange-zlotys. Exports however, which last
year (in current prices) shoved no increase over 1956 and therefore
remained static for two years and even fell in comparative prices, were
slated by the National Economic Plan for 1958 to increase only slightly,
from 3.9 billion zlotys in 1957 to 4 billion foreign exchange zlotys in
1958.
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Although it is true that in the plan for the current year the
unfavorable trade balance is decreased to 680,000,000 zlotys as
compared to more than 1.1 billion zlotys in 1957, or less by
420,000,000 zlotys, this deficit nevertheless is a difficult problem
in our payments balance and effects the flexibility of our import and
export policy. We must remember that the more than one billion zloty
deficit in our foreign trade balance in 1957 was covered 100 percent
by increasing our obligations abroad, wherein our short term credit
obligations abroad doubled last year to a total of 212.6 million
foreign exchange zlotys, which constitutes more or less the total
am,unt of our quarterly receipts from our free currency exports.
Therefore, we began 1958 with such greater obligations in our payments
balance than we had in the beginning of 1957. The fact that the above
increase in our debts equalled our trade deficit, confirms the fact
that the balance of our non-commodity trade does not influence our
payments situation. There cannot be any [net] income from services
in our trade with socialist countries and where we had a credit balance
at the and of the year, when (at the same time] in our trade with the
capitalist countries we have payments on long and short term credits
to be made and where we have a debit balance in services. Therefore,
the formation of the trade balance is of decisive significance to our
payments balance, especially the volume of exports which can limit
possibilities of import. Aside from the large deficits in our trade
balance not by the plan, additional difficulties also appeared stemming
from the unfavorable development of the competitive situation in goods
exported by Poland, primarily in coal, zinc, rolled goods, sugar, butter,
bacon, hams, woolen fabrics, and a number of other commodities. The
prices for these commodities dropped significantly, and moreover
difficulties were encountered in selling the planned quantities on the
capitalist market. This particularly applies to coal, where customers
have ban hesitating in accepting even amounts they have contracted for.
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I will return to this essential problem in my discussion of the
fulfillment of the basic sections of the plan during the five-month
period.
Although it is true that there has also been a certain decrease
in prices of certain import commodities such as rubber, wool, and flax,
there has also been an increase in commodities such as cotton and fate.
In our reanalysis of the.basic sections of the plan in March of this
year, we said that we were losing several tens of millions of zlotys
as a result of unfavorable price changes. These losses could not be
covered by the price reserve which was established (in the plan] in the
amount of 58 million foreign exchange zlotys. At the same time a portion
of investment imports which was included in the National Economic Plan
as conditional imports totalling 100 million foreign exchange zlotys,
and which were tied to additional credits in capitalist countries, was
incorporated into the actual plan. This was necessary both because of
earlier contracting, and because it was impossible to defer these
investment deliveries (inspite of the higher quotas on investment imports
set in the 1958 plan as compared with 195T). In addition to the unfavorable
price situation and the increased investment imports, our worsened
situation was also caused by the necessity of making changes in the
geographic distribution of the commodities. At the time that the 1958
plan was prepared we did not yet knov the results of trade negotiations
'with socialist countries. As a result of the negotiations it became
necessary to make changes in commodity lists, and in addition a number
of.cosimodities either were eliminated or else were obtained in quantities
smaller than those provided for In the plan. Among others this applies
to cotton, copper, hides, rolled goods, and fats. These changes resulted
in an unfavorable payments balance with capitalist countries exceeding
80 million foreign exchange zlotys.
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It is also true-that as a result of agreements for 1958 with the
socialist countries we obtained greater quantities of some commodities
than planned. For instance, we obtained 400,000 tone of grain from
the USSR instead of 300,000 tone, as well as manganese ores, zinc
concentrates, flax, petroleum products, etc., for a total value
exceeding 50 million foreign exchange zlotys. These increases however
do not help to improve the trading balance with capitalist countries,
since we purchase the grain on credit and the additional quantities of
raw materials in the current year may only be designated for increasing
reserves, and foreign exchange expenditures can only be decreased in
the coming year.
At the same time there were other circumstances which also affected
the payments situation. These include the 98 million dollar long-term
loan from the United States, which was not provided for in the plan,
and the carry-over to the current year of a significant portion of the
consumer goods credits (mainly French and Austrian) obtained last year.
Our expenditures for services were also affected by the lower cargo
rates, although we all realize that these same low cargo rates have resulted
in less income from coal exports.
All of these circumstances meant that the Ministry of Foreign Trade
had to propose a decree of the KERM to obtain an amendment to the plan
to enable us to obtain financial means to improve the payments situation
in foreign trade. The decree was adopted on 27 March 1958 and provided
for the,following changes in foreign trade tasks for 1958. Imports were
increased by 146 million foreign exchange zlotys, figured in plan prices.
This increase mainly consisted of including the conditional investment
imports in the obligatory limit; actually therefore, imports only increased
by.48 million zlotys. Export was increased by 144 million foreign exchange
slotys.by designating additional (amounts of) commodities for export to
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capitalist countries, mostly consumer commodities (lard, butter, sugar,
casein, livestock, potatoes), chemicals (nitrogen fertilizer., carbide,
toluene, carbonelectrodes, etc.), building materials, wood products,
paper products, and four trawlers. Therefore, the revised plan for
1958 looks as follows, in plan prices:
Million Foreign Exchange Zlotys
1958
1957
National
After
1957
%
%
Fulfill-
ment
Economic
Plan _
changes
by KERM
equals
100
Share
1957
Share
1958
Investment imports
1,189.8
1,245.6
1,389.3
116.8
23.8
34.9
Current imports
3,816.2
3,455.6
-3,458.0
90.6
76.2
65.1
Total imports
5,006.0
4,701.2
4,847.3
96.8
loo
100
Investment exports
780.6*
1,031.5
1,034.5
132.6
19.8
24.8
Current exports
3,119.9
2,991.7
3,132.9
100.4
80.2
75.2
Total exports
3,899.9
4,023.2
4,167.4
106.8
100
100
Total turnover
8,905.9
8,724
9,082.4
102.0
*excluding Korea
The characteristics of the foreign trade plan for 1958 as compared with
1957, and the basic problems which we have to solve during the plan period
may be said to be as follows:
In imports:
a. we must supply [import] machinery, equipment, and other investment
goods to an amount 200 million foreign exchange zlotys greater than in
1957. The main problem here is to obtain significant imports from
capitalistic countries, which in view of our payments situation means
that we will encounter significant difficulties.
b. We must realize very significant imports of raw materials and
other materials for production, more or less on the same level as 1957,
but in a number of articles greater quantities. The situation is not
improwed by the significant decrease in planned imports of grain as
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compared to 1957, since we purchase this commodity on long-term credits.
c. Scheduled imports of consumer commodities for this year are
somewhat lover and easier to fulfill, since the domestic market shows
an overall balance of supply and demand and does not require such
significant deliveries as were required last year, when during the first
half of the year supplying the market with goods was the primary plan
target in our trade operations.
Figured in plan prices, total current. imports this year are to be
358 million foreign exchange zlotys lower than in 1957?
Exports:
a. We are to export machinery, industrial equipment, and
transportation equipment worth 250 million zlotys more than the amount
exported last year. Exports of investment goods alone should exceed
one billion foreign exchange zloty, of which at least 17 percent should
be to capitalist countries.
b. We are to export 9 million tons of coal to capitalist countries
as against 6.2 million tons last year. We are all aware of what this
means in the present situation on the coal market.
c. We are to increase exports of agricultural and consumer goods
by about 50 percent in value, mainly butter, meat, and sugar. This is
also very difficult because of the tendency in Western European countries
to limit imports of these goods and also because of the fall in prices.
The above are the basic commodity tasks for the current year facing
our Ministry. Moreover, we are obligated during the current year to
cut in half our obligations in short-term credits as compared to the
situation as of 1 January 1957.
Since our conference is taking place toward the end of the half-year
we Mill do not have concrete figures, but relying on the results of the
ft".1 oath period we can obtain a near accurate picture of fulfillment
of Ilia plan tasks for the first half of the year. On the basis of these
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results and the development of the market situation in the world we can
orient ourselves with the problems facing us in the second half of the
year, and in connection with this we can get an idea of expected
fulfillment of the plan for 1958.
If we examine expected fulfillment for the first 6 months of the
increased plan tasks (according to the decree of the I{ERM of 27 March 1958),
we note that both in export as well as in import percentage fulfillment
.of the plan is lagging. Fulfillment of imports is 47.5 percent of the
annual plan, and of exports only 41.7 percent of the annual plan. It
is also characteristic that imports have been better fulfilled with
capitalist countries (54.6 percent) then with socialist countries (42.8
percent). This is especially true with regard to non-investment imports,
where percentage fulfillment is 57 percent in the capitalist countries,
and 44.2 percent with regard to the socialist countries. Fulfillment
of investment import goals stands at about 40 percent for both areas.
In exports however, the situation is reversed. Both investment
and current exports have been better fulfilled with socialist countries.
There is no great difference in fulfillment of goals for export of-
machinery and equipment, however, in current exports the percentage fulfillment
of exports stands at 50.4 percent for the socialist area and 39.5 percent for
the capitalist area. It is disturbing that the fulfillment of total investment
exports for the first six months of 1958 is barely 35.6 percent of the annual
plan. Of course the above figures are influenced to a certain degree by
changes in the realization price as compared with plan price, but the
above percentages on fulfillment of our import and export goals would not
undergo any basic changes even if we adjusted the prices. Therefore,
without fear of committing any serious error we may conclude that the
realisation of plan tasks is proceeding too slowly and irregularly as
regards geographic areas, which worsens our payments situation and makes
the fulfillment of tasks during the second half of the year more difficult.
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The following table better illustrates the comparison between the
planned trade balance and expected fulfillment for the first six months
of 1958:
Total Socialist Capitalist
-680 [mil- countries countries
lion zloty] -832 -152
Expected fulfillment
during first half:
Total -565 -324 -241
Remaining for
-second half: -115 -508 -393
The above figures clearly indicate that although we have utilized
barely 40 percent of the planned debit commodity balance in turnover
with socialist countries, in trade with the capitalist area instead of
ending up with a trade credit we have ended up with a significant trade
deficit. In the second half of the year the situation with regard to
commodity deliveries must be reversed if we are to fulfill the plan.
The above picture of fulfillment of the plan for the first half of
1958 proves that neither the departments nor the trade missions are
coordinating imports and exports made by the central foreign trade
offices,, and that they are proceeding according to lines of least
resistance and are attempting to buy and sell on the easiest market
and not where the payment situation requires such purchases and sales.
To the extent that reestablishment of (the system] issuing of import and
export licenses by the Ministry of Foreign Trade should be an instrument
in the bands of branch departments to assure the required coordination
of imports and exports in particular directions - the task of trade
missions is also one of carefully noting the realization of the (planned)
propertiens between imports and exports. This is the.first task I would
like to emphasise at today's conference.
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l,?i ~r~w.~
There doubtlessly exist a number of other known and previously
cited reasons which have contributed to such a fulfillment of the
plan for the first half of the year. I Will not however, stop to
discuss them now, since I shall proceed to the basic part of this
report, namely to a discussion of the situation which faces us in the
second half of the year, to a presentation of expected fulfillment of
the annual tasks.
The estimate prepared by the planning department, after consulting
With the central foreign trade offices and based on existing contract
quotas with socialist countries (including contracts concluded and
anticipated for seasonal commodities), indicates that the overall
annual goal in import Will be exceeded by about 4 percent and will not
be fulfilled in exports by at least 3 percent. Import of investment
goods from socialist countries however, will not be fulfilled by at
least 6 percent. The reason for this is that the central foreign trade
offices have refrained from concluding contracts under pressure from
domestic customers, Who demand deliveries from capitalistic countries
especially free currency areas. Another reason is the extension of
delivery dates.
In view of contracts and delivery possibilities, fulfillment of
investment imports from capitalist countries may be estimated at
100 percent, but considering our payment capacity we must figure that
realization Will not exceed 80 percent of the annual task. The limits
assigned the central foreign trade offices for investment imports are
too meager, Which result in delayed contracting and therefore makes planned
realization of purchases impossible; for the investors this creates
uncertainty as to delivery dates and actual delivery of goods. This
significant threat to the fulfillment of investment imports from capitalist
countries is one of the main problems Which should be solved in the second
half of the year, and we must openly state that even in the event that
payment means are found for the deliveries the goods 'will not arrive on
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time. This will result in unavoidable delays in investment projects and
difficulties in exploitation.
In non-investment imports it appears even now that there will be
a significant over-fulfillment of the annual tasks (by about 7 percent).
This is the result of higher quotas which have been set in agreements
with socialist countries stemming from carry-overs from deliveries of
raw materials for light industry from last year, as well as grain
deliveries and cotton deliveries from the US greater than those which
had been planned.
The estimated nonfulfillment of export goals stems from an expected
nonrealization of tasks in export to capitalist countries, for these
tasks will only be fulfilled 90 percent, while exports to socialist
countries will be over-fulfilled by 3.5 percent.
In spite of increased overall goals, the targets for export of
investment goods'will be exceeded by 7 percent, as a result of greater-than-
planned deliveries to capitalist countries. Inspite of this favorable
overall result, a number,of targets in machinery and transportation
equipment exports will not be fulfilled. This applies to machine tools,
railway rolling stock, agricultural machinery, passenger automobiles,
and other goods. The nonfulfillment of export targets for certain goods
is also the result of delayed deliveries of machinery and equipment imports.
In the sphere of current exports it appears that overall annual
goals will be fulfilled at 9$ percent, 106 percent for the socialist
countries and 90 percent for capitalist countries. This stems both from
the decrease in prices as compared to the prices in the plan, as well as
from difficulties in obtaining certain commodities such as alcohol, soda,
zinc, and sugar for export. It is also the result of additional large
sales an the socialist market of agricultural and food products (butter
and seat) received in above-plan quantities. From a geographic standpoint
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the above estimate also conceals one unknown quantity, namely there is
no certainty as to whether or not a part of the commodity stocks worth
several tens of millions of foreign exchange zlotys still remaining at
the disposal of the central foreign trade offices will be sold on the
capitalist market, and whether or not it will improve our payments
situation.
Among the major items I refer to here are about 800,000 tons of coal,
about 7,000 tons of meat and livestock, and about 10,000 tons of butter.
The quantities mentioned above may be significantly increased in view of
consistent exceeding of production and purchasing plans. Sale of these
casnodities on a planned market is.one of the basic tasks for the second
half of the year.
From what I have said it appears that the realization of tasks will
vary considerably from plans because of: a) the unfavorable development
of eampetitive conditions and a fall in prices greater in export than in
imports b) a partial shift in commodity trade from one geographic
direction to another; c) and a lack of proper coordination of operations
among the central foreign trading offices in imports and exports.
There will be a 220 million foreign exchange zloty increase in our
unfavorable trade balance, and the trade balance with capitalist countries
will worsen by 420 million zlotys in comparison with the plan. On the
other hand, it appears that the planned unfavorable trade balance with
socialist countries will not be achieved. This is partially explained
by our obtaining the second portion of the long-term loan from the US
totalling about 390,000,000 rubles. A significant portion of this loan
.will increase our commodity reserves and lessen imports in 1959, but will
not improve our payments balance in the current year.
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Means to Improve The Trade Balance and to Ensure Fillment of The Annual
Tasks
Of course the picture presented above of expected commodity turnover
cannot be accepted, and it is our fob to find means and methods to change
the development of our exports and imports in order to assure a better
payments situation during the second half of the year, and to better
fulfill the tasks in foreign trade.
There are a number of such means. Utilization of these means will
require significant efforts on the part of the entire foreign trade
apparatus, that is, by the central foreign trade offices as well as by
departmwnts and foreign trade missions. It will also require close
coordination,of work among the various organizational units and strict
adherence to financial discipline. This means primarily that goods must
be bought and sold on planned markets in accord with assigned foreign
exchange limits and established quotas. The foregoing is the general
guide from which a number of more detailed directives, orders, and
recommendations stem.
Revisions in the structure of Polish foreign trade require the
introduction of significant changes in the work of our foreign trade
apparatus in socialist countries. The significant increase in our exports
of investment goods during the current year, especially to industrialized
countries such as Czechoslovakia, the USSR, and the (}DR, confirms a
further greater potential for sales of investment goods to these countries,
in spite of the fact that heretofore this did not seen possible in many
cases. Further strenuous endeavors would undoubtedly disclose further
possibilities of this type.
In caonection with the import of machinery and equipment, certain
toirigf trade offices are purchasing too may investment goods from
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capitalist countries, while at the same time the same or similiar machines
and equipment can be purchased in countries of our camp. This is a very
damaging phenomenon from the point of view of our interests, since on
the one hand this results in payment difficulties in clearings with
capitalists countries while on the other hand credits accumulate in our
turnover with socialist countries. In purchasing investment goods, both
the central foreign trade offices as well as the trade counselors should
first investigate all possibilities of purchasing the required machinery
in the socialist countries. In the event that our socialist contacts do
not at a given moment possess the necessary assortment of goods, we must
at the same time urge them to establish such production in order to satisfy
our import needs in the future.
Both in import and export of machinery and equipment, we must in
the future place greater emphasises on the problem of earlier contracting.
In export, earlier contracting will assure proper utilization of the
production capacity of our industry and will enable a more systematic
fulfillment of the orders of our customers. In import on the other hand,
this will enable us to find and to purchase more attractive types of
machinery and equipment. This in turn will eliminate cases of sudden
and necessary purchases from capitalist countries, while the production
.of our socialist partners is being sold to other customers. This pertains
not only to contracts for this year's quota agreements but especially
to quotas anticipated in the multi-year agreements, that is for the
years 1959-1960 and later.
In addition to machinery and equipment, contracting for other goods
(non-investment) is not proceeding properly. In trade with a number of
countries there still remain very significant goods quotas which have
not yet been contracted for. Among others, import: contracts have not
yet been concluded with the Soviet Union for flax, chrome ore, zinc
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concentrates, tires and tubes, lumber, and consumer goods. With the GDR
and Czechoslovakia the same is true for various machines and equipment,
and with China for a number of important raw materials (iron ore and
wolfram, tin, silver, and others). With Rumania the above applies to
cement, and with Bulgaria to zinc concentrates, lead, pyrite concentrates,
and iron ores. With Vietnam, contracts have not been concluded for
aommodities other than rice and sesame seed.
In export, contracts have not yet been concluded for sugar for
the Soviet Union, salt and calcium soda for Czechoslovakia, and spare
parts for automobiles, tractors and engines, a 10,000 dead-weight-ton
vessel, and sheet steel for China. We have also not yet concluded
contracts for W2-400 engines and butter for Rumania. We have not
concluded agreements with Bulgaria for coke and metallurgical products.
These delays must be looked into as soon as possible and the contracts
must be signed. Moreover, in trade with socialist countries we have
observed a phenomenon of not contracting for further quantities of those
goods where existing contracts cover current requirements, inspite of
the fact that the quota agreements provide for larger quantities. We
should also note the fact that each year significant difficulties
develop in deliveries of goods for the first quarter, and we should
therefore endeavor through further contracts for these commodities to
'--ensure continuity of deliveries for the first quarter of 1959. The same
applies to export commodities.
The past character of our foreign trade with socialist countries
indicates that there still exist significant possibilities for
increasing this trade, which is evidenced by the numerous protocols
and supplementary agreements concluded in recent years. In the current
year pssibilities of this type have been clearly evident in the case
of aseehoslovakias, Yugoslavia, Rungary and the GDR. We have recently
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received a proposal from China which indicates possibilities of expanding
our trade by at least one-third the present volume. There also exist
possibilities of sales to China of sheet, pipe, and other rolled goods
at free currency. Likewise, the matter of expanding trade with the
Soviet Union is also being worked on and doubtlessly will bring significant
results. With regard to other countries there also exist significant
possibilities for increasing bilaterial goods quotas, which subject requires
extensive detailed study.
In examining these specific possibilities of increasing trade, in
every individual case we must consider the structural changes taking pleas
in Polish foreign trade. The impossibility of further significant increases
in traditional Polish export items (coal, coke, zinc and its derivatives,
and other raw materials) means that we cannot increase trade by offering
these goods. In their place we must stress investment goods produced by
us. It is of course such more difficult to sell machinery and equipment
than raw materials. Finding markets for these goods requires significant
effort. Nevertheless possibilities are great, the more so since, in
contrast to raw materials, these possibilities have not been sufficiently
studied. We should note that in this connection we have had much success,
and the conference of ca?ertial counselors a year ago, which was
exclusively devoted to the subject of sales of machinery, yielded results.
Our work and efforts in this field must be increased.
Besides the export of machinery and equipment we should also emphasise
export of agricultural products, in connection with the steadily improving
situation of our agriculture and therefore increasing export surpluses.
This particularly applies to the export of commodities such as butter,
meat, and fruit and vegetables. Increasing our exports in this line will
also create.significant possibilities for expanding trade with socialist
teantries. To a certain degree this is tied in with our attempts to
increase trade with neighboring countries, which attempts have already
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yielded certain results. However, our export possibilities in fresh
fruit and vegetables, etc., are significantly greater than existing
trade indicates. Proper efforts in this problem will doubtlessly
yield further important increases in trade with our neighboring
countries.
We must also not forget a field which has been continuously
neglected -- it is possible to significantly develop so-called small
exports. It appears to me that in this field the work of our trade
missions can be of great service.
The trade missions in the capitalist countries, mainly European,
must also develop maximum activity to aid us in locating purchasers on
this market for uncontracted goods such as coal, butter, meat, and
other agricultural commodities, where we expect our (export) capacity
during the second half of the year to significantly increase.
During the recent period coal exports to Europe have encountered
serious difficulties. The long-term coal contracts concluded between
importers and American exporters, the slower tempo of industrial production,
the relatively mild winter, the existence of large stocks of coal as a
result of previous feverish purchases, all these have resulted in a lower
demand for our coal, which in the past has constituted a significant
percent of our export to a number of western European countries. This
has resulted in additional payments difficulties in our trade with
these countries. This situation may be improved by a change in the
existing coal sales policy. The creation of "Weglokoks" agencies, the
reorganisation of the agency apparatus, the change in the price of our
coal to a competitive price level, and the establishment of the coal
council in "Veglokoks" to properly organise export deliveries, doubtlessly
should Improve the coal export situation.
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In connection with the establishment of the Common Market, our
exports of agricultural and food commodities are beginning to encounter
increasing restrictions in the form of higher tariffs and import quotas,
especially in the German Federal Republic and the Benelux countries.
An expression of this is the recently published total quotas for
socialist countries for certain import commodities by Benelux countries.
In connection with export difficulties simultaneously increasing
imports, our short-term and long-term obligations to these countries
are increasing. The acceptance of credits is not always tied in with
assured possibilities of their payment. This creates a situation where
an ever increasing percentage of the income from our exports must be
used for settling rather rigid payment obligations. It appears that we
should state that acceptance of further credits from these countries
trust be utilized for simultaneous creation of additional sales possibilities
for our export. The present discussions on placing large investment
contracts with large concerns in the German Federal Republic, Sweden,
Frances and other countries, must be used to obtain concessions for our
exports.
The recession in capitalist countries is clearly reflected in the
situation on the world market. It has resulted in a significant decrease
in the price of raw materials, while the prices of machinery and equipment,
inspite of the decrease in the number of orders,, has been falling more
slowly and insignificantly. This situation must be utilized to increase
our trade with economically under-developed countries., in order to
.radically increase exports of machinery and equipment in exchange for
weeded raw materials.
A basic problem for the second half of the year is how to most
'rapidly utilise the American loan for planned purchases since it appears
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that there is a danger that as a result of inadequate organizational
efficiency this credit may not be fully utilized by the end of the
year, and would therefore not play its proper role in the balance of
payments. This is a task which faces the trade mission in Washington
and the entire domestic foreign trade apparatus. The above-mentioned
directives and tasks rather pertain to the fulfillment of this year's
tasks in foreign trade. We must however, also think of the future
and prepare the ground for the realization of further trade operations
in future years. I have in mind here primarily four problems. The
first problem is the preparation of data,, materials,, and an atmosphere
for the expansion of long-range agreements with socialist countries
for the period 1959-1960, and for the conclusion of agreements for the
following five-year plan, 1961-1965. In accord with the understandings
reached during visits of our party-government delegations in Moscow,,
Budapest,, Bucharest, Sofia,, and Prague, these agreements are to be
signed at the end of this year and next year. These agreements,
besides setting mutual goods quotas., should also resolve a basic problem
of the socialist countries, namely regulation of the principle of extensive
economic cooperation and specialization in production. This will in turn
result in possibilities for increased goods exchange.
The second problem concerns our coal exports to capitalist countries.
It appears necessary to conclude multi-year contracts for the delivery
of this continuing basic commodity in our export, a commodity of decisive
import to the volume of our trade with European countries,, of decisive
importance to our import and payment possibilities.
The third problem is that of increasing our efforts in locating
markets, especially in the western countries, for agricultural and food
sa^sodities and the so-called small and numerous export assortments.
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uLLiyf .l
The fourth problem is that of preparing the ground for exports of
machinery, which show a very low level of contracting in capitalist
countries for the year 1959, with the exception of vessels and complete
industrial objects (where goals for the coming year have already been
completely covered by orders).
To fulfill the goals set for future years of increased exports of
machinery it is necessary to expand our work in the sales of investment
goods. Appropriate organizational changes and a policy of economic
incentives for central foreign trade offices and production plants is
already under discussion. However, the trade missions also have an
important role in ensuring exports of machinery and equipment in future
years. They should:
1. Provide an accurate analysis of the situation on a given
market for the purpose of establishing a proper trade policy.
2. Transmit accurate trade information serving to acquaint us
with the market situation, the competitive situation, elimination of
unnecessary agency firms.
3. Transmit the opinions of foreign customers concerning our
exports of technical equipment as compared with similiar equipment
produced by capitalist countries and socialist countries; they should
also provide information on technical matters such as introduction of
new production technology and use of plastics, to enable us to continuously
modernize our export production.
4. Zzchange information and coordinate their operations with the
trade missions of other socialist countries, especially in machinery and
equipment exports to capitalist countries, within the scope established
by the foreign trade commission of CEMA (conference of representatives
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'JJA
of foreign trade ministries and of directors of foreign trade organizations
held in Budapest on 28-31 May 1958, concerned with the problem of further
improvement of forms and methods of coordinating operations in exports of
machinery and equipment to capitalist countries). Uniform operations,
based on mutual benefits, will eliminate unnecessary competitive struggles,
and will bring agreement on methods to be followed in proceeding against
and countering all evidence of trade discrimination.
Refering once again to the prospects for our goods exchange with
foreign countries, they appear as follows:
1. Increased exports of machinery and equipment.
2. Maintenance (of the same level) of coal exports.
3. Increased exports of agricultural and food products.
4. Expanded export of various so-called small export commodities.
5. Import of raw materials, to the extent possible, from the area
of their origin.
6. Increased machinery imports.
7. Increased raw material imports.
8. Extensive cooperation and development of trade with socialist
countries and with economically under-developed countries.
9. Also, development of trade with capitalist countries, but on the
principle of paying for imports with exports to a given country.
10. A very significant increase in trade (in access of 10% per year).
Summary
Summing up my discussion of the foreign trade situation in the current
year and the tasks which face us in the second half of the year I must
say that
inspite of the unfavorable development of our terms of trade in
eenpasfbaa with the previous periods
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- inspite of very difficult commodity goals;
- inspite of significant failures on the part of industry and our
trade apparatus;
- and inspite of the shortage of foreign exchange reserves and
significant payment obligations from previous years and especially
last year,
we have managed to achieve fair results and have taken a step
forward in improving our work, primarily in export, in planning, and
in the coordination of financial matters.
We can today be proud of the fact that in spite of great
difficulties, the machinery export goal planned will be exceeded. We
will meet and exceed the coal export plan, and we will significantly
exceed the export plan for agricultural products and food. De facto,
what we have been given to sell we have sold.
We are aware of the numerous difficulties and obstacles standing
in the path of the development of our foreign trade. We have taken
courage and can with greater certainty may that both the high import
goals as well as the export goals (particularly exports of investment
goods, which goals at one time disturbed us with their very rapid increase)
are in principle fulfilled. We have been helped in our work and in the
future will. be helped to an ever increasing degree by the increasingly
evident effects of the model changes in industry and agriculture, which
are reflected in increased production, higher productivity, and savings
in the material economy.
The purpose of our conference will be achieved if, after we recognize
our tasks and the results which have already been achieved, we proceed
.with a coordinated and consequential. effort to assure conditions for the
full realization of foreign trade goals for the current year, and prepare
eass.lves for operations in future periods . The discussion following
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this report will doubtlessly add more information to the problems I have
mentioned, and will develop and specify practical recommendations for
further work.
- Comments of the Undersecretary of State and of depart-
mental directors of the Ministry of Foreign Trade.
- Comments by chiefs of trade missions.
Since it is appropriate to tie-in the tasks outlined in the report
with the actual economic situation, [the section which follows] does
not separate discussion on the report from information given by the
individual chiefs of foreign trade missions. Thirty speakers took part
in the discussion, including twenty representatives of trade missions
and eight ministry representatives. The following is a list of the
speakers in order of their appearance:
1. T. Kovalkowski, commercial counselor in Switzerland
2. J. Stroczan, commercial counselor in France
3. L. Sobkowski, commercial counselor in Italy
4. Z. Bidzinski, Director of the Finance Department of the Min. of For. Tr.
5. F. Jarzebski, chief of the trade mission in the GDR
6. B. Mordzinski, commercial counselor in Yugoslavia
7. B. Olszewski, commercial attache in Albania
8. T. Checinaki, Deputy Director of the Goods Turnover Dept. of the Min. of For. Tr.
9. B. Szymanski, commercial counselor in China
10. W. Sedziwy, commercial counselor in the USSR
11. J. Kutin, Deputy Minister of Foreign Trade
12. F. Fabijanski, commercial counselor in Sweden
13. A. Wolynski, commercial counselor in England
14. T. Kropczynaki, Deputy Minister of Foreign Trade
15. Switala, representative of the office of the commercial counselor in Finland
16. K. Strabel, commercial counselor in Denmark
17. Be Strus, Director of Treaty Department II in Min. of For. Tr.
18. K. Jezierski, Commercial attache in Greece
19. M. Buch, commercial counselor in Turkey
20. St. Halicki, Director of the Machinery and Equipment Dept. of the Min. of
For. Tr.
21. J. Dylewski, commercial counselor in West Germany
22. F. Modrzewski, Deputy Minister of Foreign Trade
23. M. Adamski, commercial Attache in Belgium
24. K. Sobolewski, commercial attache in the Netherlands
25. J. Burakievicz, Deputy Minister of Foreign Trade
26. L. Lachowaki, commercial counselor in-Austria
27. L. Kleszcz, commercial attache in Norway
28. W. Zawidzki, commercial. counselor in Canada
29. J. Rakoczy, commercial attache in Czechoslovakia
30. T.,Doreta, commercial counselor in Hungary
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The following report on the course of the discussion is in an
objective form; it is limited to a presentation of the essential
problems in the discussion and does not include a subjective reflection
of the discussion.
Comments of Deputy Ministers and Departmental
Directors of the Ministry of Foreign Trade
1. Organization of the work of the offices of the commercial
counselors, and distribution of work and cooperation between the offices
of the commercial counselors and the central offices of foreign trade
and their representatives:
The basic function of the office of the commercial counselor is
to implement trade policy within its area. In practice, the offices
of the commercial counselors oftentimes overemphasize practical trade
operations, encroaching on and sometimes assuming the functions of the
central foreign trade offices and their representatives while at the same
.time negelecting their own elementary obligations. The problem is to
find a middle ground which will permit a proper proportion of interests.
The offices of the commercial counselors should, through their operations,
create conditions ensuring the proper implementation and fulfillment of
the plans of individual central trade offices in their sphere of operations.
This however, does not mean that the office of the commercial counselor
undertakes the practical realization of these tasks, eliminating the
competent apparatus of the central foreign trade office.
The offices of the commercial counselors should through their operations
aim at increasing both the geographic and the goods profile of trade. We
should remember however, that this increase should not be an end in itself,
and should proceed according to rational economic principles. Increase in
turnover cannot be treated from the particular point of view of the interests
of the specific geographic market, but from the point of view of the overall
economic interests of Poland.
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We dust always remember that gains on one market may at times result
in difficulties on another market, which in effect may transform the
gains into net losses. The commercial counselor should maintain a broad
economic prospective rather than one limited to his own area and market.
A characteristic example of the lack of such perspective is the heretofore
inadequate penetration of the nearby and fruitful socialist markets, as
regards both export and import possibilities. In a word this means that
the office of the commercial counselor must give more consideration to
(overall]'political policy in its fullest sense.
In trade operations you cannot be a slave to, theories on the
existence of different types of socialists and capitalist markets, and
of markets governed by the usual. rules. Trade operations are always
subject to changes which emanate both from organizational changes as well
as structural changes in these markets. Only the commercial counselor,
who "sits" on a given market and who is an extension of the Ministry, can
and must give expression to the policy of the Ministry. He also must
have an organizational understanding of a given market which he should
share with the trade organs at home. From the very nature of things,
the Ministry is not in a position to specifically define the organization
of the work of a counselor on a given market, since specific characteristics
of a market oftentimes require varied and separate solutions. For instance,
the problem of working through agents and intermediaries, depends on the
peculiar conditions and needs of a given market. At any rate you cannot
apply extremely schematic solutions.
In connection with the problem of organization of the work of the
offices of the commercial counselors, we must also emphasize that the
general.epinion is that the assignment of delegates from the central
f reign trade offices to the offices of the commercial counselors has
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brought about significant gains. Unfortunately, not all central foreign
trade offices have their delegates, and they should take care to see
that these delegates are provided to the extent possible. The foreign
trade offices however, complain that the commercial counselors have
been using the delegates for various work which is basically not
connected with their functions, for instance, using them as replacements
for employees of the office on leave, etc. We must emphasize here that
these delegates must be treated differently. It is true that the delegate
is a worker of the office of the commercial counselor (with the exception
of "Weglokoks"), however, since he is an agent of the central foreign trade
office on a given market, he must be afforded working conditions which
enable him to perform primarily that work which is necessary from the
point of view of the interests of the central foreign trade office.
Besides-the delegates, the foreign trade enterprises should have,
where this is required by the market, reliable agency firms in the
countries served by the foreign trade mission. These firms, in addition
to their contacts and the fulfillment of specified functions, doubtlessly
facilitate the further development of export.
The commercial counselor should have a deciding voice on the fitness
and the activities of the agency, and he should share any information he
obtains in this regard with the central foreign office or if necessary
with the Ministry.
The final problem pertinent to the organization of the work of the
offices of the commercial counselors and enterprises of the foreign trade
offices, is the matter of visits by representatives of the central foreign
trade offices. We have much evidence that these trips are unprepared and
therefore last such longer than is necessary. The central foreign trade
offices should spend more time on their preparation and should previously
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advise the counselors of the expected visit by the representative. On
their part the offices of the commercial counselors should prepare for
the visit of, the delegate of the central foreign trade office, and thus
enable him to quickly complete his mission and return quickly. This
would also result in effective savings in foreign exchange. Of course
we must warn that this does not mean that we should go overboard in the
other direction as concerns economies.
2. The problem of credits:
The problem of credits is part of trade policy. We do not mean
that special measures must be taken in this field, but it is both
necessary and well that accurate studies be made of the disposition
and credit possibilities on individual markets. We should hold to a
policy whereby the credit initiative in every case would come from the
market itself. The recession in Europe undoubtedly has created a
favorable situation insofar as increasing credit offers. Credit centers
are undoubtedly showing an ever increasing interest in our market, which
means that we should make use of the most attractive propositions. In
every case where consideration is being given to accepting credit we
must have a thorough understanding of the situation of the individual
credit markets, the policy of a given government on the subject, and the
opinions of authoritative circles and economic centers.
The above three factors will enable us to evaluate and eventually
utilize those credit possibilities which give us the best results and
assure favorable possibilities of repayment through our exports.
Minister W. Trampczynski explained the position of the Ministry
with regard to our credit interests in an interview. granted to one of
the press representatives from West Germany. He stated that we are not
interested in credits where current trade turnover and at the same time
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our export is endangered by these or other conditions. In every case
we must be able to clearly see prospects for covering payments with
our exports.
3. The problem of increasing trade with economically underdeveloped
countries:
The current situation moves us to give greater attention to the
development of trade with under-developed countries. There presently
exists a favorable competitive situation, which we should utilize by
directing our purchases of raw materials directly from the producers.
At the same time we must give special attention to our exports,
particularly of machinery and equipment, in this direction.
.The percentage share of trade with these countries is not great in
comparison with our total trade. In 1957 this trade amounted to about
500 million foreign exchange zlotys, or 5.7 percent of total Polish
foreign trade turnover. The goals of the next plan provide that in
1961 this trade will amount to one billion foreign exchange zlotys, or
in excess of 10 percent of the total value of our trade. This means
that new tasks face our commercial counselors in these countries, as well
as the commercial counselors in other countries. The majority of our
central foreign trade offices exhibit a certain disinclination towards
direct purchases on the producer markets, of goods from the production
of under-developed countries. Our associates in these countries should
assist the Ministry of Foreign Trade by indicating direct sources of
purchases and by facilitating direct contacts with suppliers, so that
the task of developing trade with economically under-developed countries
is rapidly accomplished. For instance, the Netherlands had a well-developed
Indonesian market but now the Netherlands are inactive on this market. We
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have a whole series of contacts there and it would be well if the
counselor in Indonesia would help us. Activation of trade with these
countries should be viewed not only from the standpoint of developing
our purchases, but also from the standpoint of increasing our exports
to these countries.
In general, the problem should be so resolved that in the future
the counselors in the economically under-developed countries step-up
their efforts in purchasing raw materials for our market, as well as
in locating markets for our export production. The commercial
counselors are requested to supply appropriate information to the
Ministry of Foreign Trade and the central offices of foreign trade
on this subject.
4. The problem of prices and re-export:
In practice, we should aim at the conclusion of long-term contracts,
justifying this policy on the basis of prices. Maintenance of our position
on a given market requires that the office of the commercial counselor
conduct a thorough analysis of competitive prices on a given market. We
must adopt such a policy whereby our export can be adapted to this
competition. More attention should be given to a thorough and current
study of the structure of the terms of trade.
On the subject of prices we must have a prepared concept, to which
concept we must obtain the greatest number of adherents. We should
influence the formation of prices to the extent possible, knowing when
we can raise and lower prices. Particular attention should be given to
this problem by commercial counselors in those countries with which we
have a balanced trade situation, that is, in Sweden, Belgium, Svitserland,
Denmark and Norway. Our position on these markets must be used as certain
,memo of pressure for preferred treatment for our exports.
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The next problem tied in with the above is the matter of re-export.
This problem is of special significance to representatives in the
socialist countries, both the commercial counselors as well as those
from the central foreign trade offices. Pressure should be applied
to central foreign trade offices so that in their operations they not
limit themselves merely to the realization of planned tasks, but show
actual operational initiative in trade, utilizing possibilities and
initiating the conclusion of re-export transactions. The commercial
counselors also have a fruitful field for operation here.
5. The problem of stabilization of trade and economic relations:
The most characteristic problem in our trade relations with capitalist
countries is the lack of stability. They show a very irregular course.
If the actual pattern of overall trade relations does not show any actual
breaks, there is not a single country with which such actual breaks have
not occurred for individual commodities. We feel this lack of stability
very much not only in our treaty and trade policy, which for the treaty
department is very painful, but also throughout the entire Ministry.
It is even felt deep within other ministries and in industry. There is
a tendency to systematize and stabilize this policy with regard to capitalist
countries. Minister Trampczynski reminded us in his report that the commodity
mass is to be sold on planned markets. This indicates the direction of our
trade policy, although not all trade conditions favoring such a policy
have been regulated in our Ministry.
Two basic problems should be emphasized:
The first problem, which was mentioned counselor Fabijanski, is the
lack of data and instructions from the Ministry as to the amount of goods
.at our disposal in a given sector. The Ministry of Foreign Trade also
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feels the lack of such data, which makes management of a proper trade
policy impossible. In the future we will arrive at the point where
we will be able to conduct a trade policy according to certain principles,
enabling us to stabilize relations with capitalist countries. These are
objective factors which depend in part on the Ministry of Foreign Trade.
The second problem, which depends on the commercial counselors, is
the matter of relations with firms with which the counselors maintain
contact. Contacts with business firms, which in many countries influence
to an important extent the decision of governments, is either nonexistent
or very loose. We have relatively little contact with important firms
in the capitalist countries. This problem should be given serious
consideration. For instance, after three years of cooperation with
Brazil we had to change all of our representatives in the sphere of
investment goods exports. Such a situation does not encourage stability
in trade relations.
The ideal in our planning would be a situation where we could plan
on the basis of relations with those customers who are our continuous
important partners. The commercial counselors should indicate the most
appropriate manner in which we may obtain continuing important customers
with whom we could work over longer periods of time.
The following subjects were also mentioned during the discussions
Commercial counselor Wolynski stated that British imports have not
decreased, although the costs of imports were about 10 percent less than
in the same period of'the previous year. We unfortunately, do not even
have estimated figures in this sphere.
The problem of tariffs was not mentioned at all during the discussion,
although this is a vital and essential problem in foreign trade.
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We also heard nothing on matters concerning the free currency market.
This problem is not only important to the department, but to the entire
Ministry. Such information is necessary for a proper trade policy.
6. The problem of activating exports and export productions
Today we have discussed the difficulties which we will have in
our trade balance during the current year. The first estimate of the
long-range foreign trade plan to 1957 [sic], indicates that the
difficulties will continue to exist. The preponderance of the value of
imports over exports is clear. Naturally, such a plan cannot be accepted.
This is the reason for the stress on the activation of exports, both from
a quantitative and qualitative standpoint, and the expansion of assortments.
The Ministry of Foreign Trade has already accomplished much in this direction.
One such move has been the realization of investments of a character such
as to bring a quick return from the standpoint of foreign exchange. Data
which has been collected indicates that we have succeeded in finding
enough goods for exports to balance the increasing imports. However, to
produce goods is one thing, to sell them is another. Signs are appearing
in all central foreign trade offices that difficulties are being encountered
in the sale of goods, whose quantities [available for] exports are slowly
increasing. I shall give a few examples in chemicals. Difficulties are
evident in finding markets for dyes and pharmaceutical, although there
is no difficulty with calcium soda. However, when within two to three
years the chemical industry provides us with 200 or 300,000 tons, then
there will undoubtedly be difficulties in export. The examples indicate
that difficulties in finding markets for goods will increase.
Existing difficulties are caused in part by the American recession
and the uncertainty on world markets, which to some degree is reflected
is the eccnadic situation of other countries. Another reason is the
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increasing production in other European and non-European countries,
which increases difficulties in finding markets for goods.
In order to implement activation of export, we must avail ourselves
of all available forms of trade activity, for instance, tying exports.
with imports. The central foreign trade offices have not been
adequately utilizing these forms of trade practices (although]
significant amounts of goods are purchased by us abroad. Often one
foreign trade office is buying while another is selling, and neither of
these transactions are coordinated. In such cases it is up to the office
of the commercial counselor to tie-in such purchases with our exports.
We know of examples in operations of Czech and German foreign trade offices
where they tie in the purchase of commodities with sales, and set conditions
where "we purchase 1,000,000,000 dollars worth of goods and you must purchase
a like sum of goods from us." This is not a question of dust tie-ins or
compensatory agreements, this is a matter of a good trade policy, a matter
of a purchaser being able to set conditions.
7. Various commodity problems:
A. Rolled goods.
We have significant quantities of rolled goods for export each year,
about 500,000 tons. From the standpoint of total trade our share in
worldwide foreign trade is not great, about 1 percent. However, in the
sphere of export of rolled goods Poland is listed among the powers of
Europe, that is, with West Germany, England, and France. Having at our
disposal such an instrument which can influence the trade structure of
certain countries and facilitate trade balance, especially in the free
,currency area, we should properly utilize this instrument and develop a
proper trade policy for this commodity. This requires concentrating
exports of rolled goods mainly on particular markets; West Germany,
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England, Egypt, Brazil, and Argentina. Thus far the direction such
exports have developed spontaneously. Changing this state of affairs
requires extensive work and important representatives. After undertaking
a long-range effort to obtain these markets, we should start thinking
about assuring this export for further years, and after 1960 we should
reserve an appropriate pool of such goods for capitalist countries as
well as economically under developed-countries.
In coming years there will be a favorable change in the assortment
of rolled good exports, by initiation of thin sheet production at
Nova Ruta. In the current year we have 20,000 tone of welded pipe and
conduit'pipe for which we lack customers. We must solve this rapidly,
so that foreign exchange receipts will begin flowing in the second half
of the year.
B. Railroad rolling stock, ships, agricultural machinery, and complete
industrial objects.
At last year's conference of commercial counselors we noted the
surplus production capacity existing in the railroad rolling stock
industry and in the shipbuilding industry. In the meantime we have
concluded transactions which have exhausted our production reserves in
these industries until 1960, and with the conclusion of the agreement with
Indonesia, until 1962 in the shipbuilding industry. Therefore, in the
present period, we must emphasize acquisition of orders for individual
machines, especially agricultural machines in which we are specialists.
Raving concluded multi-year agreements for machinery deliveries for
the OSS1, the Chinese People's Republic, and Czechoslovakia, we should
now center our main efforts on the acquisition [of markets) in economically
varier-developed capitalist countries.
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C. Purchases and sales of machinery.
Information which we possess and an analysis of contracts for 1959
indicate that there has been a significant increase in [our] purchasing
of machinery in capitalist countries, without utilizing purchase possibilities
in socialist countries. In order to convince industry and to a certain
degree to make possible openings for our exports on capitalist markets,
we should organize a rapid and efficiently operating information [service]
in the socialist countries, to report on possibilities of covering our
import requirements.
Beginning in July of this year, the Department of Machinery and
Equipment will not be able to proceds with purchases of machinery in
capitalist countries without first obtaining information from commercial
counselors in socialist countries as to possibilities of covering orders
there.
This is undoubtedly a problem of trade policy. We are now in a
period of numerous offers from socialist countries concerning machinery
purchases. In order to cover our purchases this must be paralleled by
offers on our part in the same direction.
COMM AND DISCUSSION BY CHIEFS OF MISSIONS
The comments of the chiefs of trade missions were directed toward
the basic purpose of the conference -- illumination of the overall market
situation with special emphasis on:
- evaluation of the recession in the capitalist countries,
- evaluation of the structure of our exports from the point of view
of possibilities of marketing such commodities as coal, agricultural
and food products, machinery and equipment, etc:,
- recommendations on expanding our range of export goods,
- recommendations on lowering import prices by direct purchases from
raw material producers in economically underdeveloped countries.
The report which follows systematizes the discussion and generalizes
individual comments in order to. stress the recommendations stemming from
glees comments.
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1. EVALUATION OF THE RECESSION IN CAPITALIST COUNTRIES
The year 1957 in European capitalist countries was overall a period
of relatively favorable conditions on the economic market. Production
indexes, when compared with past years, indicated a definite increase.
As a result of this, the tempo of this increase continues to progress
in certain countries thereby concealing very frequently the first symptoms
of a weakening of this development. From the information cited it appears
that in some European capitalist countries an unfavorable market condition
was noted by the end of 1957, in others at the beginning of 1958. With
others it is still difficult to discern, as for example in France whose
economy abounds in paradoxes and where the American recession has not had
the effect it has had on other economies. Industrial production continues
on a high level. Industrial expansion is taking place. However, the
situation in foreign trade and the balance of payments is poor. The year
1957 brought about further inflationary pressures and a deficit in the
balance of payments. Generally speaking, however, the American recession
has had an insignificant and minimal effect on the French economy. In
Spain, the American recession similarly has had very little effect.
The situation is different in Italy, where after a very favorable
market situation in 1957, employment conditions in many branches of
industry turned for the worse near the end of that year with the exception
of the automobile industry. Because foreign trade plays such a major role
in the economic life of Italy both from the standpoint of imports (a majority
of the raw materials must be imported) and exports (the automobile industry
produces every third automobile for export and in the synthetic fiber
industry some firms export 90 percent of their goods) the recession is a
very dangerous thing. Because a majority of the countries which import
Italian products are. either threatened or plagued with a recession the
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prospects for this year do not look very good. As a result the Italian
Government is trying to stimulate trade relations by introducing the
multilateral lira in dealings with practically all countries. In addition,
it is granting exporters permission for a delay (up to 6 months) in
settling accounts of foreign exchange earned, is guaranteeing up to 70
percent and for a period of 5 years credits extended abroad by exporters
of investment equipment, and finally it is encouraging economic relations
with underdeveloped nations or with the more important potential importers.
It is also difficult to present an objective picture of the effect
of the recession on the British economy. The production index for the
first four months of this year is identical with the same period of last
year. On the surface it would seem that things are not so bad but one
must take into consideration the fact that this index is really being
maintained with the aid of only one industry, namely, the automobile
industry. In all other spheres there is a decrease. Speaking of the
future condition of the market, it is generally felt in important economic
circles that the recession has not had too adverse an effect in Great
Britain, however, a significant deterioration in the situation is expected
during the second half of the year.
Development of the situation in the capitalist world during recent
months has also had a significant effect on West German economic life,
especially on its exports. During the early stages of the developing
recession West German exports, thanks to a backlog of orders maintained
certain signs of continued increase, but in March they showed the first
signs of a decrease. It was very fortunate that in the past West German
foreign trade efforts were primarily directed at the European market.
That Is vby the West European nations were not as affected by the recession
as was the USA and the overseas nations who were primarily sources of raw
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materials. That is why it should be assumed that West German exports
are likely to be least affected by the recession. West German economic
circles still see certain reserves in the necessity of additional
investments in domestic industry., whose needs in the past were treated
as long-term and which now can be viewed as a potential customer -- in
case of partial displacement of its production it can be used for
armament production.
During the past year the Belgian economy witnessed a period of
revived economic activity because of preparations for the World Fair
and the advantageous economic situation in the world. Beginning with
February 1958 current industrial production has been undergoing a
systematic drop as compared with its level during the same period last
year. The drop in production is especially noticeable in heavy industry
although certain branches of production (as for example chemicals,
electrical machine industry) have not experienced any signs of the
recession.
U. EXPORT
Considerations and proposals in appraising the
structure of our exports-from the point of view of
possible sales (primarily, coal,. agricultural consumer
products, machines and equipment) and proposals for ex-
panding the current assortment of our goods.
Capitalist countries.
1. The French market
a) Possibilities of exporting investment equipments
Zfforts intended to place investment equipment on this market,
deipite certain achievements, have not yielded the desired results.
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It is important to note that the French industry enjoys a respected
'position in Europe, especially in the production of machines and
weaving equipment, electrical equipment, rail and motorized rolling
stock. Despite this there are chances of placing on the French
market for the year 1960, about 400,000 dollars worth of machines.
An indispensible condition for the development of this export is
improving the quality of electrical parts and continued acquisition
and the organization of technical servicing facilities in Paris.
b) Floating stocks
Even though France has greatly developed ship-yards for
ocean-going and fishing vessels, two factors create great possibilities
for "Centromor" : .
- continuous and greatly changing competitive conditions, as a result
of which during recurrent "peaks" the number of contracts for local
industry is great and therefore foreign competition is not considered
a threat but on the contrary it complements the production base,
- Polish floating stock is of good quality and it has quickly achieved
a good reputation in professional circles.
The present period is not a very good one, especially for larger
units. However, the situation is subject to constant change and that
is why we should continaully keep abreast of events. In selling
floating stock on this market we should use the significant weapon
which we have at our disposal -? our very important purchases on that
market.
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8EC
C) Coal:
We still have 250,000 thousand tons of coal which has not been
sold. The majority of the deliveries are coal dust. We should expect
that, the demand for coal will decrease in 1961-1969, therefore, we can
at the same time expect difficulties with coal dust. Expected orders
for 1959 will remain the same as in 1958.
d) Agricultural and Food products:
The current export of pork (2 million dollars) is a temporary
thing. There are also possibilities of exporting seed potatoes (total
imports are 100 thousand tons- Poland provides 3,000 tons), seeds,
apples, onions, fruit pulp, corn, beef, lamb.
2. The Spanish market
Spain, ever since it left the economic isolation in which it
remained until 1954, has strived to modernize its national economy
and industrialize. This offers possibilities of exporting to that
country investment equipment, raw materials, consumer goods, foodstuffs
and fuels - coal. The Spanish market is relatively undemanding and
offers a possibility of achieving profitable prices. This is a sellerls
market. However, one should keep in mind the necessity of making the
proper purchases there. Export possibilities can be carried out by
the following central foreign trade offices: "Motoimport", "Metalexport",
MCentrozap", "Varimex".
3. The Italian Market
The most important of our export items to Italy are coal, machine
tools, alcohol, benzol, naphthalene, aniline oil, naphthene, eggs,
casein, poultry, swine, horses, potato meal, sugar beet seeds, deal-board,
oak friezes.
a) Coal:
It is expected that during this year contracts should amount to
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about 700,000 tons. This is a result of the correctness of the present
policy or prices and sales. These elements are emphasized in talks
with our contractees (that is with the exception of the group in favor
of returning to the system of exclusive [rights). It should be
emphasized that the benefits accruing as a result of selling without
using exclusive [rights] are significant and this policy should be
continued. The present uniform prices charged should be varied in the
sense that for quantities less than 10,000 tons the price should be
increased by about 5 percent.
b) Animal products:
In this field the Italians undoubtedly present a very interesting
market for us.
The export of fresh eggs should reach at least 800 carloads by
the and of the year (until now it has been 364 carloads). The export
of this item during the second half of the year is more profitable
because of the higher prices, about 15-20 percent, than during the
beginning of the season. Besides fresh eggs we can also count on
exporting frozen bulk and certain quantities of powdered eggs. The
combined export of fresh eggs and egg products should reach an annual
sum of 3.5 million dollars. Another traditional "Animex" article for
the Italian market is poultry (chicks, chickens, turkeys). During
the 1958-1959 season the export of these articles should reach about
800 tons valued at 650,000 dollars. Other "Animex" export items are
casein and live swine. The Smiaviscosa firm, importer of casein and
producer of synthetic fibers had given assurances that they will import
greater quantities of this item depending on a similar increase of
our purchases of synthetic fibers. A contract has been signed calling
for the sale of 8,000 live swine, of which 6,000 have already been
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supplied while the remaining 2,000 will be delivered in the fall.
At present there are real possibilities of compensating FIAT for
buses (about 30-40 thousand swine) which should provide a total of
1.7-1.8 million dollars in one direction. There is a further possibility
of exporting such articles as lactose and preserved meats such as
ham. There are good prospects for "Rolimpex" to export seeds (especially
fodder beets). There is also a possibility of increasing the export
of seeds to about 800 tons. On the Italian market we have a quota of
1,000 tons without a license.
The Italians are a major importer of potato meal. We also have
an increased quota (2,000 tons) for this product without a license.
It should be emphasized, that there is a special quota of 11,500
tons with a lower customs duty of 22 percent, whereas over the quota
the duty is 49 percent. If "Rolimpex" can supply the meal within the
specified times, i.e., within the period of the division of the entire
quota (2 January) we are assured the sale of the entire 2,000 tons
(240-250 thousand dollars).
Another "Rolimpex" export item is chicory. There is a possibility
of selling 2,000 tons (120,000 dollars of chicory), 2-3 thousand tons
of brewery barley (150-200 thousand dollars), and 300 tons of mead
without a license.
c) Machines and investment equipment:
The sale of machines (machine tools) to a country which produces
them without including in this sale the purchase of investment
equipment on our part would encounter significant difficulties. The
possibility of exports in this field would greatly depend on our
industry being able to deliver on time. At present there is a backlog
of almost 2 years. It should be remembered that Italian consumers can
acquire such machines. almost immediately directly from the factories.
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The Italians have informed us that we will get further contracts only
when the first consignments are received which fulfill the required
standards of quality.
There are prospects of selling on this market machine tools
valued at 400-500 thousand dollars provided we fulfill the above
mentioned demands. "Metalexport" should continue to try to export
textile machinery completed by Italian producers and based on the
principle of reciprocity.
4. The West German Market
Because Poland has been a constant debtor of West Germany since
1955, the efforts of our foreign trade should be directed not only
at achieving a balanced trade with West Germany but it should also
facilitate an increase of investment purchases on that market.
The basic items of our export to West Germany are:
)a) Coal:
Despite the fact that West Germany is one of the principle coal
producers (annual production of about 135 million tons), it imports
large quantities of coal, in 1957 about 21 million tons. This year
we plan to export about 2 million tons ( a four-fold increase
compared to 1957).
The present situation is not very favorable for talks on this
matter. The shortage of coal on the West German market during the
Suez crisis in 1956-57 caused them to import American coal within
the framework of long-term contracts covering as much as 10 years.
The import of American coal according to signed contracts through
1960 total 15 million tons of coal annually. Besides the West
German coal industry has stocks of coal at the mine which amount
to about 6 million tons. As a result they [the mines] have had
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C% r?1Jca T~
1i2..
to declare so-called "holidays." In addition, the trade unions and
government functionaries are intervening to halt the import of coal.
Because of the liberalization in the import of American coal, the
government functionaries have not been influential in curbing this
import, however, they can exert a certain pressure on importers against
signing new contracts.
One should also include the competition provided by liquid fuels
which has resulted in. industrial enterprises changing over to the
use of fuel oil, the use of liquid fuel to heat homes, on the
railroads, etc. The present economic stagnation in the West Germany
is affecting the coal situation on this market. It is therefore
understandable why disposal of 2 million tons of coal on the West
German market in the present situation is a very difficult problem.
The sale of Polish coal on the German market is accomplished by a
company called "Polimport," established for the purpose of importing
Polish coal and consisting of 18 German importers. The organization
of sales is at the moment uniform, i.e., all exporting is carried
on by this group. Because of the necessity of carrying on a proper
policy on the market, the trade mission advises against any related
direct transactions, which in the opinion of the trade mission would
introduce disorganization on the market by offering coal to consumers
from various sources and in this manner compete against our own coal.
In this situation it is necessary to establish a representative
of "Weglokoks" in West Germany and to reorganize "Polimport". The
representative should establish contact with industry and try to
tie-in import transactions with our exports of coal, and seek
further possibilities for the sale of coal (in this way carrying out
its own sales; policy while limiting the sphere of influence of
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NPolimport"). In trying to link the sale of coal with imports, the
central import offices whould try to establish direct contact with
trade mission. In addition, attention should be paid to the
necessity of entering into long-term agreements (treaty and
license insurance) for the export of our coal to West Berlin, to
initiating inland navigation, and to the competition of Soviet coal
on the West German market.
b) Agricultural and food products
Agricultural and food products are our basic export goods to
West Germany (annual export is about 170 million DM or about 60
percent of the total export to the GFR). This group has a good
chance of exapanding depending on:
- the possibility of receiving increased trade agreement quotas;
- our production capabilities, especially improving the quality of
goods, packaging, promptness of delivery, flexibility of payments etc.,
- the proper organization of the market by the foreign trade central
offices such as direct representation, consignment arrangements,
etc., special attention should be paid to the coordination of work
between the central offices because instances have occured where
two central offices as for example, "Rolimpex" and "Hortex" offer
to. the same consumers the same products but at different prices;
- avoiding the granting of agencies to insignificant firms, of which
there are many in West Germany.
5. The English market.
In exports we are maintaining the same level as last year with
a slight increase in exports [sic] this year. However, an undesirable
phenomenon should be noted, namely, the drop in prices. Besides, the
central offices are not trying too hard to export those articles
which were placed on the export list upon their own suggestion.
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The principal items of our export are: agricultural and food
commodities, bacon, ham, and butter. There is a possibility of
introducing such items as: onions, vodka, and other agricultural
consumer goods. It would be worthwhile to emphasize the export of
vodka to Great Britain above and beyond the existing quotas.
In exporting the products of the chemical industry we should
try to assure their continued export with the aid of long-term
agreements. Concerning the work of central trade offices, the work
of 'Cetebe", "Minx" and "Skorimpex" is disturbing.
6. The Swedish market.
The Swedes are stressing development of export of their own
products. As a result one can notice on this market a significant
drop in imports, including our exports.
8) Coal:
The possibility of supplying more coal is not too bright because
of the modernization of industry by switching to the use of liquid
fuels. However, based on the current agreement there is a possibility
of increasing our export by 50 percent.
Export other than coal:
This export should be doubled. Sweden could become a good market
for sales (the prices of our exports in Sweden are about 50 percent
better than on the markets of the free foreign exchange countries)
and therefore various central foreign trade offices should increase
their exports at least by the following ratios: "Centrozap" - 3 times,
"Ciech" and "Metalexport" - 3 times, "Cekop" - 5 times, "Varimex"
- 10 times.-
Many of our transactions are not realized because of the poor
quality of goods, irregular deliveries and failure to fulfill contracts
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on time. Central offices should maintain close cooperation with trade
mission, not only through representatives. The Swedish market requires
permanent "Centrozap" and "Ciech" delegations as well as the organization
of a network of export agents.
7. The Finnish market.
The difficult situation of Finland has moved that government to
take several radical steps of an economic nature, among others, greater
attention to making purchases in the countries of the socialist camp.
This creates possibilities for our exports which appear as follows:
a) Coal:
We plan on exporting 1.5 million tons this year. At present we
feel the competition of Soviet coal, purchases of which are aided
by official factors. We should expect sales to be more difficult in
1959, and that is why establishing a permanent "Weglokoks"
representative is becoming an urgent matter. We should try to
arrange long-term agreements.
b) Machines, equipment and metallurgical products:
The liberalization of machine imports and equipment has resulted
in our ouster from the Finnish market. Another reason was the poor
quality of our products. One of the main tasks now is to reestablish
confidence in our products on the Finnish'market. Besides that we
should try to tie-in our purchases with the export of investment
equipment. We should try to*avoid Finnish suppliers who are not
interested in our exports. Another means of expanding the export of
investment goods is a good advertising campaign showing that our
machines are exported to many capitalist countries. In addition we
should use a flexible policy in arranging credits to Finnish consumers,.
In connection with the intended reconstruction of industry and
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transportation there are possibilities of selling the appropriate
products of our industry. "Metalexport", "Elektrim" and "Centrozap"
Central Trade Offices should pay special attention to this matter.
Metallurgical products have a good chance on the Finnish market and
their sales can increase 3-fold.
c) Chemicals:
Our chemical exports are completely neglected on this market.
A permanent "Chiech" delegate should be appointed to that market.
The heretofore sporadic system of sales by trade missions is not at
all effective. The Finnish market can use chemical items for the
lumber, cellulose and paper industry-such as: soda ash, aluminum
sulfate, extractive rosin, water glass, calcium chloride, creosote
oil, sodium thiosulfate, zinc white etc.
d) Agricultural consumer goods:
Besides the traditional goods such as sugar, salt, alcohol, fodder
yeast, potato meal, and casein, there is also the possibility of
selling feathers, dextrine, brewery barley, mead, fruits, onions,
fish etc.
e) Textile and other articles:
The liberalization of the import of textile goods has created
difficulties for the export of our goods. Increasing the flexibility
of prices, and adhering to quality requirements of consumers would
yield possibilities of placing a number of goods on the market.
Finland is especially interested in the purchase of rags paying for
them in free foreign exchange. As our trade counselor knows, in
the past year Finland purchased Polish rags from England, while
NTextilimport" does not want to negotiate on this subject with Finnish
importers. Another example of lack of coordination is the case where
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"Ciech" sold small-caliber cartridges which "Varimex" is buying on
that market.
8. The Danish market.
An increase of exports to Denmark should be accompanied by a
similar increase in imports ("przerzuty" [literally transfers] to
Denmark from free foreign exchange countries). Because there are
no permanent Central Office representatives in this B.R.H. there is
a need for more frequent acquisitioning visits. Our basic export
item to Denmark is coal.
a) Coal:
As in other European countries, Danish industry is also making
great efforts to change over to the use of liquid fuels. This
presents an adverse situation for the export of our coal. This
process can be restrained only by employing a coal price policy that
Will be able to compete with the prices of liquid fuels. The Danish
market to a certain extent is concentrating its attention less on
sorted coal and is directing its interests on assortments [word missing]
and coal dust. Our coal industry should especially weigh possibilities.
of maintaining competition between the prices of coal dust and the
prices of liquid fuels. There are also possibilities of selling coal
gas and coke on that market. We should look into the possibility of
importing coking coal from the USSR and Czechoslovakia and concentrate
on the sale of our coal gas, which presently is used in the production
of coke. We should also look into the possibility of exchanging our
coal used for power purposes for coal gas from Czechoslovakia.
b) Other export products:
The export of our machines is only in the infancy stage. The
central export offices should increase their interests in this market.
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Certain items from re-export, as for example, fuel oils, artificial
fertilizers, etc., can be easily sold in llenmark. The central offices
should devote more attention to the problem of re-export.
9. The Norwegian market.
The economic recession (cargo) and the ensuing worsening of the
Norwegain balance of payments has resulted in decreasing imports by
this country. The decrease first of all affects the socialist
countries. This is true in decreased import of our textiles. Now
they are taking measures to decrease the import of porcelains and
glass. The fundamental difficulty in placing our export is the lack
of a consistent policy in this field. It should be emphasized that
although trade with Poland is decreasing, turnover with the USSR,
GDR and Czechoslovakia is constantly increasing. The basic
difficulty in placing our exports on the Norwegian market is the
laok of a poised and consequential goods policy. The basis of our
export are such goods as: steel, iron, grain, cement, coal and sugar.
However, the quantities of such goods are subject to significant
fluctuations during certain years, while in other years they
completely disappear from export. Great effort is required to
re-enter the [Norwegian] market. The conclusion - more concern
with maintaining the market.
a) The export of coal:
Just as on other European markets here too we notice a change-over
to liquid fuels. In addition, in Norway, there is natural competition
from "white coal" as well as from the price of American coal:
US coal
- 101 crowns elf
t14.10
Polish coal
- 113 crowns cif
t15.80
As a result of the constantly decreasing possibilities of exporting
coal we should seek new commodities to cover our imports.
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b) The Possibilities of exporting other commodities:
They are: sugar, metallurgical products, chemicals - the latter
have an especially good chance of being sold. It should be noted
that "Ciech" has not exported to this market for several years.
However, "Ciech" is showing a lot of interest in imports from this
market. The Norwegians are very much interested in our investment
equipment and the "Syrena" and "Mikrus" type automobiles. In exports
the Norwegians demand agents. "Centromor" should establish its own
agency in Oslo for the purpose of making contracts for the repair of
ships in the entire Scandinavian region.
10. The Belgian market.
The basic problem troubling the Pelpians is coal. The rapid
increase of stocks is limiting its production and import. This is
having an effect on our ability to fulfill our export tasks in this
commodity. This year we will be able to sell 50-60,000 tons of coal
(dust and slurry) - we have already received a license for 35,000
tons.
Besides coal, our export includes goods of "Animex" (about 1.5
million rubles), "Paged" (about 6 million rubles), "Rolimpex"
(7 million rubles), "Ciech" (.5 million rubles), "Netalexport"
(.7 million rubles).
"Cetebe", "Hortex", "Coopexim", "Varimex", and "Ars Polona" central
foreign trade offices represent lesser exports. The central offices
should make sure that deliveries are fulfilled, because if a commodity
should lose its place on the Belgian market, there is no chance of
getting a license for this commodity in the future.. Because of
increasing competition it is necessary to comply with the demands of
consumers in the matter of delivery dates, the proper quality of
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exported goods, and prices. Exports should be expanded to a maximum
by means of tie-in transactions. The present time is especially
opportune for entering the Belgian market with investment products.
Much attention should be devoted to pioneering exports. The
"Centrozap", "Metalexport", "Paged" central offices do not use
tie-in transactions at all, even though possibilities do exist in
this respect. The commercial counselor is ready to coordinate in
this matter.
U. The hutch market.
One of the means of increased exports to Holland is tie-in
transactions. Many firms propose this sort of arrangement, among
others, the Phillips firm offers its products in exchange for coal.
In addition, other consumers offer textile machines for gabardine
cloth, coal for agricultural machinery, etc. In connection with the
significant investments planned, it is possible to place large
quantities of cement on that market. The "Prodimex" Central Office
should become interested in trade in luxury goods, as for example,
furs, stockings.
12. The Austrian market.
As a result of investment contracts already concluded we owe
Austria about $30 million dollars. If we add to this figure repayment
of consumer credits plus current imports, then we have adequate incentive
for increasing our exports and taking advantage of the inclination of
Austrian economic circles which are in favor of increasing the exchange
of goods with us. It is too bad that our export is of a noncultural
nature, namely, 90 percent coal. Granted the assumption that we must
expand our trade, we should think of increasing the variety of goods
and we should especially support the tendency toward export. of
finished goods of our industry. The possibility of increasing our
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exports depends on whether or not we want to take advantage of the
changes in the Austrian economy., Despite the signs of recession in
certain branches of industry, others are showing a definite upswing,
as for example, the petroleum industry. The construction of a
refinery presents good opportunities for exporting pipes. If
NCentrozap" can assure a wide assortment of pipes, we can profit
immensely. Regarding the export of machines we can establish
possible sales by relying extensively on tie-in transactions, which
.the USSR and Czechoslovakia have used so successfully. This is
the only way of increasing exports of machines at present. However,
it is necessary that the central offices inform commercial counselors
of the intended purchases.
The Austrian market can be regarded as a. prospective importer
of our agricultural consumer goods, therefore, the central offices
should devote more attention to this market. In addition we should
look into the problem of using our ports for trade between Austria
and Scandinavia. Austria imports about 200,000 tons of iron ore
from Scandinavia and ships it by way of West Germany. The commercial
counselor is preparing some suggestions on this matter.
Finally, we should look into the possibility of selling our coal
franco Austrian border and not like at present to the Czechoslovak
border. This would result in about 92 million dollar income
annually.
13. The Greek market.
Greek importers place great emphasis on linking our export with
the purchase of their goods. In this manner we have placed 100,000
tons of coal on this.market for Greek railroads. Beyond this there
is a chance of placing 6,000 tons of coal and 3,000 tons of coke on
the private market. In addition there is a chance of placing an
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additional 100,000 tons of coking coal if we purchase zinc concentrates
(Cassandra pyrite) in Greece. We can sell them more coal for their
railroads if we purchase tobacco from them.
There is a good possibility of exporting agricultural consumer
goods, as for example, a total of 300 tons of poultry products.
Small amounts of butter have found a good market and can be exported
to the Dodecanese Islands where the customs duty is lower than in
the metropolis. Small hams have not made out too well due to
strong competition from Bulgaria and Argentina. The packaging should
be improved and eventually the prices. There is also a chance of
placing mutton and sugar on that market. "Cekop" has good
possibilities in exporting investment exports (sugar mills, refrigerators,
railroad cars). In addition, "Metalexportn, "Elektrim" and "Varimex"
should devote much attention to this market. Central offices should
improve their efficiency and techniques to facilitate the quick and
prompt settlement of matters.
14. The Turkish market.
The present difficult economic situation in Turkey has resulted
in the curbs on the import of consumer and industrial goods. We
receive high prices for our exports to Turkey. The structure of
our exports to Turkey is advantageous just as our present policy in
this field has been successful. Economic circles demand that our
imports from Turkey be increased. If we do not undertake this
directly then we should develop the re-export of several goods (as
for example, hazel-nuts, cacao etc.)
15. The Canadian market.
The present economic recession has had its effect on the
Canadian economy. The new government, based on a new program, is
taking several economic measures, among others in foreign trade,
intended to rescue the Canadian economy from the present recession.
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Despite competition from the USA and Japan, Poland has a chance of
selling sons of its products on this market: "Metalexport" can sell
machine tools, however, quick action and decisions must be made
because Czechoslovakia may beat us to it. "Minex" has a chance of
selling cement provided it first submits some actual prices which
have been lacking thus far. There is a chance of selling glass if
we maintain good quality and provide transportation. "Ciech",
"Animex", and Rolimpex" should show greater interest in this
market. "Metalexport" has a chance of selling some "Warszawa" autos.
A combined group of representatives of the interested central offices
should visit in Canada because this would make it easier to hold
talks with prospective customers.
B. The Socialist Countries
1. The USSR market.
The Soviet Union is our chief importer of a wide variety of goods.
The structure of our turnover should be changed in order to conform
to the needs of that market. Even though items of our export
(excluding coal) are chiefly transportation means (railroad rolling
stock and ships) we should presently introduce new goods for export!
electrical equipment, textile machinery, laboratory and surveying
equipment, and complete plants. Possibilities of selling this group
of commodities surpass the agreed quotas. The reconstruction of USSR
industry and the development of the chemical and agriculture-food
industries offer great possibilities for exports of appropriate investment
equipment.
We should try to raise and expand the present agreed-upon quotas.
Of 450 items, we import 150 and export barely 53. There are also
Bit
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items which appear on the GDR and Czechoslovak lists but which do not
appear on ours such as, confections and furniture which will sell very
easily. The problem of expanding our exports should be the joint
task of the trade mission, the central offices, and the Ministry.
2. The Chinese market.
During this year we have witnessed a great breakthrough in our
trade with the Chinese. The increase of our exports has been
significant and shows promise of greater expansion. At present we
are experiencing difficulties not in placing goods but in lack of
goods.
The tremendous needs of the Chinese market are the result of the
development of industry on a scale unheard of till now. The Second
Five Year Plan calls for an annual average increase of industrial
production of 20 percent. In 1962, production of the basic branches
of industry will be as follows:
steel - 15 million tons
coal - 300 million tons
electric power - 700 billion kwh.
In China one does not talk of a "recession" or "prosperity" but of
the "big leap". This leap is to be achieved, i.a., by increased
imports. Another factor which increases our export possibilities
is the suspension of the Chinese trade agreement with Japan and
decreased purchases from West Germany. In order to benefit by this
situation we should exploit every means at our disposal to increase
exports. The trade counselor especially suggests frequent (mutual)
personal contacts,. strengthening the embassy in Feking, and
coordination in the field of prices.
3. The GDR market.
The principal items in our export are solid fuels and raw
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materials, of which the basic commodities are: coal, coke, zinc,
rolled products, and agricultural consumer goods. The export of
machines does not play a significant role because our assortment
of goods is being produced by the corresponding branches of GDR
production. The problem boils down to expandini, the Assortment of
.export goods because there are 537 items on the import list and
only 60 on the export list. This is all the more surprising since
the possibility of increasing our exports is real and possible.
In connection with this we should:
- develop border trade, especially of agricultural consumer goods
(fruits, vegetables, etc.);
- expand the export of railroad rolling stock for which the GDR
has expressed great need;
- develop cooperation on third markets in the field of complete
factories and machines, especially in complementing- the supply of
electrotechnical equipment;
- use the principle of tie-in purchases with our exports.
4. The Czechoslovak market.
Czechoslovakia, because it has a well-developed industrial base,
is a difficult market for the sale of our industrial products.
Therefore, we should concentrate all our attention on the export of
goods which find a market here, therefore an extensive assortment
of agricultural consumer goods as well as coal. In addition efforts
should be made to place mining, construction, and textile machinery
on this market. Attention should also be devoted to the possibility
of cooperating with Czechoslovakia in third markets, especially in
the construction and supply of complete factories - mutual
cooperation in this field can benefit both sides.
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17,
5.. The Yugoslav market.
Our trade with Yugoslavia is developing disproportionately,
because while imports have increased sharply, exports have remained
almost the same. Among Yugoslav buyer circles there is a tendency
to seek out ways of increasing imports from Poland, however, the
central offices are holding back on exports not knowing what kind
of payments situation exists on that market. The activization of
investment export should begin with the Investment Bank, which is
the center of payments for this type of purchase. There are good
chances of exporting paper machinery, furnaces, sugar mills etc.
However, the central offices must be more prompt in fulfilling
deliveries. It should be noted that agents for investment equipment
export should be discarded because their role in this matter is
limited; instead they should be replaced by central office
representatives.
6. The Hungarian market.
The present trade agreement and the supplementary protocol call
for a significant increase in the export of investment goods.
Industry, however, should observe delivery dates. The Hungarian
market is a good customer for "Warszawa" autos; there are additional
possibilities of selling 1,000 more cars annually.
The possibilities of increased coal exports are limited. Their
own production as well as the development of hydroelectric power
limits the increase of our export of coal. A good source of income
on cur part could be transit rights through Polish ports. As a
result of the disadvantageous. terms offered by us, this income has
decreased 4-fold in comparison with the years 1952-1953. If we want
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to achieve any benefits in this field we should be competitive with
West Germany and Yugoslavia which offer 25 percent lower freight
rates and agree on clearing accounts.
7. The Albanian market.
The development of this country's economy depends on credits
granted by socialist countries. Our task amounts to forcing
(forsowanie) the export of machines and complete factories on this
market. Albania has made the proposal that Poland construct three
glaesplants and a nail factory in 1959-60.
III. IMPORTS
In making purchases emphasis must be placed upon tying in these
purchases with Polish exports. Taking this into account, purchase
decisions must not be made at the last moment but only after certain
previous considerations. Immediately upon starting negotiations,
the central foreign trade offices should call upon the trade missions.
Generally, however, no goods should be sold through tie-in sales
which can be profitably sold through clearing agreements. In the
transactions made, prices should generally be on the level of
market prices.
The principle of reducing costs by purchases directly from the
producer does not hold generally, since in many cases the prices
demanded by the factories are higher than prices paid through
official representatives of these factories. The majority of export
firms generally maintain the same price regardless of whether the
sale is made directly by the producer or through its representative.
fbviously, this pertains to large branch offices with official
representatives. All other intermediaries must be eliminated if we
are to make any profit along these lines.
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lS~-t'a~t9?
French market, where ";Centrozap" purchased semi-hard wire when soft
wire would have been perfectly adequate. Another example is the
purchase by "Textilimport" of glass fiber and-the repeated purchase
by "Rolimpex" of cocoa (good fermented) of the highest quality while
other countries purchase large amounts of cheaper cocoa (fair
fermented), probably with vanilla. The quality purchased by
"Rolimpex" is not even found in Paris stores.
In our trade policy we should view specific markets in true
perspective and not simply from the point of view of the conclusion
of one, or even several, expert or import transactions. Hence, the
recommendation to the central offices and pertinent departments of
the Ministry that individual actions and decisions not harm our
position on the market where cooperation heretofore has been
profitable for both sides.
This problem is also connected with the problem of purchases
(import) from individual markets. There is a clear indication of
improper ratios in turnover on certain markets. Many central foreign
trade offices are fulfilling their export tasks while ignoring
purchase on a given market.
The trade counselors should utilize the tendency noted on
certain markets of favorable purchase opportunities (competitive).
Purchases on certain markets should be geared to those times and
seasons when the beat prices can be obtained. Opposite tendencies on
the part of certain foreign trade offices should be opposed.
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Central offices should have wide discretion as to usefulness and
distribution of purchased raw materials and goods. Ignorance in
these matters is often the cause of excessive costs. Central offices
often purchase raw materials or goods of high quality, when lower
quality goods, at lower cost, would be adequate for the purpose
designated. This applies, for example, to recent purchases on the
C ,ET
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ET
IV. GENERAL PROBLEMS
1. The matter of transport in export and import transactions.
The central offices pay little attention to this matter when
concluding contracts. The suggestion is made that every effort be
made, particularly on imports, to retain for us [Polish bottoms] at
least 30 percent of the cargo volume, or if such a share is impossible
because of the fear of disrupting deliveries, then a stipulation should
be made in contracts cif or caf Polish ports, that one-half of the
cargo will be carried by Polish tonnage. Moreover, in our exports the
central offices should take greater advantage of favorable terms and
lover cargo rates that contracts with ship owners offer for the
transportation of specified quantities of commodities during a certain
time'period..
2. The foreign trade organization should be concerned not only
with gaining new sales markets, but also, through skillful and proper
application of the trade policy, with maintaining markets on which we
have made certain achievements. To safeguard this principle in a most
effective and objective manner, the introduction of a branch-managerial
type of an organizational structure in foreign trade enterprises should
be considered. This would ensure proper care of the markets by the
central offices. The gist of all this is that frequently it is easier
to obtain new markets than to regain a lost market.
3. In discussing problems of the organization of the commercial
counselors' offices attention was directed to the necessity of adjusting
the new organizational structure to the very end, and of taking organizational
steps to tighten mutual cooperation of the trade posts among themselves on
the one hand, and cooperation between posts, central offices, and the
ministry an the other hand.
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Moreover, the matter of dropping representatives of central offices
from budgets of the commercial poets, and of transferring them to the
tables of organizations of central offices should be considered. A
solution of this kind creates greater possibilities of control on the
part of the central foreign trade office.
4. In the field of advertising, efforts should be made to use the
means and forms acceptable on a given market, and toward the use of the
language of the given market in advertising materials and leaflets.
5. The commercial counselor in East Germany is urging a faster
decision on the opening of a store with books, record, and folk art at
the Cultural Center in Berlin. An effective intervention by the
Ministry of Foreign Affairs is necessary in this matter. (Czechs conduct
a similar store, obtaining annually about 300,000 Duestch Marks [East)
of annual income).
6. The ratio of operating workers to auxiliary workers at trade
posts should also be considered. For example in East Germany, the number
of operating-trade employees to the number of persons on the table of
organization is 16 to 41. Undoubtedly, this ratio is incorrect, and
efforts should be made to correct it. One way to achieve this would be
to have the Ministry approve only the limit on employment, and to leave
the placement of employees as to functions to the management of the
e~ercial posts.
V. POLISH TRADE PROSPECTS
The basic also of our long-range plans on foreign trade-are as follows:
1. To achieve an equilibrium in the payment balance.
2. To increase the rate of turnover of Polish foreign trade, and
to maintain a payment balance.
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Further maintenance, however, of the ratio between the average
annual rate of growth of imports to the growth of national income,
which took place in the period 1949-1956, would have to lead to excessive
autarky. This would be contradictory under our conditions with technical
progress, production specialization, and international division of labor.
Actually, we do not as yet have the figures, but a commodity analysis
shows that the basic tendency, observed now in the form of a smaller share
in exports of basic raw materials and of a simultaneous increase-in the
share of investment export, will continue in the future. Simultaneously
there will be an increase in imports of basic raw materials for industry.
Of interest at the moment to the representatives of the foreign trade
organization in respective countries is a geographic commodity pattern
that would ensure an optimum limit, the attainment of which would make
the fulfillment of the plan satisfactory. Unfortunately, there are many
factors making the definition of this limit difficult. One of them,
which should be rectified, is the lack of geographic perspective, or even
its instability. This makes the stabilization of turnover difficult.
Actually at the base of this, there are reasons connected with real
difficulties; however, geography should today be considered, and its
changes observed and reckoned with. Equally the changes in the structure
if our export as well as the theory on the shifting of purchases of raw
materials from industrialized countries to weakly-developed countries create
the most favorable prospects for trade with these countries. This trend
is most proper. However, we must remember that progressing industralization
will require imports of further significant quantities of machines and
equipment from highly developed countries, which, undoubtedly, will force
us to make great efforts in this sector. This is not a simple problem,
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and if we take into consideration the processes of economic integration
that take place in highly-developed capitalist nations., and the tariff
and credit policies connected with this then it certainly is difficult.
Joining GATT will not most likely solve this problem. As soon to there
are prospects of exceeding turnover with undeveloped countries, then the
problem of maintaining the present turnover level with capitalist
countries becomes real.
Discarding the false theory that turnover with these countries will
decrease, we now should place particular emphasis on the following two
elements in trading with these countries:
1. The conclusion of long-term pacts. For example, we all know
that in the near future lumber imports will be increasing. But, require-
ments for lumber in all of Europe will also be increasing. It is not
appropriate to start creating conditions today to ensure this import.
The situation is similar with Swedish ore. As is known,, a long-term coal
contract is now being discussed with Austria.
2. Of even greater importance is the problem of cooperation between
countries of our camp. This especially means the necessity of broadening
the cooperation between our countries through bilateral and multilateral
pacts. Of no less importance is the necessity for cooperation in third
markets. For example, the cooperation of Poland with Hungary and with
Bulgaria would be very useful in the export of agricultural food commodities
to Austria. It is known that these countries have, in comparison with
us, a higher profit because of a more favorable location to Austria. Hence.,
a proper solution of this problem through meetings could perhaps ensure
better conditions for us.
The problem of cooperation within the framework of CEMA should become
a closer one to all of us. Therefore, it is necessary that counsellors be
informed about the sessions of CEMA,, and about the proposals that the
Polish delegation plans to present.
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SUMMARY OF THE DISCUSSION - Minister W. Trampczynski
The conference is coming to a close; however, I would like to
mention several problems which were mentioned in the majority of the
speeches. I would like especially to emphasis those problems pertaining
to the future of our trade turnover.
1. The Problem of trade turnover increase.
The first basic problem that the Ministry should consider and deal
with is the steady increase in turnover as a whole -- with all countries.
Considering the problem of prices, since they will have an influence on
the increase or decrease of the turnover, it seems that a 10-15 percent
increase in comparative prices will occur in the permanent price indexes.
It seems that in the previous period this increase was law, because of
known reasons. According to figures given by the Geneva Economic Commissions
.Poland in this sector is probably the last country in Europe on the list,
and in our camp, too, it remains far below Bulgaria, as well as a number
of other countries. This is a problem of percentage increase of our
turnover. Percentage wise, the increase in the turnover of almost every
country in our camp is higher than the increase in the production of
national income. We are the only country in which the situation is
reversed.
The first proposed long-range plans maintained a similar trend, one
of very slow development. However, the matter has now been established
in our economic management that turnover has to be significantly increased.
The entire Ministry must prepare for these tasks. Also, the attitude of
the people and the press should be prepared somewhat toward this. If
we import a commodity which, at the same time, we export, then we have
long demagogic articles on this subject, commenting that we needlessly
spend foreign exchange.
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As far as our camp is concerned, it seems that in recent period we
have made efforts in this direction which are now producing favorable
results.
The trend of the initial long-range talks, of the visits of
party-government delegations, and of Moscow talks, is clearly toward a
significant increase in internal turnover of the camp and it should
be based on a far-reaching specialization in economy and on mutual
coordination. We have to overcome certain elements of particularism
which frequently appear in our industry, that is, the idea that we
must produce everything; nothing must be imported; and industry must
be expanded to produce every possible assortment. Unfortunately, it is
impossible to produce everything. A good economic example is the fact
that the greatest turnover is usually between countries that are highly
industrialized. Large industries in the USA, West Germany, and
England, -- and many West European countries -- do not place obstacles
in order to hinder a high turnover between their respective countries.
The same attitude should be within the socialist nations sphere.
The counselors should thoroughly explore their markets. In talks with
industry, we must aim at fulfillment of that which was signed and
approved in talks between delegations, in party and government meetings,
and at the Moscow conference.
A significant increase in turnover, an increase in specialization
and cooperation, and a reduction of production costs are the ways to
increase national income. This is not a simple problem; there are
certain habits, the necessity of starting production, and the need for
certain investments -- all opposed what has been said above. But this
is necessaryj and we are going to travel this road.
2. Development of relations with economically-backward countries.
Another problem which deserves some attention is the expansion of
our relations with economically backward countries.
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We talk and write much on this subject.
The great majority of our raw materials, however, is not purchased
at places where they are cheaper, or where our machine export can be
directed. Ordinarily, raw materials are purchased at the most accessible
points; places that we have become accustomed to. This is another problem
that we have to consider. And in particular many obligations in this
field rest on our representatives in trade posts.
It seems to me that neither an expansion in the turnover in our
camp, nor an expansion in the turnover with economically undeveloped
countries can, or should, or does reduce the turnover with better-developed
capitalistic countries. The erroneous theory persists that if we increase
the turnover with our camp, then the turnover with economically developed
countries will drop. This is not true.- On the basis of research
conducted by the State Foreign Trade Institute and the ministry, it has
been confirmed that the possibilities for developing the turnover are
so great that expansion of turnover with our camp will definitely not
cause a drop In turnover with more developed countries. We will and
want to be closely connected with economically developed countries. We
want to expand this turnover. We need highly efficient machines and
licenses, as well as all kinds of commodities which can be bought only
in those countries, and which will modernize our industry. Therefore we
cannot subscribe to the theory that by increasing turnover within our
camp, we reduce turnover with these other markets.
This problem Is the one which usually seems to deeply affect the
western press. This is the first question that journalists ask me and
the workers at the Ministry of Foreign Trade. This theory Is incorrect;
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and although certain economic circles in the west may be enthusiastic about
it, we must fight it by word and deed. The proposed plans for the next
few years envisage no drop in turnover in these markets; in fact, a marked
increase can be seen. If this is so, then we must consider what we will
sell, and what we want to sell in order that the turnover may increase.
3. Problems of Export
a.
Coal always heads the list of our exports. Despite pessimistic
statements on this subject by a number of counselors, we will export
coal; we have coal for export and every effort should be made to maintain
coal as the basic commodity for some time to come. In this direction,
we have accomplished much and we have changed the policy of prices, and
we have improved the quality. In the near future, there will even be a
greater improvement. We will designate special coal mines that will extract
coal for export; we are creating special organizations which will export;
and we are establishing special quality control. We have expanded the
"Weglokoks" network. We start out in each country with sales running
not into billions of tons, but running into thousands of tons of coal.
Traditional markets and trends are changing. (At the present time, we
should strive to create permanent sales markets, not repeat past errors.
Therefore, in spite of American competition, we must maintain our coal
markets. Of all the European coal industries, we have the lowest production
costs, which is the greatest competitive power. Up to now, we have the
possibility of American coal competition. (With proper effort, there is
nothing to prevent maintaining, or even increasing, the coal supply and
sales on the European market]. As an example, many markets can be cited,
such as Denmark, Finland, Italy, Greece, and Argentina, on which the
turnover did not drop, but increased significantly. All theories on the
non-competitive power of Polish coal are wrong. It is a cover for our
failure] this can frankly be said here.
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b. Machines and equipment
The next commodity group in export includes machines and equipment.
The general opinion,, is that we have attained much--more than we expected
a year ago--in this field during the recent period. Last year's conference
of counselors was the turning point for this subject. This year,
everything that industry has supplied has been contracted for; and we
have a number of spheres reserved for succeeding years. At the moment,,
the problem is the adjustment of our industry to the needs of foreign
trade. This problem is difficult and to a greater extent rests on industry
than on us. If these tasks are not fulfilled soon, then we could possibly
lose our machine trade.
I draw attention to the problem that we all--in the ministry and the
trade posts--must be specially conscious of. We must do everything possible
to maintain good quality and scheduled deliveries. At the moment, this
is the basic problem of our machine turnover. It most certainly would be
a bad joke to say that the reason our machines sold so easily on some
markets was that their reputation did not as yet precede them. We can be
certain that if in this early stage we will start to supply bad machines,
then we certainly will lose the markets. The problem of the quality of
goods and of timely deliveries is our constant task, in addition to
energetic and effective canvassing. All deliveries should be carefully
watched and each bad delivery should be reported. For this task., we make
the counselors responsible. This is a very responsible task, considering
that today our exports amount to over a billion rubles and that each year
they increase. Machines will be one of our basic export commodities. I
speak of machines and equipment, as well as of complete factories and
plants. In the broad sense this means the variety of commodities under
the management of the Department of Machines and Equipment.
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I want to draw attention to this problem, and to emphasise it
clearly. Today our export of machines and equipment is extensive, but
its specialization has been weakly defined. In the initial phase of
the development of export, there was a broad assortment and this was
fully understandable. Our specialization is now clear in the sector
of floating stock and railroad rolling stock. This is, however, too
little for our production possibilities. At present, we should strive
toward specialization in our machine export. Here, the trade missions
can be of service by carefully watching to see which machines are of
higher quality, which machines have prospects for expansion, and in
which branch of industry special investment efforts should be made.
I ask that you please devote more space to this problem in your
reports.
The next problem that needs attention is the erroneous "theory"
that machines cannot be sent to countries that are better economically
developed than ours. There are entire series of types of machines that
could be, and should be, exported to England, France, and West Germany.
In this situation, we are somewhat timid.
c. Agricultural food products
I will next talk about agricultural food products for export
purposes. In succeeding years, our agriculture will be constantly
increasing the quantities of these commodities. However, the kinds of
commodities that are exported are extremely primitive. There is a
lack of conserves and hams, but we have pigs, livestock, butter, lard, etc.
In Poland, we are making great efforts and a large part of the American
.loan is directed to this sphere. Important investments have been started.
We must remember that in the coming year, there will be an important
improvement in this commodity group. The trade counselors should indicate
the needs of the markets for agricultural food products.
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d. Miscellaneous commodities
We have.become accustomed to talk about coal and machine trade;
however, we should not forget that there are many countries that do not
export coal or machines, yet these countries have a greater turnover than
we do. We have great possibilities of developing trade in miscellaneous
commodities. According to the State Foreign Trade Institute, we now
have a broader assortment of commodities for export than we had before
the war. We have further possibilities for increasing the assortments
for export. To achieve this, a number of economic moves are needed within
Poland. This will be a slow job, but some results have already been
obtained. The results obtained include the export of fresh vegetables,
fruits, greens, and a few other products. Here, too, we specially need
the help of counselors. These are new commodities of export, and the
entire Ministry is devoting much attention to them. If we were able
to organize the export of coal and machines, then, I am sure, we will be
able to manage the export of miscellaneous commodities. The range of
commodities is very broad, ranging from books and vegetables to chemicals.
4. Problem of import.
Raw materials do and will continue to occupy the leading position
on imports, followed by machines, equipment, licensee, etc. The theory
.that we can satisfy the demands of our expanding industry with machines
produced by us is erroneous. Entire series of'these machines will come
from markets of Western Europe. Each year our imports of machines will
increase. Particularly important are licenses and new machines, permitting
us to modernize our industry. Here I want to call attention to an incorrect
theory--the theory of various priorities--which arose under certain
conditions and did such harm to us. Atone time this theory protected
the Ministry from unjust charges. This theory should now disappear.
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5. The problem of the activities of trade missions abroad.
We cannot view the problem of foreign trade turnover from the
viewpoint of each year separately. It is necessary to view the prospects
over several years. This is tied in with the problem that I want to
bring to attention. Other speakers stated that the duties of a trade
mission are not entirely clear. Let us not request that a new
directive, or instructions be issued which would systemically outline
everything that a trade counselor must do. We do not want to enclose
this problem in some kind of schematic structure. The role of a
counselor in countries of our camp looks different from that of a
counselor in capitalist countries. The problems are different in
somewhat backward capitalist countries, than those in economically
developed capitalist countries. In each country, the situation is
different. We ask that a counselor be an extended arm of the Ministry,
and that he implement trade policy. We should also bring to attention
the problem of financial and credit policies. We do not have bank
representatives, and this sector is greatly neglected. We should
.remedy these negligences very soon. A trade worker should also be a
financier. All of us have had experience in negotiating with a
West European purchases. The missions have to study the market and know
its organization, have to supply us with data from the market, and have
to inform the central offices of foreign trade the demands of the market.
Should management be conducted in a bureaucratic way? No- Never'!
Should the central offices of foreign trade be hampered in their
activities? -, Never! At one time, they criticized you -- now you
criticize them. At one time it was vice-versa. New methods of
operations must be found if a central office does not subordinate itself;
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you have effective means; you approve the invoices; you are the
authority; if you do not approve an action of the central office, the
matter will not go through. You have the ministry behind you; you can
notify us about these matters; however, not in laconic codes, but in
letters. Codes are not always the best means of coming to an understanding
because full explanations cannot be made in them. The present organizational
structure is adequate enough to enable the counselor to have the market
under control and to expand the turnover. A good trade consellor cannot
limit himself to acknowledge of only his own market. If the central
foreign trade office maintains there are better prices on another market,
we cannot demand that it sell on its own market regardless of the cost.
Also, there now are markets to which we export., and from which we will
import. There are markets that we do not want, and we will not import
from them. We must increase our purchases from the English market, and
we will do this at the cost of the Swiss market, which does not purchase
from us, and we support this. Likewise with Bulgaria. We will not
support them, if they will not buy from us. At the present time during
the recession period, western countries will be making bilaterial
transactions. This form does not seems successful to us, but in a
recession period it has application.
6. The Problem of Credits.
Deputy Ministers Kutin and Modrzevski both mentioned this problem;
I would like only to emphasis that we want credits and we will take
them, but we must be certain of their payments. We will not take credits
from ,countries that we do not export to even though the conditions be
favorable because there is always a limit to credit capacity. Particularly
in this can trade counselors help us. There was a time when the western
press as always writing that "Poland is seeking credits," now the time
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has come that the West writes "Poland does not want credits." This is
not tune: We want to take credits, but we must tie them in with our
export.
7. Relationship of trade counselors to central foreign trade offices
I have brought this to attention before, but I would like to
return to this subject because there is always some doubt about this
matter. Undoubtedly, the manager of a market is the trade counselor,
and In this area nothing should happen without his knowledge. To know,
does not mean, however, to replace the central foreign trade offices
or their management. To know means to give full initiative, and to look
favorable on their operations. If these operations are bad, then help
the central office, but do not replace it. No central office would be
opposed to such a system. Today's meeting we will extend to the central
foreign trade offices, and we will talk with them on these subjects. We
ask that counsellors watch when the central office are operating
improperly, but in doing this I ask that they remember the following:
1. Not to thserve the operations of the central office only from
the viewpoint of our market, but also to observe the other markets, the
situation as a whole, and turnover possibilities.
2. To observe closely when the central office reached a point that
we consider further activity would be harmful. It frequently happens that
a delegate has not as yet arrived and he is criticized beforehand that he
behaves badly. Our opinion is that delegates of the central offices are
lead too much by the hand by counselors; we should give them more
independence.
We ask that your relationship with the central offices be one of
care and concern about proper economic policy, and not one of formality
'and administration.
I now conclude the conference, and I thank all the participants for
participating in the. discussion. I wish you continued success in your work..
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