(3 of 3)
Rice for Rubber. But for all their heady talk of a Great Eastern Market, waiting to absorb Western Europe's exports, the Communists have notoriously failed to keep their side of the trade bargain. Eastern Europe's contribution to Western Europe's coal imports has dropped from 22% in 1949 to a mere 12% in the first half of 1952; the 20-billion-francs Franco-Czech trade agreement of 1952 worked out at less than 3 billion. "Politics apart," says the London Economist, "the main barrier to any expansion of East-West trade is the sheer inability of the Communist bloc to provide anything suitable in exchange for increased exports from the West."
Worse still, the Soviet traders regard trade, like war, as an arm of policy, and demand strategic, not monetary profits. To win strategic metals and machinery for their Five-Year Plans, Peking and Moscow offer up to ten times the going price for nickel and ferro-molybdenum. One Red satellite agreed to take Norwegian herrings, but only if Norway would also sell strategic ores. Red China's trading weapon is the rice it extorts from hungry Chinese peasants. By offering rice to the Ceylonese, the Reds got a promise of 22,000 tons of rubber (TIME, Nov. 3). Rubber may be strategic for the Chinese, said Ceylon's Premier Dudley Senanayake, but rice is strategic for Ceylon.
Up to Washington. Undismayed by the cynicism of Soviet trade practice, a U.N. survey team concluded last year that an approximate return to the 1938 pattern of East-West trade would save Western Europe roughly 300 million precious dollars every year. Such a prospect, however visionary, moves hardheads as well as softheads in Europe's factories. But the decision inevitably lies with the powerful U.S. A substantial increase in East-West trade would irrevocably strengthen the Soviet empire, a prospect which the U.S. and its Allies deplore and hope to prevent. Yet Europe and Japan need larger markets to live. Africa will help: it is already absorbing four times as much from Britain, six times as much from France, seven times as much from Belgium as it did prewar. The decisive market remains North America, site of well over half the free world's purchasing power. "If you buy more from us," Britain's Ambassador Makins told the Detroit Economic Club last week,"we can continue to buy your wheat, your cotton and your tobacco . . . If not, we shall have to . . . buy [our] raw materials and food from countries who are willing to accept our goods in exchange."
-Yet though U.S. traders may not legally sell to China, they may buy from her. Last year the U.S. incomprehensibly allowed its importers to pay hard cash for $27.8 million worth of Red Chinese exports—more than three times the amount purchased by Britain. Peking could use the dollars.