Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.
2. THE UNITED STATES AND THE FEDERAL REPUBLIC OF GERMANY: DIFFERENCES AMONG ALLIES1 Drawing on interviews and writings by West Germans, this section briefly summarizes --from the F.R.G.'s perspective-- _ major differences which have historically divided West Germany from the U.S. in its attitudes towards CoCom. A review of these factors is important since many of the respondents felt that the F.R.G.'s position is often not adequately understood in the U.S. More importantly, most of the current conflicts between the two allies over how to respond to the recent developments in the East have their roots in historical differences which have existed almost since the inception of CoCom. These differences between the U.S. and the F.R.~. reflect a variety of factors, including fundamental dissimilarities in their approaches to East- West relations; their divergent roles in the international political arena; dissimilarities in their external economic relations; and West Germany's unique situation 1 For more on these differences see for example, Heinrich Vogel, East-West Trade and Technology Transfer Reconsidered, Bundesinstitut fur ostwissenschafttiche und internationals Studien, mimeo Spring 1990; Reinhard Rode, Sanktion und Geschaft die OstwirtSchaftspolitik der USA unter Reagan, Frankfurt, 1986; Hans - Di eter Jacobsen, D i e oat-west Wi rtschaf tsbe z i ehungen a ~ s cleutsch-amerik~n~sches Problem, Baden Baden: Nomos, 1986; Claudia Wormann, Osthandel, als Problem der Atiantischen Allianz, Bonn: Europa Union veriag, 1986; Reinhard Rode and Hanns-D. Jacobsen feds. ), I;s:onomic Warfare or Detente, Boulder: Westview Press, 1985; Enrich Vogel, "Alternative westliche Strategien in den Wi rtscha f tsbe z i ehungen mit Osteuropa: die europa i sche Perspektive," in: H.-H. Homann and Heinrich Vogel feds. I, Osteuropas Wirtsca :~-sprc:,bleme und die Ost-West-Bez iehungen, Ba~len-Baden: Nomo. 1984; Angela Stent, Technology Transf er to the Soviet Unicorn ~ .-; challenge for the Cohesiveness of the Western Alliance, Bonn: Europa Union Veriag, 1983.
as a divided country in close proximity to the Warsaw Pact. 2.~. The Political Dimension From a West German perspective, there have been two critical political issues which have created discord within the alliance. The first relates to each country's fundamental beliefs, both with respect to the nature of the East-West conflict, and also with regard to the policy responses which are required to contain that conflict. A second divisive issue has been the question of whether export controls should be used as foreign policy instruments in the form of economic sanctions. 2.1.1. Nature of East-West Relations: Creative Cooperation vs. Destructive Antagonism The West German government has always shared the Americans' conviction that the transfer of militarily critical goods and technologies to the East should not be allowed. At the same time, it has historically considered East-West economic cooperation as an integral part of its overall relationship with the East. This approach to East-West relations has its roots in the two-track strategy first set forth in NATO's Harmel Report of 1967, and later reaffirmed in the CSCE process, which culminated in Helsinki Final Act of 1975.2 This two-track strategy 2 The Basic formula of the Harmel report says: as much cooperation as possible as much security as necessary; the Helsinki Final Act and the final document of the Vienna follow up conference in 1989 both state that technology can have a positive influence on the future security of Europe and that a pan-
emphasizes the importance of East-West economic cooperation within the overall framework of alliance security. In the words of Hans-Dietrich Genscher, foreign minister of the Federal Republic, "We do not want a technological division of Europe. We want to leave the option for technological cooperation open for our Eastern neighbors. It goes without saying that this cooperation must be conducted in full accordance with our security interests "3 The West German government has always worked to develop a network of economic relationships with the Eastern bloc, with the aim of creating mutual dependencies which in turn would heighten the interests of both blocs in improving their political relations.4 Economic interdependence was considered to generate spillover effects into the political realm of international relations. These spillover effects were intended to reinforce and deepen the po ~ iti ca ~ re ~ at i onshi ps between the two bI ocs, a nd european technology program would be an appropriate contribution to overcome the division of Europe. 3 Speech by Hans-Dietrich Genscher' September 20, 1989, cited in Jurgen Notzold, "Technologie in den Ost-West Beziahungen, dais Politik und Zei~geschichte, B2' January 1, 1986, p.l7. 4Hans-Dietrich Genscher, "Towards an Overall Strategy for Peace, Freedom, and Progress," Foreign Affairs, ~lol.6l, No.1, especially section IV (Fall 1982), pp.42-66; Richard v. Weizsacker, "Nur Zusammenarbeit schafft Fr~eden' i' Die Zeit, No. 40, August 30, 1983. 6
build confidence between previously antagonistic alliances. 5 This does not mean that trade was seen as ending all conflicts, but that it was ~ necessary condition for the maintenance of peace and the restraint of Soviet arms build up. While most Europeans subscribed to this approach, it was initiated and given special importance by the F.R.G.6 Of all European countries, the F.R.G. has the largest political, economic, and security stake in Eastern European developments. Economic cooperation is seen as an instrument to alleviate the negative consequences of Germany's division and to create a modus vivendi with its Eastern neighbors.7 In the eyes of West German policymakers, the economic dimension of East-West relations is an important instrument in improving the Federal Republic's overall 5 This follows closely the functional approach to international relations. See for example David Mitrany, "The Functional Approach to World Organization," International Affairs, Vol.48 (1948), pp.350-60; A.J.R. Groom, "The Functionalist Approach and East/West Cooperation in Europe," Journal of Common Market Studies, Vol.13 (1975), pp.21-60. 6 An important watershed in this approach was the beginning of Ostpolitik under chancellor Willy Brandt in 1969. Improved economic relations had been a goal of the private sector long before then. In 1952, for example, led by an initiative of the CDU government the Committee on East West trade was formed and in 1958 the Adenauer government concluded its first trade agreement with the USSR. For more on this see Angela Stent, From Embargo to Ostpol itik : The Political Economy of West German-Soviet Relations, New York: Cambridge University Press, 1982. 7 West-Germany's special position became apparent when it became a member of CoCom, five years before becoming a sovereign state. It was much debated at the domestic level since membership in such an organization could provide a definite end to the prospects for unification. However the fear of the Soviet threat (Berlin Blockade 48/49) was greater and the F.R.G. joined the Gentlemen' Agreement, however, with the hope of getting its view adequately represented. 7
politico-military relations with the East, and can even contribute to an increase in national security.8 The widespread consensus within the F.R.G. over this strategy is reflected in its remarkable continuity for over two decades, despite the changes in the West German governing coalition and the substantial fluctuations in the international climate between the superpowers.9 All in all, then, the West German approach with respect to East-West economic relations is probably best described by emphasizing its cooperative nature. In light of the present changes underway in the Eastern bloc, the F.R.G. is simply reaffirming its traditional approach of positive linkage and is thus eager to take advantage of the opportunities to support the political and economic transformation occurring in Eastern Europe and the Soviet Union. This strategy of positive economic linkage stands in stark contrast to the U.S. approach. Contrary to the West German, the U.S. strategy until 1989 was directed towards the international isolation and the domestic destabilization of the Soviet system of domination. As one West German scholar noted, "With the 8 Jurgen Notzold and Werner Beitel, "Die Bedeutung des Technologie Transfers in den Wirtschaftsbeziehungen mit der Sowjetunion," Osteuroga, Vol. 5 (19831. 9 For more on West German Approach to East West economic relations see for example, Angela Stent, "The Federal Republic of Germany", in Reinhard Rode, Hans-Dieter Jacobsen, Economic Warfare or Detente, Boulder: Westview Press, 1985; Hans-Dieter Jacobsen, Die Os--West Wirtschaftsbeziehungen als deutsch- amerikanisches r. olem, Baden Baden: Nomos, 1986; Hans-Dieter Jacobsen, "East--- at Trade and Export Controls: The West German Perspective," in. Mary K. Bertsch, ea., Controlling East-West Technology Transfer, Durham: Duke University Press, 1988;
exception of the Nixon-Kissinger and the early Carter periods, U.S. East-West trade policy has been the opposite of the F.R.G.'s-- destructive and antagonistic.''l° Thus, while U.S. economic relations with the East Bloc are used to further political goals, they are often not utilized to achieve positive linkage through economic cooperation, but rather to apply negative linkage through punitive economic sanctions. The U.S. did on occasion utilize economic relations as a form of positive linkage, extending trade benefits to selected East European nations as a strategy of "differentiation". But this positive economic linkage strategy was entirely different form that pursued by the F.R.G. Unlike the F.R.G., the U.S. saw the economic benefits it provided to the East as provisional and revocable, to be extended only in return for good behavior and to be withdrawn at the first sign of difficulty or friction in East West relations. Thus while the U.S. traditionally saw economic relations with the Eastern bloc as an instrument of reward or punishment for specific actions, the F.R.G. pursued improved economic relations with the Eastern bloc with little strings attached and few qid pro quos. For the most part therefore, the U.S. has not viewed East-West trade as mutually beneficial. Instead Much trade has usually been portrayed as one-sided, inherently concessional, and morally questionable.''ll 10See Jacobsen ( 1988 I, here p. 162 . 11 Angela E. Stent, Technology Transfer to the Soviet Union: A Chal],enge for the Cohesiveness of the Western Alliance, Bonn, Europa Union Veriag, ~ 98 3, here pp 10 7-8 . 9
These differences over East-West trade are rooted in broader disagreements between the two allies with regard to the purpose of detente. As one respondent described it, "since the memoires of Kissinger we know how deep seated the dissens was between them The U.S. and the F.R.G.] as regards the nature of detente. For us f the F.~.G.] detente was always the reduction of tensions between East and West; for the Americans on the other hand detente was the continuation of old policies with new means, and the old policies meant the containment of the Soviet sphere of influence.''l2 2.1.2. Cocoa AS An Instrument of Foreign Policy The second dimension In the political sphere is the role of economic sanctions. There is almost unanimous agreement in both the public and the private sector in the F.R.G. that economic sanctions against the Eastern bloc are ineffective.l3 The West Germans view sanctions as ineffective partly because of the relatively small degree of economic interdependence between the Soviet Union and the Western alliance. In the words of one high ranking West German official: "In light of the small involvement 12 Interview; another area where these differences have also come to be ref lected in the different approaches of the two allies to the CSCE and their valuation of these processes, see for example Jurgen Notzold, 'iPolitische Vorausset~ungen der Wirschaftsbezishungen zwischen West und Ost", . 13 For a discussion of the limits of American economic pod'? as a political instrument, see Jorg Boltersdorf, Die Grenzen v=- Wirtschaftsmacht, Berlin: Quorum Verlag, 1989; see also Jacobsen (1988), pp.174-78. 10
of the Soviet Union in overall East-West trade, East-West economic relations are not a suitable mechanism to influence important political questions such as expenditure for arms, third world engagement and human rights by eliciting Soviet through withdrawal or refusal.~14 Others have gone even further, assert-in" that "the notion that the Soviet Union is dependent on the West in the scientific and technological arena is absurd.~tiS Moreover, since economic sanctions are mostly reactive --in the sense that they respond to previous actions-- West German policy makers contend that they do not provide any constructive impetus for changing the future actions and attitudes of the Eastern bloc countries.~6 Another contentious point is the U.S.'s handling of Peoples 14 Jurgen Ruhfus, "Die politische Dimension der Wirtschaftsbeziehungen zwischen Ost und West,'' Europa Archiv, Vol.42, No.1 (1987), here p.5. 153uregen No~ziod and W. Beitel, "Die Bedeutung des Technologietransfers in den Wirtschaftsbezishungen mit der Sowjetunion," Europa Archly, No.2 (1983~; see also Heinrich Vogel, "Die Embargo-Politik der USA gegenuber der Sowjetunion nach Afghanistan. Erf ahrungen und SchiuBfolgerungen," Europa A~chiv, No.20 (1981) and The Politics of East-West Economic Relations Reconsidered: A German View, Koin: Bundesinstitut fur ostwissenschaftliche und internationals Studien, 1982. 16Stent t1985) op. cit. note. Recent U.S. policy towards the Soviets with regard to the Lithuanian economic embargo, however, indicates the possible changes in the weight attached by previous administrations to economic sanctions to enforce behavior. Three Factors seem to have influenced U.S. decisions to forgo for the time being any economic sanctions towards the Soviet Union: a more long term outlook on the current political and economic transformations occurring in the Eastern bloc; the ineffectiveness of economic sanctions towards the Soviets; and thirdly the position of its West European allies especially France and the F.R.G. l
Republic of China (PRC) in CoCom.l7 West Germany has little understanding for the U.S.'s position of continuing the preferential treatment of China after the developments in June 1989, while at the same time not giving sufficient recognition to the revolutionary changes in Eastern Europe and the Soviet Union. (see also 2.2. The Economic Dimension and 3.3. The Soviet Union).18 As one official stated "where do you think China would be an the control list if we made human rights --which the U.S. always applies to the Soviet Union-- a criterion for China?''l9 By applying Cocom in such a selective manner, the U.S. raises the suspicion that "U.S. policy is not anti-communist but anti-Soviet, revealing a reductionist view of the systemic conflict between East and west."20 In other words, the American position reflects a limited view of the global balance of power, rather than an enlightened leadership of the Western alliance. 17 For background on the Chinese role in U.S.-Soviet relations,see Raimond L. Garthoff, Detente and Confrontation erican-Soviet Relations from Nixon to Reagan, Washington, D.C.. The Brookings Institution, 1985; R.S. Ross, "International Bargaining and Domestic Politics", World Politics, Vol.38, No.2 (1986), pp.256-87. is The maintenance of the Status quo towards China has been reaffirmed in the latest high level Cocom meeting in February. Reasons given for such a policy include the good export opportunities for the U.S. and Japan, "USA bleiben im Cocom hart," Nachrichten fur Aussenhandel, October 30, 1989; "Neue Lage fur Cocom," Handelsblatt, 10/3071989; "CoCom to update restrictions," Financial Times, October 5, 1989. 19 Interview 20 Reinhard Rode, "US-Technologietransferpolitik gegenuber der UdSSR und der V~ China: Weltmachtpolitik im Dreieck," Osteuropa-Wirtschaft, Vol.32, No.1 (1987), pp.60-84. 12
The policy towards China clearly shows that the U.S. interprets the Cocom principles as it sees it opportune, and pursues its own geostrategic goals while disregarding the interests of its allies 21 Eventually, U.S. policy towards the PRC likely to lead the Europeans to respond by acting in a unilateral as well, reflecting their own specific security interests even in opposition to the U.S. Thus, while the U.S. policy might have put pressure on the Soviets in the short run, in the long run it increased the freedom of action for both China --which can now produce many items on the CoCom list itself-- and for the Europeans, who can justify unilateral action in the future.22 Finally, it remains to be seen whether the U.S. has not overemphasized its relationship with China at the expense of its relationship with the USSR. 2.2. The Economic Dimension In the economic realm, three issues have been sources of tension between the F.R.G. and the U.S. The first is whether and to what degree the U.S. has used its hegemonial position in Cocom as an instrument to further its commercial interests. The second is the F.R.G.'s liberal attitude towards foreign trade as an 21Reinhard Rode, "Wiviel Exportkontrolle? COCOM auf dem Prufstand?n, Osteuropa Wirtschaft, Vol.34, No.1 (1989), pp.l-23. 22 For example, contrary to the U.S. perspective as a world power, Europeans have always had relatively limited, regional political aspirations and expectation of detente which could lead to a different assessment of Soviet policy. 13
open, trade dependent economy. Final ly, there is the issue of West Germany' s strong economic ties with the East, ties which ref lect Germany's geographic location in the center of Europe . 2 . 2 .1. CoCom As An Instrument of Commercial Policy The argument that export control s have also been used as an instrument of commercial policy is not a new one, and has been made by almost all members in Cocom.23 The most frequent charge made by the F.R.G is that the U.S. is using its dominant role in CoCom to advance its economic interests, and that the U.S. gives its firms a competitive advantage by either denying or delaying other Cocom members' requests for exceptions.24 This is particularly evident with respect to the machine tool industry, where "the embargo is applied in its most stringent form because 23 A study for the Ministry of Research and Technology lists the major impediments for the technology transfer between the United States and the western countries. The study emphas i zes that the result of the restrictive practices of the U.S. with respect to technology f lows to the Soviet Union can render the access of western countries to U.S. technology more difficult, W. Hein, Beschrankungen des internationalen Technologietransfers durch die USA -- Auswirkungen auf die Innovationsentscheidungen deutscher Unternehmen, Studie im Auf~rag des Bundesministeriums fur Forschung und Technologie, Washington, D. C. 1984, cited in Jacobsen (1986) op.cit., here p.280, note 54; see also the statement by former Undersecretary of Commerce Lionel Olmer, "Commerce international de haute technology: la menace protect) one ste, " Europe, Samedi 1 5 f evri er, 19 8 6; " D1W: Osthande l wire vom Protektionismus bedroht," VWD, November 13, 1985; "Tindemans warns vor Beschneidung des Technologie-Transfers," LEWD, February 7' 1986. 24Michae] Mastanduno, "The Managment of Alliance Export Control Policy: American Leadership and the Politics of CoCom," in Gary Bertsch (1988), op.cit., here p. 259 cons; see also Rene Herrmann, Berichte cles Bundeinstituts fur ostwissenschaftI iche unct internationals Studies, No. 32, 38 ,and 39, 1986. 14
the U.S. cannot compete with the F.~.G.."25 This embargo prevents the Federal Republic, whose machine tool industry is the world's most competitive, from capturing the Eastern European and Soviet market, and also allows the U.S. to limit the overall world market position of the West German machine tool industry.26 Question about commercial policy were also raised in conjunction with the establishment of the Chine green line, where compared to other communist countries, the U.S. has a strong market position. As one official from the current government stated, "you really must raise suspicions that this is not a CoCom issue but a commercial one. Take the Chinese case, where security questions in the past and today are of a similar relevance. The U.S. administration is proving very flexible if commercial interests are involved.~27 And as another official pointed out, "in comparing the U.S. policy in CoCom towards China and the Soviet Union from a European perspective, you cannot avoid asking the question, why the PRO, which represents a considerable market for U.S. manufactured exports, finds itself in category V of the [CoCom-] list, while the U.S. which is a major exporter of agricultural but not industrial goods to the Soviet Union, continues to unilaterally boycott any significant 25nCoCom-- ein Relikt des kalten Krieges zwischen 0st und West,'' Frankfurter Rundschau, November 29, 1989; see also "Expor~kontrollen fur PC in USA gelockert," Nachrichten fur AuBenhandel' August 29, 1989. 26 Interview with government officials and representatives fore the industry. 27 Interviews 15
liberalization for the Soviets. including those was hurt by the ..28 Yet with the exception of these two cases, many respondents, in the private sector, agreed that U.S. industry Cocom lists as much as European firms.29 Most respondents saw no indication that the U.S. has used CoCom in any systematic way to further its own economic interests. Considering the fact that the U.S. export control list is even more restrictive than those of its partners, and that until recently the U.S. was the worId's largest high technology producer, it is likely that U.S. industry suffered even more than fact that the U. S However . export control list is ever ikely that U.S. European firms in past years.30 However, this situation has changed in the last few years as the U.S. has begun to loose its leading position in the high- 28 Interview; the value of trade between the US and PRC increased dramatically during the decade from less than $1 billion in 1980 to 514 billion in 1988. High-tech exports increased from a mere $100 million at the beginning of the decade to more than S5 billion by 1988, with more than $l billion commercial aircra f ~ and al rcra ft components becoming the third leading export to the PRC after wheat and lumber. In addition the progressive liberalization encouraged high technology companies to establish joint ventures in China (Wang, HP, United Tech., and McDonnell-Douglas). By the time of the Tiananmen Square massacre, the PRO had developed the capacity to produce its own 32-bit micro-computer (from Western Components) and manufacture semiconductors down to an accuracy of 2 to 3 microns, Paul Freedenberg, Technology Transfer Policy in Period of Change, mimeo, 1990; see also "Cocom-Erisichterungen in China Handel," Neue Zuricher Zeitung, 3/4/1989. 29 Interviews. 30 Hans-Dieter Jacobsen, "Legitime Sicherheits Interessen welt uberzogen," in: "Die Verf~uchte Cocom-liste," Blatter fur Deutsche und Internationale Politick. ; see also the contributions by Klaus Richter and Paul Zieber, both representatives of the private sector, in the same issue. 16
technology field.31 As one specialist on East-West economic relations noted, "the declining performance of the U.S. as an exporting and technological competitor reduces the weight of security arguments tabled in Cocom by its negotiators, even raising doubts with regard to the distribution of costs and benefits for Western countries stemming from export controls among their economies."32 This declining U.S. competitiveness in the global market place is reflected in recent reports that advocate the continuation of export controls in light of the fact that the Soviet Union could be a potential economic competitor.33 But regardless of whether the U.S. has used its dominant role in Cocom as an instrument of commercial policy, all respondents insisted that there is little use in arguing over past disputes, given the urgency of the challenges presented to the allies in responding to the recent developments in the East. In this context, many respondents expressed their concern that the newly granted exceptions, and the accelerating liberalization process which has been undertaken in response to the developments in the East, be conducted in a manner which avoids discrimination against particular countries and/or industrial sectors. Many 31 "USA verlieren Konkurrenzvermogen bet Hochtechnologie", VWD, October 21, 1986. 32Heinrich Vogel, "East-West Trade and Technology Transfer Reconsidered", Bundesinstitut fur ostwissenschaftliche und internationale Studien, Koin, Spring 1990, mimeo. 33 Interviews; see also "Bush Policy on Eastern Europe: 'Prudent' or 'Timid'?, Washington Post, 10.29.1989. ~7
respondents saw in both the recent granting of exceptions and the liberalization measures a reflection of particular U.S. interests.34 As evidence they cited the delay and eventual approval in 1988 to deliver Airbus planes to the G.D.R. and the Soviet Union only after Boeing had secured similar contracts with Poland and Ruman~a.35 As one news report put it "after all, the U.S. could not refuse to Airbus what they were about to grant to Boeing."36 Finally, the January 1990 decision by the U.S. to agree to the sales of some machine tools raised similar complaints. As one official stated , "our machine too! industry doesn't build these old-fashioned machines [anymore]."37 Thus both the government and the private sector in the Federal Republic consider it essential that a major overhaul of the list will not generate competitive disadvantages for a particular industrial sector due to competitive concerns from another country.38 As some commentators suggested, this could be 34 Interviews; see also 'West Prepares to loosen Strings on High-Tech Exports to Eastlt, Washington Post' 2.1S.1990. These charges come not only from the F.R.G. but also from other European countries especially France. 35"Der Cocom Arger, " Die Welt, February 2, 1990; "Osthandel kampf gegen Cocom, " Der Spiegel , No . 16 ( 4 . 16 . 1990 ), p . ll4 . 36 "CoCom ein Relikt des Kalten Krieges", Der S}; iegel, August 22, 1988, p. 83. 37 Count Hagen Lambsdorff, economic minister at the West German Embassy in Washington, t'East Bloc Pot of Gold, "National Journal, 2.10.1990, here p.316. 38West-German a.. cials are aware of the possible difficulties that th ~.S. defence industry might have in adapting to a sudden 2 jor ~ iberal i Ration of the ~ ist and that this wouic] leave them at a severe disadvantage to compete f or 18
done by linking the liberalization in one industrial sector to that of others. In fact, such a procedure is already being used to some degree in the current review process in Cocom, as the members have agreed that the working groups on computers, telecommunications and machine tools will report back to the Committee at the same time.39 2.2.2. External Trade: Basic Right vs. Privilege Unlike in the United States, where external trade is a privilege which is regulated through a licensing procedure, in the Federal Republic foreign trade is a basic right, 40 and the movement of goods t services/ capital/ and finance is generally unrestricted.4i Export controls are therefore in stark contradiction to the basic principles of the F.R.G.'s external trade relations. These principles have their roots in the importance of these newly opened markets. However, they indicated that, if there are real substantial changes made in the list that it is entirely possible to.delay some of actual implementation to allow U.S. industries to adapt. 39 One official went as far as saying that the F.R.G. will no longer accept any liberalization measures in an individual area but insist on "package deals" that provide equal benefits to its own industry. 40 See Article 1 of the Aussenwirtschaftsgesetz (AWG) of April 2S, 1961. 4\ Section 7 of that law provides qualifications to section 1. These include the guarantee of the security of the Federal Republic, the prevention of the interference with the peaceful coexistence of nations, and noninterference with the external relations of the F.R.G. 19
foreign trade to the F.R.G., whose economic prosperity depends upon its exports. For example, between 1966 and 1986, the export share in GDP in the F.R.G. rose from 17% to 27%,42 Unlike the U.S., which has a large internal market and unfit recently did not consider foreign trade as important, foreign trade has always been considered a critical element in the economic security of the F.R.G.43 Since the role of foreign trade in each nation's economy differs significantly, it is not surprising that governmental trade policies diverge as well. While intervention by the F.R.G. government in foreign trade is considered an exception and often challenged as an interference with a basic right, the U.S. government's intervention in foreign trade is much easier to justify, since trade is considered as a privilege that can be withdrawn any time. 2.2.3. Economic Linkages: Close Ties vs. Goose Interests The economic ties of the F.R.G. with Eastern Europe and the Soviet Union have been of much greater intensity and historical duration than those of the U.S. Historically, the United States has engaged in only limited trade with the Eastern bloc. Between 1985 and 1989 t for example/ U.S. imports from the East averaged $2.1 billion yearly and exports averaged $3.3 billion per year. 42Reinhard Rode, "Handelstaat Bundesrepublik und xportRontrol le", Spektrum der Wissenschaft, March 1990 . 4 3 There are increas i no s igns, however, that wi th the continued g ~ obal i nation of industry and thus the divis ion of labor, f ore in trade in the U . S . is gaining in importance . 20
This accounts for 0.5% all imports and 1.17% of all exports respectively (see Appendix A, Table 11. By contrast, the F.R.G. has been engaged in uninterrupted trade with the Soviet Union and Eastern Europe for centuries.44 These historical trade linkages are rooted in the F.R.G.'s unique geographic and political position in Europe, as well as its considerable dependence on energy imports.45 For example, between 1985 and 1989 the F. R. G. imported goods worth $56 .1 billion that is $11. 2 bit lion per year ant] represents on average 5.1% of all imports. On the export side the Federal Republic shipped goods worth $70 billion to the East which amounts to an average of 5% of all West German exports during that period (see Appendix A, Table 11. The importance of Eastern trade to the West German economy is reflected in the fact that close commercial relationships with the East have always had the support of industry and the leadership in Bonn irrespective of whether a conservative or social democratic government was in power. This long-stancling commitment is demonstrated by the 4 4 The exception here was the period immediately after World Wa r Two and! dur i ng the he i ght o f the co ~ ~ war, Germany was cut off from its traditional sources for trade and industry and was forced to orient its trading relationships to the West. As the cold war is over these old trading links are likely to revived. See Appendix A for comparative U.S. and F.R.G. trade data with CMEA countries. 45 Given that about 60% of the F.R.G.'s energy demand are covered by imports, West-Germany's interest in trade with the Soviet Union concerns not only exports but imports as well as the F.~.G. was determined to diversify it network of energy supply since 1973. 21
multitude of cooperative agreements between the F.R.G. and the Eastern bloc which have been signed throughout the past quarter century. Apart from the intensity of trade with the East, there are also differences in the structure of U.S. and West German trade with the East--differences which encompass both the composition of the exports and the industrial structure of the exporters. With regard to the composition of trade, U.S. exports to the Eastern bloc consist mostly of agricultural goods, while those of the F.R.G. are largely industrial (see Appendix A, Table 2).46 Since agricultural goods are not included in Cocom's concept of "strategic", the exports of the U.S. are much less affected by the Cocom list than those of the F.~.G. The second difference lies in the industrial structure of U.S. and West German exporters to the East. Of the few U.S. companies which do export industrial goods to the Eastern bloc, most are large multinational corporations. Thus the share of exports to the East in their overall production is negligible. Any change in the Cocom list has little effect on their overall business. The situation is very different in the F.~.G., where many manufacturers that export to the Eastern bloc are small to medium size businesses. Thus in many cases the exports to the East make up a considerable share of their total production; and 46 In the case of machine tools for example, the F.~.G. currently holds 45% of the East European market while the share of the U.S. is 2%, see National Machine Tool Builders Association, The Economic Handbook of the Machine Tool Industry, 1989-90. 22
so businesses are severely affected by a tightening of the list.47 Moreover, many respondents mentioned that "many potential mutually beneficial business opportunities have never been realized, since the risks are much too high of losing a substantial part of your business because of a sudden change of U.S. policy in CoCom".48 2.4. Summary Throughout most of the postwar period, the F.R.G. has attempted to reduce the confrontational aspects of the relationship between East and West, and to emphasize common interests so that cooperative relations between neighbors could prevail. This policy matched with the F.R.G.'s longstanding economic interests in Eastern Europe and the Soviet Union. While the encouragement of East-West economic relationships have always been an integral part of the Federal Republic's policy towards the Eastern bloc, these economic relationships have always been a major point of contention between the U.S. and the F.R.G. In previous years, the continued military threat of the Soviet Union and the F.R.G.'s security dependence on the U.S. often forced West Germany to comply with U.S. preferences. But with the changes occurring in Eastern Europe and the Soviet Union 47 For example in 1982 25% of steel pipes exports, 17% of machine tool export, and 20% of rolled steel exports went to CMEA countries, Der Bundesminister fur Wirtschaft, Der Deutsche Osthandel 1982, Bonn: 1982. 48 Interviews. 23
since the mid 1980s, the balance between the allies' perspectives on East/West relations has clearly shifted in favor of the F.R.G.49 West German officials are now becoming more assertive in their long-standing demands for a reform of CoCom. While the developments in the East have reinforced the necessity of even deeper cuts in the current lists, the respondents point out that this is not a new phenomenon that must f irst be studied caret ul Ty before any action can be taken. Rather, it is a dramatic reminder of the changes that have taken place in some Eastern European countries long before the Fall of 3989, and of the urgent need to reform an outdated control system that will otherwise disintegrate. In the words of Hans Dietrich Genscher, "it is our belief that the situation is ripe to engage in a new effort for a broad-based longterm understanding between East and West. This policy must be seen in the perspective of a European peace order. This peace order cannot be reduced to military problems alone but has to find it basis for interests and confidence in close political, economic, environmental and cultural cooperat~on."50 49 This leaves the question open as to why these changers are occurring. Again the opinions differ sharply. While in the U.S. the changes in the Eastern Europe and especially the Soviet Union are often attributed to its hard line stance towards the Eastern bloc in the early 1980s, West-Germans and Europeans in general have a more differentiated view pointing to a series of factors including the successful strategy of positive linkage within the CSCE process. 50Hans Dietrich Genscher: "Wie gent es 1984 mit den West-Ost Beziehungen weiter?", Mitteilugen fur die Presse, No.1046 A/84, Bonn, 30. 3. 1984, p.8, 11, quoted in: Jurgen No~zold, "Politische Voraussetzungen der Wirtschaftsbezi~hungen zwischen 24
