Dulles with U.S. President Eisenhower in 1956.

American Policy and the Soviet Economic Offensive

IN the early years after the war, the Russians expanded their ideological exports while pursuing a policy of economic isolationism whenever more tangible goods were involved. Wherever they could make themselves heard, they challenged United States concepts of trade and aid as exploitation and imperialism, but they did not compete in substance. Within its own self-imposed limitations, American foreign economic policy was relatively free to engage in trade and aid with the countries not in the Soviet bloc.

The partial oxidation of the Iron Curtain by Bulganin and Khrushchev has not only made possible some degree of controlled artistic, athletic and scientific interchange, but it appears also to have important economic implications. Soviet bloc economic negotiators are busy in both the industrial and the underdeveloped countries. Arrangements are being made for the expanded bartering of commodities, the extension of credit and the provision of technical assistance. At the same time, American policy in this area has become even more hesitant and vacillating, awaiting the results of half a dozen new Administrative reappraisals and Congressional investigations.

The background of the Soviet economic offensive is relatively simple. In 1937, the Soviet Union carried on 96 percent of its limited foreign trade with countries now in the free world.[i] Taking all the Eastern European countries as a group, their prewar trade with the present free world was more than 85 percent of their total trade.

The postwar period witnessed not only a political convergence of the Soviet Union and her new satellites but also an economic integration. By the end of the postwar decade, the trade pattern was completely altered. After eliminating the effect of changes in price level, the volume of their trade with each other has expanded more than 2.5 times while their trade with the rest of the world was less than half its prewar level. Thus in 1954 only 20 to 30 percent of the trade of most Eastern European countries (21 percent for the U.S.S.R.) was with the rest of the world. Within the

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