Foreign trade of the Soviet Union

Overview of foreign trade in the Soviet Union

Soviet foreign trade played only a minor role in the Soviet economy. In 1985, for example, exports and imports each accounted for only 4 percent of the Soviet gross national product. The Soviet Union maintained this low level because it could draw upon a large energy and raw material base, and because it historically had pursued a policy of self sufficiency. Other foreign economic activity included economic aid programs, which primarily benefited the less developed Council for Mutual Economic Assistance (COMECON) countries of Cuba, Mongolia, and Vietnam. The Soviet Union conducted the bulk of its foreign economic activities with communist countries, particularly those of Eastern Europe. In 1988, Soviet trade with socialist countries amounted to 62 percent of total Soviet foreign trade. Between 1965 and 1988, trade with the Third World made up a steady 10 to 15 percent of the Soviet Union's foreign trade. Trade with the industrialized West, especially the United States, fluctuated, influenced by political relations between East and West, as well as by the Soviet Union's short term needs. In the 1970s, during the period of détente, trade with the West gained in importance at the expense of trade with socialist countries. In the early and mid 1980s, when relations between the superpowers were poor, however, Soviet trade with the West decreased in favor of increased integration with Eastern Europe. By 1946, Amtorg organized a multi million dollar trade. Amtorg handled almost all exports from the USSR, comprising mostly lumber, furs, flax, bristles, and caviar, and all imports of raw materials and machinery for Soviet industry and agriculture. It also provided American companies with information about trade opportunities in the USSR and supplied Soviet industries with technical news and information about American companies. Amtorg was also involved in Soviet espionage against the United States. It was joined, in both its trade and espionage roles, by the Soviet Government Purchasing Commission from 1942 onward. During Lenin's tenure, Armand Hammer established a pencil factory in the Soviet Union, hiring German craftsmen and shipping American grain into the Soviet Union. Hammer also established asbestos mines and acquired fur trapping facilities east of the Urals. During Lenin's New Economic Policy, Armand Hammer became the mediator for 38 international companies in their dealings with the USSR. Before Lenin's death, Hammer negotiated the import of Fordson tractors into the USSR, which served a major role in agricultural mechanization in the country. The plant would construct Ford Model A and Model AA trucks. The contract involved the purchase of $30,000,000 worth of knocked down Ford cars and trucks for assembly during the first four years of the plant's operation, after which the plant would gradually switch to Soviet made components. Ford sent his engineers and technicians to the Soviet Union to help install the equipment and train the workforce, while over a hundred Soviet engineers and technicians were stationed at Ford's plants in Detroit and Dearborn "for the purpose of learning the methods and practice of manufacture and assembly in the Company's plants".

During WWII, the United States supplied the Soviet Union as part of the Lend Lease program, amounting to about 4.4 million tons of food supplies, 2.6 million tons of petroleum, 14,000 planes, 44,000 jeeps, 375,000 trucks, 8,000 tractors, 12,700 tanks, 1.5 million blankets, 15 million pairs of army boots, and 106,000 tons of cotton.

Trade between the United States and the Soviet Union averaged about 1 percent of total trade for both countries through the 1970s and 1980s. Soviet American trade peaked in 1979 at US$4.5 billion, exactly 1 percent of total United States trade. The Soviet Union continuously ran a trade deficit with the United States in the 1970s and early 1980s, but from 1985 through 1987 the Soviet Union cut imports from the United States while maintaining its level of exports to balance trade between the two countries. The total value of this trade was estimated at $20 billion. The construction of Soviet port facilities, designed by Hammer's firms, was partially financed by the Export Import Bank as endorsed by Nixon. Author Daniel Yergin, in his book The Prize, writes that Hammer "ended up as a go between for five Soviet General Secretaries and seven U. S. Presidents." Hammer had an extensive business relationship with the Soviet Union stretching back to the 1920s with Lenin's approval. According to Christian Science Monitor in 1980, "although his business dealings with the Soviet Union were cut short when Stalin came to power, he had more or less single handedly laid the groundwork for the [1980] state of Western trade with the Soviet Union." and the suspension of high technology exports to the Soviet Union. In 1980, Carter limited ammonia imports from the Soviet Union.

In 1987, total trade between the United States and the Soviet Union amounted to US$2 billion. The Soviet Union exported chemicals, metals (including gold), and petroleum products in addition to fur skins, alcoholic beverages, and fish products to the United States and received agricultural goods—mostly grain—and industrial equipment in return. The value of exports to the Soviet Union in 1987 amounted to US$1.5 billion, three quarters of which consisted of agricultural products and one quarter of industrial equipment. The project, estimated as having cost $800 million by 1972, produced Zhiguli models. The ensuing company town in Tolyatti became the largest planned industrial center in the USSR. In the mid 1980s, West European exports to the Soviet Union were marginal, less than 0.5 percent of the combined gross national product of countries of the Organisation for Economic Co operation and Development. OECD countries provided the Soviet Union with high technology and industrial equipment, chemicals, metals, and agricultural products. In return, Western Europe received oil and natural gas from the Soviet Union. Later in 1990, the Soviets made an arrangement to sell diamonds to De Beers through a Swiss subsidiary. By that time, diamonds were the USSR's fifth largest source of export revenue.