European Community Signs Major Trade Accord With Soviet Union

From Associated Press

The European Community Commission said Monday that it has signed a trade and economic cooperation accord with the Soviet Union that goes beyond similar deals signed in the past 14 months with Hungary, Poland and Czechoslovakia.

The pact provides for a gradual lifting of import quotas on Soviet industrial goods by 1995 and cites a dozen areas in which the two sides plan to establish economic cooperation, an EC source said.

These include science and technology, banking, transport, agriculture, environmental protection, energy, raw materials and mining. The accord excludes trade in goods considered to be sensitive militarily, according to the source, who asked not to be identified.

He said the agreement calls for reciprocity in trade benefits. "That is the objective of this accord . . . to get an effective access to the Russian market for EC products," the source said.

Officials could not give an assessment of the economic impact of the agreement.

EC trade with Eastern Europe is small. It totaled $56 billion in 1987, the last year for which complete figures are available. EC-Soviet trade that year was only $24.6 billion.

The agreement with Moscow was reached after five days of talks between the EC Commission and Soviet negotiators. It must be approved by the 12 EC states and the European Parliament.

That is a formality, however, given the EC's interest in increasing economic links with Eastern Europe and getting access to its market of 390 million consumers.

The Soviet accord, negotiated in about four months, is the fourth that the EC has signed with an East European nation in just over a year.

It signed a trade and economic cooperation agreement with Hungary in September, 1988; a more limited deal with Czechoslovakia covering only trade in manufactured goods was signed in December, 1988, and an agreement with Poland was signed Sept. 19.

These accords follow a June 25, 1988, agreement under which the EC and the Moscow-led Comecon trade bloc, after years of ignoring one another, signed a mutual recognition agreement in Luxembourg.

The EC on Monday also widened market access for farm and textile goods from Poland and Hungary. Through the measure, which will be in effect only during 1990, the EC suspended import quotas for the two countries that are fixed through the General Agreement on Tariffs and Trade, the world trade body.

In a statement, the 12 EC foreign ministers said the one-year lifting of quotas was an "exceptional solution to an exceptional problem" and represents no change in the EC's overall position on quotas in world trade.

The move follows an EC decision on Nov. 6 to increase market access for industrial goods from Poland and Hungary.

The EC foreign ministers were notified of the agreement with the Soviet Union but did not discuss the issue in depth.

The Soviet accord goes further than any other deal that the EC has signed with an East European nation, notably by subjecting nuclear energy safety and mining to economic cooperation, sources said.

Also on Monday, European Community External Relations Commissioner Frans Andriessen called developments in Czechoslovakia of the past week "a cause for profound rejoicing throughout Europe."

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