Radical Changes Expected in East Bloc Trading Group : Trading: Member nations of Comecon are demanding an end to outdated and inefficient agreements.

Member nations of the Soviet-led trading group Comecon begin a crucial two-day meeting here today that is expected to radically alter both the form and role of the organization, which has come to symbolize the economic failures of Communist central planning.

New, reform-minded governments in several East European countries have demanded an end to the fossilized trading arrangements and other restrictions that have dominated Comecon and strangled growth virtually since its inception 40 years ago.

If the group does decide to liberalize, it would almost certainly free its members to increase trade with the West.

Czechoslovakia’s new finance minister, Vaclav Klaus, last week even suggested that the organization be scrapped completely. However, he later backed away from the comment, and on the eve of the Sofia meeting none of Comecon’s nine other members have openly supported outright abolition.

In many ways, the current meeting is intended to bring economic realities in the region more in line with political change that has transformed the nations of Eastern Europe from a group of obedient Communist satellites of the Soviet Union to independent, almost democratic countries with free-market aspirations.

Senior Soviet officials have also indicated the need to reform Comecon, which is formally named the Council for Mutual Economic Assistance, or CMEA.

In addition to the Soviet Union and the six East European countries of Poland, Hungary, Czechoslovakia, Romania, East Germany and Bulgaria, Comecon also includes Mongolia, Cuba and Vietnam, although the three non-European members play only a minor role.

“It has become old and should be replaced by a new structure,” Sergel Ouganov, a member of the Soviet advance delegation to the meeting, told reporters here last week.

Officials in Hungary and Poland, in addition to those in the Soviet Union, have talked of scrapping the basic underpinnings of Comecon, including such features as integrated five-year economic plans with in-built specialization (where one country produces the lion’s share of a product for the entire bloc); barter arrangements; unrealistic, arbitrary pricing, and the use of the so-called convertible ruble as a common unit of account--a unit that neither exists as a currency nor is convertible.

Increasingly powerful reformist sentiments in Eastern Europe see such a system as obsolete, frequently counterproductive and occasionally nonsensical.

These reformists, including the new crop of free-market government ministers in key countries, also view Comecon as one of the single-biggest barriers to launching the process of boosting trade with the West.

Reformists are expected to push to replace the present system with more conventional bilateral trade agreements, which would diminish the role of government agencies and permit incentives to produce world-class goods.

East Europeans quickly learned that the Soviets would take almost anything, while their Comecon partners had no other choice but to take what was offered.

In such a climate, cheap oil and other basic materials merely bred inefficient fuel use and production methods. Power plants in Czechoslovakia, for example, require roughly three times the fuel to produce a unit of energy as their most efficient Western counterparts.

Such a malaise quickly left these countries incapable of competing in the West.

“We’re like a handicapped class in a school of healthy students,” commented Andrezej Wroblewski, a Polish political analyst. “Sure, we are hard-pressed to come up with anything (of) high value-added to export. If not (for) the exchange among us handicapped ones, how would we exist? We barter junk for junk.”

This week’s meeting was initially scheduled for last June but has been repeatedly postponed, apparently because members were unable to bridge the gap between reformist governments and the remaining hard-line Communist regimes. With the fall of Romania’s Nicolae Ceausescu last month, the group’s last major hard-liner disappeared.

As recently as last spring, for instance, a Czechoslovak trading official spoke unrealistically of Comecon as “a Socialist market that does not contain unemployment and bankruptcies.”

Now, however, Klaus, the new Czechoslovak finance minister, is an advocate of the policies of American economist Milton Friedman, the arch proponent of free-market forces.

COMECON AT A GLANCE

Charter: The Council for Mutual Economic Assistance is the controlling body for trade among Soviet-allied countries.

Members: Bulgaria, Czechoslovakia, East Germany, Hungary, Poland, Romania, Soviet Union. Yugoslavia has partial member status; Albania has been inactive since 1961. Cuba, Mongolia, Vietnam are not shown.

Founded: Charter adopted in January, 1949.

Purposes: Economic development; scientific, technical and economic cooperation; joint trade negotiations with non-members.

Policy-making bodies: Council comprises heads of governments; executive committee of country representatives.

Developments: Members, meeting in Bulgaria beginning today, will address the political and economic reforms that have swept Eastern Europe, prompting calls from Czechoslovakia and Poland for a major overhaul. The alliance, they say, is outdated and should be replaced with something less rigid.