Page 230 - DECO503_INTERNATIONAL_TRADE_AND_FINANCE_ENGLISH

International Trade and Finance

Notes 20.1 International Economic Cooperation

The objective development of diverse economic, scientific, and technological ties among individual
countries and groups of countries and between the socialist and capitalist socioeconomic and political
systems, based on the principles of independence, equality, and mutual advantage. Essentially the
process represents the intensification of the international division of labor.
The scientific and technological revolution, which has accelerated the international division of labor,
and the growing economic strength of the USSR and of the entire world socialist system have increased
the importance of international economic cooperation. Only after the appearance of socialism did
genuine economic cooperation become possible, based on the principles of sovereignty and equality
between states and peoples. The forms of economic cooperation within the socialist community and
those within the capitalist economic system, while superficially similar, reflect the fundamental
differences between the two opposing economic and sociopolitical systems.

The world socialist economic system affects the nature of economic cooperation not
only between capitalist and socialist countries but also between the developed
capitalist countries and the developing countries.

As a result of the continuing scientific and technological revolution, no single country, not even the
most developed, can produce with equal efficiency the entire range of modern products. Therefore
individual countries or groups of countries attempt to limit the range of goods they produce and to
produce them in huge quantities so as to meet not only their own needs but also the needs of other
countries in exchange for the commodities that the other countries produce for export. In this way
trade expands and a single world economy develops, each country providing primarily the goods it
produces better and more cheaply than others.
International economic cooperation among the capitalist countries developed from simple forms of
trade and exchange. At the imperialist stage, there arose a complex and diverse system of international
industrial ties between monopolies and monopolistic associations (such as international cartels,
syndicates, and concerns), and intergovernmental economic unions were formed. The capitalist
division of labor arose and developed, closely linked with the world capitalist market. Within the
capitalist system, international economic cooperation is accompanied by fierce competition among
monopolies and countries, by the intensification of irreconcilable contradictions, by the growing
effect of the law of uneven economic and political development of capitalist countries in the age of
imperialism, and by the narrowing of imperialism’s sphere of influence and the growth of the world
socialist system.
International economic cooperation includes foreign trade, credit relations, cooperation between
countries in extracting natural resources, compensation arrangements, and extensive scientific and
technical cooperation—for example, trade in licenses to produce certain goods and to use certain
technological methods, joint scientific studies, and collaboration on major technical projects, in the
construction of plants and other enterprises, in geological exploration, and in training national
personnel.
The expansion of international trade and other economic ties has been stimulated by the development
of international credit. The USSR maintains credit agreements with many countries, primarily the
socialist and the developing countries. Of the 2,765 plants and other enterprises being built with
Soviet technical assistance, 1,898 are in socialist countries and 858 are in developing countries; 1,680
projects had been completed as of Jan. 1, 1973 (1,263 in socialist countries and 412 in developing
countries). The Soviet Union offers credits to banks and businesses in the advanced capitalist countries.
It is participating in the construction of a major metallurgical complex in France, providing machinery
and equipment on credit. The Soviet Union is also seeking extensive long-term credits from the
advanced capitalist countries, particularly to draw more rapidly into the economy the natural resources

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