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Export Competitiveness : British Experience in Eastern Europe

Published online by Cambridge University Press:  26 March 2020

G. F. Ray
G. F. Ray*
Affiliation:
National Institute of Economic and Social Research
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Extract

The purpose of the Enquiry, whose results are reported in this article, was to assess the competitiveness of British exports in five Eastern European countries—Hungary, Poland, Czechoslovakia, Yugoslavia and Bulgaria. The Enquiry also investigated, more generally, the possibilities of promoting trade with these five countries. They were chosen because their trade with other countries is almost entirely the monopoly of specialised foreign trade corporations;(1) hence for each category of products there is only one buyer in each country. It is therefore possible to make some assessment of the competitiveness of British exports from the consumer end without an impossibly large number of interviews. These foreign trade corporations keep in touch with all the main suppliers both inside and outside the Comecon area, and are therefore in a good position to answer questions about the competitiveness of various Western countries' exports—questions concerning not only statistically quantifiable aspects (such as price) but also such matters as packaging and public relations.

Type
Research Article
Information
National Institute Economic Review , Volume 36 , May 1966 , pp. 43 - 60
Copyright
Copyright © 1966 National Institute of Economic and Social Research

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Footnotes

This article was prepared by G. F. Ray, of the National Institute of Economic and Social Research. It would have not been possible without the assistance of a large number of trade delegations, trade representatives and foreign trade research centres and institutes. Their help is acknowledged in the Appendix on page 60.

References

note (1) page 43 A very small number of producing companies have the right to export directly. For imports, the foreign trade corporations have an almost 100 per cent monopoly. With the introduction of new systems of managements this may all begin to change gradually.

note (1) page 45 There were a limited number of wholly or partly British- owned companies in the five countries, as well as portfolio holdings of bonds, etc. Indeed, 6 per cent of present Hungarian export earnings are going into a fund for com pensation for British property in Hungary which was nationalised.

note (1) page 49 For example, the chemical business missed on price grounds in Poland, in the first six months of 1965 alone, amounted to over £1 million. The price difference in favour of competitors was 16 per cent for dyestuffs, 7 per cent for inorganic and 8 per cent for organic chemicals. For chemical plant and equipment British prices were said to be some 15 per cent above the German quotations, about 10 per cent higher than the Italian and slightly above the French. A few years ago the Polish shipbuilders made an attempt to switch from German to British and Danish equipment. In 1961-63 this seemed to be quite a promising idea, since British prices were then competitive or nearly so. They have, however, risen so much since then that British prices for a good deal of marine equipment now seem to be some 30 per cent above German and Danish prices.

note (2) page 49 Sometimes the initial quoted price was high because the exporter was offering goods of a quality above that required by the importer.

note (1) page 53 For example, in one of the large Hungarian foreign trade corporations which operates in the field of plant and machinery, about 30 officials speak English, whereas the number of those speaking German is around 200.

note (2) page 53 Desirable as such a venture is, caution is recommended. A Polish view illustrates the point: ‘Technical instructions in good English, though read by few, are always preferable to instructions in bad Polish’.

note (1) page 54 For example, representatives of German, French and Italian steelworks visit the Bulgarian importer of metals and metal goods every month or every other month. British visits are very rare.

note (2) page 54 Figyelö, May 20, 1965.

note (1) page 56 Such as the N.O.T. Club in Warsaw and the ‘House of Technique’ in Budapest.

note (2) page 56 There is now an agency in Hamburg specialising in market research in Eastern Europe; they have their own public relations agents in Moscow and in Prague, and an agency in Essen for the broader public relations approach, including broadcasts. They distribute lavishly produced technical papers describing the novelties of the German engineering industry (written entirely in Polish); they approach engineers and other personal contacts in Eastern Europe directly by letter, and are generous with invitations to technicians for ‘further education’.

note (3) page 56 Even in the United States, the strongest advocate of a strategic embargo, several Government Committees, including the Miller Committee, recommended that the United States administration should revise the present arrangements governing ‘East-West trade’, introduce M.F.N. treatment etc.—arguing that’ the West should be in a position to respond more affirmatively to tendencies of some Eastern countries to trade more freely with the West and to follow more market-orientated practices’. (The Battle Act Report 1965, pages 15-17.)

note (1) page 58 Britain's share in Western countries' exports of manu factures to the five countries covered in this article is rather lower than her share in world exports of manufactures; on the other hand, it rose between 1954 and 1963.