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       - The Community and Comecon
          * The negotiations
       The Community has long shown its willingness to establish
       relations with Comecon itself, alongside the bilateral
       agreements with the Comecon member countries (**).
       Negotiations for the conclusion of an agreement between the
       Community and Comecon began in 1977 but were broken off in 1980
       by mutual agreement.  At that point the main stumbling block
       for the Community was Comecon's insistence on including trade
       provisions in the agreement and setting up a joint committee
       responsible for the general supervision of bilateral relations
       with the member countries of Comecon.  This was unacceptable
       since Comecon does not possess either a common commercial
       policy nor a common commercial policy instrument.
       In 1981 Mr Wilhelm HAFERKAMP, Member of the Commission with
       special responsibility for external relations, sent a letter to
       the President of the Executive Committee of Comecon, Mr Andrei
       LOUKANOV, expressing the Community's readiness to participate
       in the constructive resumption of dialogue.  This letter
       remained unanswered.
          * A fresh start ?
       Since 1984 there have been a number of indications which, taken
       together, have suggested that Comecon wished to resume the
       talks.  In June 1984 the Comecon summit meeting expressed the
       organization's wish to conclude an appropriate agreement with
       the Community.  This approach was confirmed during the visit
       for talks with Mr HAFERKAMP in October 1984 by Mr Christo
       CHRISTOV, Bulgaria's Foreign Trade Minister.  On 30 May 1985,
       Mr Michail GORBACHOV said when speaking to Mr Bettino CRAXI
       that it was time for them (i.E. the Community and Comecon) to
       organize economically advantageous relations with each other.
       In as much as the EEC countries operated as a political entity,
       Comecon was prepared - said Mr GORBACHOV - to seek with it a
       common language on specific international issues as well.
       On 14 June 1985 the Commission received a letter from Mr
       Viatcheslaw SYTCHOV, Secretary of Comecon, suggesting the
       establishment of relations between Comecon and the Community
       and also a high-level meeting at which a general EEC-Comecon
       declaration would be adopted.
       ----------
       (*)  Known officially as the CMEA - Council for Mutual
       Economic Assistance.
       (**) 10 members : USSR, German Democratic Republic, Poland,
            Czechoslovakia, Hungary, Romania, Bulgaria, Mongolia,
            Cuba and Viet Nam.
                       
                                    - 2 -
       Replying to the Secretary of Comecon on behalf of the Community
       on 31 July 1985, Mr Willy DE CLERCQ confirmed the Community's
       readiness to resume dialogue with Comecon but asked that the
       latter should amplify its position with regard to the content
       of the proposed declaration.  Mr DE CLERCQ also pointed out
       that the Community still felt that the resumption of relations
       with Comecon should not affect the Community's present and
       future relations with the member countries of Comecon and he
       asked Mr SYTCHOV to indicate Comecon's view on this matter.
       In his reply of 26 September last year Mr SYTCHOV said that the
       signing of the declaration and the development of cooperation
       between the two organizations could create more favourable
       conditions for the development of relations between the member
       countries of the CMEA, considered individually, and the EEC,
       and that this could include the conclusion of appropriate
       agreements with the EEC by interested CMEA member countries.
       - The Community and the Comecon member countries
       In 1974 the Community proposed the conclusion of individual
       trade agreements, not only to the Comecon member countries but
       to all state-trading countries.  This proposal was ignored by
       most of the countries approached.
       Yet economic links have grown up over the years between the
       Community and the Comecon countries : five textile agreements
       have been concluded (with Bulgaria, Hungary, Poland, Romania
       and Czechoslovakia) plus voluntary restraint arrangements on
       steel exports from the same countries, and also specific
       agreements on agricultural products.  In addition, a trade
       Agreement covering industrial products and an Agreement
       establishing a joint ministerial committee were concluded with
       Romania.  Talks have been going on with the latter country
       since 1981 with a view to the conclusion of a more
       comprehensive cooperation agreement.
       The Comunity remains ready to negotiate bilateral trade
       agreements with each of the Comecon countries, being convinced
       that such negotiations - geared to the particular situation of
each country - would give a fresh impetus to trade relations.

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