CeBIT provided the ideal platform for various representatives of Western business to put increased pressure on their governments to relax the list drawn up by the Co-ordinating Committee for Multilateral Export Controls – CoCom – to ensure that the Eastern Bloc does not get hold of any Western technology it may use to its military advantage. A series of well-attended seminars conducted by the Business USA forum specially set up for CeBIT, made it plain that the CoCom list had not only stunted East-West business relations, but also had further negative ramifications for trading between the US and Western Europe.
Illicit
The French foreign trade minister, Jean-Marie Rausch, asserted that France was committed to work with West Germany in the rebuilding of Eastern Europe, and that the crucial factor in this rebuilding was to change the CoCom list as soon as possible. Eastern business fervently hopes for these changes as well, but there was also the realisation that the expected relaxation of the CoCom lists may come too late, for by the time their developers start to come out with new products based on previously restricted technology, they could find their traditional markets in the hands of the many Western firms already vying for a piece of the action. Nevertheless, nobody who talked to the Eastern European firms at CeBIT could have avoided sympathising with their despair at watching their hopelessly out-dated products being pitilessly eclipsed by the Western European and US offerings exhibited under the same roof, and although CeBIT offers the Comecon companies the bitter-sweet chance to see at first hand the state of advancement in the rest of the world and to get some perspective on the world market, the imbalance created by CoCom – resulting in East German information technology, for example, being about five years behind that across the border – means that when they are allowed an illicit opportunity to get to grips with Western technology more intimately, it is rarely turned down. Three years ago, Isotimpex, the Bulgarian computer and peripherals manufacturer and electronic components trade agency for the country as a whole, was indirectly caught up in a messy affair when a British businessman was convicted of exporting second-hand IBM machines into the Eastern Bloc and, by so doing, of contravening the CoCom list. –
By Mark John
The Briton maintained his innocence, saying that he was unaware that the IBMs were being on-shipped to the East from the warehouse to which he had sent them in Stockholm, but was eventually convicted when, among other things, receipts were found showing that he had had dinner with representatives of Isotimpex; Bulgaria, it had been established, was the main recipient of these machines. This anecdote is only to demonstrate the desire on both sides to dispense with the CoCom list: Isotimpex is by no means the only Eastern European firm to capitalise on opportunities such as these, and the crippling effect that the CoCom list has had on Eastern European high-tech firms goes some way to mitigating the Sofia-based company’s part in the transgression – the temptation to receive and examine Western-produced computers must be just as strong as was the temptation felt by nineteenth century physicians when Burke and Hare offered them a fresh corpse. Recent noises from the US government indicate that the flow of goods to the East may very soon be less restricted, but, in the meantime, the CoCom leg acy was clearly evident in the ambivalence with which firms like Isotimpex view the opening up of the Iron Curtain. CoCom restrictions have affected Isotimpex in an architypal way, and with 70,000 staff spread across all its activities – about 5,000 more than Robotron at the last count – Isotimpex may have much to gain, but also much to lose from these developments. Like most of the large Eastern information technology suppliers, it manufactures a bit of everything – 100,000 personal computers a year, various peripherals and a range of telecommunications equipment – and, not being able to compete
effectively in the West, these go typically to Bulgarian firms and into the Comecon market. Isotimpex is now in the position of having to formulate marketing strategies independent of a national plan, and early indications are that this may be beyond the scope of a management with no experience of free market trading: Isotimpex claims that it has around 60 agents in the West, and there are vague notions of turning these into proper distribution outlets.
Joint Manufacture
There is also talk of sorting out some means of dealing with Western firms in Bulgaria – most likely by barter until the present currency restrictions are removed. Isotimpex stated that it had received interest from several Western firms, but, with none of the joint venture announcements that the likes of Robotron and Videoton were able to make, the impression was that Isotimpex is not being courted with the same respect that its counterparts in East Germany and Hungary are – that, in effect, all the West wants from Isotimpex is its access to the local market. It says that it definitely expects to reduce its workforce in the effort to compete with new entrants into the Bulgarian market; but unless it can come to some arrangements with Western firms from which it can benefit itself – for example, technology exchanges and joint manufacturing deals Isotimpex, like its counterparts in the rest of the East, may be forced to reduce its workforce more dramatically than the management currently estimates.
