ABSTRACT
The division of Germany and Berlin into zones controlled by the four allied powers was an obvious solution to the means for occupying postwar Germany, although it posed problems in controlling East-West trade. The initial response of the Americans and British (their two areas were merged to form Bizone in 1947) was to block all trade to the Soviet zone passing through their Bizone unless transported in West German motor trucks. While it was acknowledged that this policy violated the Geneva agreement to ensure freedom of transit, its intention was to deprive the Soviet zone of receiving goods from Europe through West Germany. A second part of the blocking policy was to cut off the East from opportunity to export to the West. Westbound traffic from the Soviet zone, whether it was consigned to the Bizone or other countries, was to be barred, thereby depriving the East of the hard currency to finance its imports. I
The divided Germanys The three zones of the US, Britain and France were joined to form the German Federal Republic in May 1946, although it remained under military occupation until May 1955 when it became a sovereign state. The Allied High Commission continued to oversee trade arrangements with the East through the High Commission Trade Observers who interpreted the Allied High Commission's policies to the Federal Negotiators, but by the end of 1951 it was considered that the Allied Observers unnecessarily restricted negotiations and they were curtailed. The Soviet Union protested against the establishment of the new Federal Republic and in October 1949 it convel1ed its zone into the German Democratic Republic (GDR), although the Western Allies continued to refer to it as the Soviet zone. By July 1951, the Western Allies had virtually completed the transfer to the Federal government of responsibility for negotiations between the Federal Republic and GDR. The Federal government announced its wish to expand trade with the Soviet bloc 'to as great extent as possible within the COCOM and Battle Act regulations, which the Government has unequivocally reaffirmed will be adhered to strictly'. The Americans recognised that the Republic disliked the CoCom regulations because they had 'little popular
European demandsjhr changes to CoCOI1/ 55 support'. The West Germans resented the US trading restrictions and planned measures for resuming exports to distant China.
