Introduction

A country's foreign trade mechanisms and its foreign trade performance in general are usually good indicators of its economic system, and of its economic standing. Traditional, that is, unreformed centrally planned economies are closed economies, where foreign trade is regarded as a mere supplement to the domestic economy. The technology gap between East and West is one of the evidences of the inferior performance of centrally planned economies. Relative foreign trade prices are changed, in order to correspond to relative prices on the domestic market, by application of multiple exchange rates or so-called price multipliers. The foreign trade system in traditional centrally planned economies has a number of serious disadvantages, which is one of the reasons for the disappointing performance of these economies. Foreign trade has always acted as a kind of mirror to the developments affecting the economies of Eastern Europe and the Soviet Union.