ABSTRACT
Leonard Geron has predicted that with phasing out Council for Mutual Economic Assistance (CMEA) and switch to hard currency settlements, members’ trade with the Soviet Union would change only slightly and that the Soviet Union would be interested in continuing to supply its East European neighbors. In 1991 a shift from transactions in non-convertible transferable rubles to dollars transactions led to a contraction of the trade between the countries of the former CMEA by 60%. In the Baltics, Lithuania and Latvia have been hit hard from disruption of trade with CMEA countries and had severe shortages of imported inputs for health, energy and agriculture sectors. At its peak the CMEA accounted for more than one-half of all trade among member countries. As a consequence of disintegration of CMEA, trade among the former CMEA members is estimated to fall from 60% in 1992 to 20%.
