19 January 1, 1991.A The level of vulnerability to the collapse of CMEA trade was not uniform among the CEE-5, and the extent of the shock from the collapse of CMEA trade was also less abrupt than official statistics might suggest. Since the 1960s, CEE-5 trade with the OECD had tended to increase faster than CMEA trade, despite declining international competitiveness in manufactures. In the 1980s, the quality of CEE-5 manufactures and their international competitiveness was lower than it was in the 1970s (Poznanski, 1988:46-52). The declining international competitiveness of CEE-5 manufactures forced them to offer industrial products at heavily discounted prices, which in turn implied a substantial devaluation of the TR relative to the US dollar. The revalued trade figures suggest a long-term trend of declining shares of the CMEA in CEE-5 total exports. Between 1970 and 1990, this share fell from 76 percent to 54 percent for Bulgaria, from 64 percent to 37 percent for the FCSK, from 62 percent to 31 percent for Hungary, from 60 percent to 39 percent for Poland,<sup>2</sup> " and from 50 percent to 24 percent for Romania.' Hence, although the CMEA and the FSU were the major trading partners of the CEE-5, a significant redirection of trade to the non-CMEA markets occurred prior to 1990. Still, the **_CLE-5_** countries were extremely vulnerable to economic developments in the FSU as the FSU was their single largest trading partner. The Soviet portion of intra-European CMEA trade was around 70 percent between 1987 and 1990 and 74 percent in 1991, despite the contraction in Soviet imports and exports.23 Table 7 shows ratios of CMEA (excluding the former GDR and non-European members) exports to OECD exports for the CEE-4 (excluding Bulgaria24). The changes in ratios over the 1987-91 period show that efforts to orient trade away from the CMEA were quite successful and that a dramatic realignment of

-7 By the end of 1990, around 50 percent of CMEA trade was conducted in hard currency, though the proportion varied for individual countries (Rosati, 1992).

**21** The share of the former CMEA in Poland's exports (in current prices) fell to 16.9 percent of the total in 1991, with the FSU accounting for 11 percent, and Czechoslovakia for 4.7 percent.

22 For revalued estimates of trade of the CEE-5 and the FSU, see Pohl and Sorsa (1992).

23 Calculated from data in IMF Direction of Trade Statistics Yearbook, 1992. Non-European members of the CMEA included Cuba, Mongolia and Vietnam. The figures do not include Bulgaria, for which no data on the trade with the Soviet Union are available in the IMF statistics, or the German Democratic Republic, which ceased to exist as a state.

> 24 Bulgaria's trade was more oriented toward the FSU than the other CEE-5. The ratios were as follows: 1988 - 5.3; 1989 - 5.1; 1990 - 3.6; 1991 - 2.0. Because these data are derived from other sources, they are not included in Table 7. The tendency is the same as for other countries, although the decline was mainly the result of the collapse of CMEA exports (they fell from US$4.8 bill. in 1988 to US$2.0 bill. in 1991), and stagnating exports to the West (their value rose slightly from US$900 million to US$1 billion in 1991).