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The Importance of Osthandel: West German-Soviet Trade and the End of the Cold War, 1969-1991

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The Importance of Osthandel: West German-Soviet Trade and the End of the Cold War, 1969-1991 The Importance of Osthandel: West German-Soviet Trade and the End of the Cold War, 1969-1991 Dissertation Presented in Partial Fulfillment of the Requirements for the Degree Doctor of Philosophy in the Graduate School of the Ohio State University By Charles William Carter, M.A. Graduate Program in History The Ohio State University 2012 Dissertation Committee: Professor Carole Fink, Advisor Professor Mansel Blackford Professor Peter Hahn Copyright by Charles William Carter 2012 Abstract Although the 1970s was the era of U.S.-Soviet détente, the decade also saw West Germany implement its own form of détente: Ostpolitik. Trade with the Soviet Union (Osthandel) was a major feature of Ostpolitik. Osthandel, whose main feature was the development of the Soviet energy-export infrastructure, was part of a broader West German effort aimed at promoting intimate interaction with the Soviets in order to reduce tension and resolve outstanding Cold War issues. Thanks to Osthandel, West Germany became the USSR’s most important capitalist trading partner, and several oil and natural gas pipelines came into existence because of the work of such firms as Mannesmann and Thyssen. At the same time, Moscow’s growing emphasis on developing energy for exports was not a prudent move. A lack of economic diversification resulted, a development that helped devastate the USSR’s economy after the oil price collapse of 1986 and, in the process, destabilize the communist bloc. Against this backdrop, the goals of some West German Ostpolitik advocates—especially German reunification and a peaceful resolution to the Cold War—occurred. ii Dedication Dedicated to my father, Charles William Carter iii Acknowledgements This project has been several years in the making, and many individuals have contributed to its completion. I especially want to thank my advisor, Dr. Carole K. Fink, for guidance, suggestions, and re-readings of multiple drafts. More important, I wish to thank her for her unfaltering support—both in good times and in bad—throughout my graduate career. I would also like to thank the other members of my committee, Dr. Mansel Blackford and Dr. Peter Hahn, for providing useful and insightful comments and for their support. Furthermore, I wish to thank my former advisor, Dr. William Stueck, for all of his advice, support, and kindness over the years. I express gratitude to the Mershon Center for International Security Studies and the Ohio State University Awards Committee for providing the financial support to make this dissertation possible. I also would like to thank the numerous kind archivists in Germany and Russia who assisted my research in countless ways. My fellow graduate students at Ohio State provided me with encouragement as well, and I wish to thank them for their support, especially Tony Crain and Joseph Arena. Finally, I wish to thank family, especially my mother and sister, for providing support and encouragement. And although he passed away long before I ever stepped foot in a college, I deeply appreciate my late father for instilling in me, by way of his example, a love for history and, much more important, being a positive role model. iv Vita 1999…………………………….Diploma, Bacon County High School, Alma, GA. 2003…………………………….B.A. in History, University of Georgia, Athens, GA. 2007…………………………….M A. in History, University of Georgia, Athens, GA. 2007-present………………Graduate Teaching Associate, Ohio State University, Columbus, OH. Publications Book: Pacts and Alliances in History: Diplomatic Strategy and the Politics of Coalitions. (London: IB Tauris, 2012), co-editor with Melissa Yeager. Article: “The Evolution of U.S. Policy toward West German-Soviet Trade Relations, 1969-1989,” International History Review, (June 2012). Book Review: “The Crime That Dare Not Speak Its Name,” Taner Aksam, The Young Turks' Crime against Humanity: The Armenian Genocide and Ethnic Cleansing in the Ottoman Empire, E-History (June 2012) Encyclopedia Entry: v “Hiroshima and Nagasaki,” in Robert Chapman (ed.), Cultural Wars: An Encyclopedia of Issues, Viewpoints, and Voices (Armonk, NY: M.E. Sharpe, 2009). Fields of Study Major Field: History vi Table of Contents Abstract……………………………………………………………..……………….........ii Dedication…………………………………………………………..……………………iii Acknowledgements…………………………………………………..…………………..iv Vita……………………………………………………………………..…………………v List of Tables………………………………………………………….………………….ix List of Figures…………………………………………………………………..…………x List of Abbreviations…………………………………………………………………………..…xi Dramatis Personae………………………………………………………………………xiii Chronology……………………………………………………………………………..xvii Introduction……………………………………………………………….…………….....1 Chapter 1: Overcoming a Generation of Hurdles: The Rise of West German Osthandel and Soviet Westhandel…………………………………………………………………...19 Chapter 2: The Flowering of Osthandel: West German-Soviet Trade in an Era of Global Economic Turmoil, 1974-1979………………………………………………......66 Chapter 3: The Urengoi Pipeline: A Thorn in Washington’s Side……………………..111 Chapter 4: The Golden Interregnum: Osthandel’s Zenith during the Andropov/Chernenko Era……………………………………………………………………………………. 148 Chapter 5: Troubled Times: Osthandel during the Gorbachev/Kohl Era…....................181 vii Conclusion………………………………………………….…………………………..221 Appendix A: Pipeline Graphic………………………………………………………... 229 Appendix B: Soviet Gas Exports by Nation…………………………………….…..….231 Appendix C: The Evolution of Trade…………………………………………………..233 Appendix D: The Transformation of the Soviet Export Structure………………….….235 Bibliography....………………………………………………………………….......….237 viii List of Tables Table 1: West German-Soviet Trade by Commodity………………………….….108 Table 2: Soviet Production of Natural Gas, Major Areas of Production……….... 113 Table 3: Soviet Balance of Trade with West Germany, 1980-1985………………175 ix List of Figures Figure 1: The Dramatic Rise of West German-Soviet Trade during the 1970s …………56 Figure 2: Inflation Levels for Selected Nations……………………………………...…..76 Figure 3: Crude Oil Prices: Cost to Import in Dollars Per Barrel, 1967-1992……...….191 x Abbreviations AA Foreign Office (Germany) ABM Anti-Ballistic Missile AAPD Akten zur Auswärtigen Politik der Bundesrepublik Deutschland (series) AVPRF Archive of Foreign Policy of the Russian Federation BA-Koblenz Federal Archive at Koblenz, Germany CDU Christian Democratic Union CMEA Council for Mutual Economic Assistance EEC European Economic Community FRG Federal Republic of Germany FRUS Foreign Relations of the United States (series) GARF State Archive of the Russian Federation GDR German Democratic Republic NATO North Atlantic Treaty Association OECD Organization for Economic Cooperation and Development xi OPEC Organization of Petroleum Exporting Countries RGAE Russian State Archive of the Economy SALT Strategic Arms Limitation Talks SPD Social Democratic Party of Germany USSR Union of Soviet Socialist Republics xii Dramatis Personae FEDERAL REPUBLIC OF GERMANY Adenauer, Konrad CDU Chancellor, 1949-1963 Bangemann, Martin Economics Minister, 1984-1988 Bahr, Egon Advisor to Willy Brandt; Minister of Special Affairs of Germany, 1972-1974 Beitz, Berthold Chairman of the Supervisory Board of Fried Krupp GmbH (1970-1989); Chairman and Executive Member of the Board of Trustees and Chairman of the Executive Committee of the Alfried Krupp von Bohlen & Halbach Foundation (1967-) Brandt, Willy SPD Chancellor, 1969-1974; Foreign Affairs Minister, 1966-69 Erhard, Ludwig Chancellor, 1963-1966 Fehr, Hans Executive of AEG-Kanis Friderichs, Hans Economics Minister, 1972-1977 Kiesinger, Kurt Georg CDU Chancellor, 1966-1969 Kohl, Helmut CDU Chancellor, 1982-1998 Lambsdorff, Otto Economics Minister, 1977-1984 Overbeck, Egon Mannesmann CEO, 1962-1983 Schiller, Karl Economics Minister, 1966-1972 xiii Schmidt, Helmut SPD Chancellor, 1974-1982; Finance Minister, 1972-1974; Economics Minister, 1972; Defense Minister, 1969-1972 Schelberger, H. Representative of Ruhrgas AG Wolff von Amerongen, Otto President of the Association of German Chambers of Industry and Commerce, 1969- 1988; Prominent Member of Committee on East European Economic Relations, 1955- 2000 van Beveren, Jos Head of Mannesmann Export Department (1970s-1982) SOVIET UNION Andropov, Yuri General Secretary, 1982-1984; KGB Chief Baibakov, Nikolai Chair of State Planning Committee (Gosplan), 1965-1985 Baranovski, Yuri Representative of Soyuznefteexsport (oil export agency) Bondarenko, I.A. Politburo Member Brezhnev, Leonid General Secretary, 1964-1982 Chernenko, Konstantin General Secretary, 1984-1985 Cherniaev, Anatoly Advisor to Gorbachev Falin, Valentin Ambassador to the FRG, 1971-1978 Gorbachev, Mikhail General Secretary, 1985-1991; President, 1988-1991 xiv Gromyko, Andrei Minister of Foreign Affairs, 1957-1985 Kosygin, Aleksei Chairman of the Council of Ministers (Premier), 1964-1980 Manshulo/Manjulo, Aleksei Deputy Foreign Trade Minister, early 1970s Novikov, Vladimir Deputy Chairman of the Council of Ministers (Deputy Premier), 1962-1981; Chair of State Planning Committee (Gosplan), 1960-1962 Orudzhev, Sabit Gas Minister, 1972-1981 Osipov, Nikolai Deputy Foreign Trade Minister, 1967-1985 Patolichev, Nikolai Foreign Trade Minister, 1958-1985 Ryzhkov, Nikolai Chairman of the Council of Ministers (Premier), 1985-1991 Schtscheglov, A.D. Deputy Director of the Division of Geology; Joint-Economic Commission Member Shcherbina, Boris Minister of Construction of Oil and Gas Industry Enterprises, 1973-mid-1980s Suslov, Mikhail Politburo Member; Chairman of the Foreign Affairs Committee, 1954-1982 Tikhonov, Nikolai
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