Page:NATIONAL INTELLIGENCE SURVEY 18; CZECHOSLOVAKIA; GOVERNMENT AND POLITICS CIA-RDP01-00707R000200110010-2.pdf/43

 APPROVED FOR RELEASE: 2009/06/16: CIA-RDP01-00707R000200110010-2

Germany, the United Kingdom, and France. Improved economic relations with these countries, however, depended on an improved political atmosphere, which motivated Czechoslovak leaders to make substantial efforts to eliminate old political grievances. By the mid-1960's, the Czechoslovak Government for the first time sought rapprochement with their Western neighbors, and initiated a program of personal VIP visits, commercial contacts, and tourism. But practical economic results of such efforts were slow in coming, principally because Czechoslovak manufactured goods could not compete in Western markets because of their inferior quality.

Formal negotiations between the Czechoslovaks and the West Germans progressed most rapidly and, in spite of Soviet and East German opposition, an agreement calling for expanded trade and an exchange of trade missions was signed in August 1967. Prague managed to sidestep two extremely contentious issues with Bonn—the Berlin problem and the Munich Agreement—to bring about the agreement.

Although the Husak regime has sought to maintain the momentum in its economic relations with Bonn—a 5-year trade pact was signed in December—political progress in negotiating a good-will treaty similar to those concluded by West Germany with the U.S.S.R. and Poland, was slow. After the Bonn-Warsaw treaty was ratified in May 1972 and West German-Czechoslovak negotiations became the next order of business in Ostpolitik, Prague stood firm in its traditional demand that Bonn declare the 1938 Munich Agreement void ab initio (from the beginning). Bonn held that this was impossible to do for a multitude of technical reasons involving mainly the legal status of Sudeten Germans and Czechoslovak demands for reparations. A solution to this impasse was not found until May 1973, when—probably as a result of Soviet pressure—Prague backed off from its ab initio formula and accepted, in effect, Bonn's standing offer to declare the Munich Agreement "no longer valid."

The draft treaty was initialed in June during Chnoupek's visit to Bonn, and the way seemed clear that a formal signing by Chancellor Brandt in Prague and a subsequent establishment of diplomatic relations. At the last moment, however, issues involving the right of Bonn's diplomatic establishment in Prague to represent West Berlin institutions once again became an obstacle, forcing Brandt to postpone his trip to Prague. Backed by Moscow in its intransigence on the Berlin issue, and joined by Hungary and Bulgaria, whose own treaty negotiations with West Germany became stalled, the Husak regime refused to budge. In early November 1973, however, following high-level Soviet-West German talks in Moscow, Prague once again reversed itself on Soviet "advice," the Berlin issue was sidestepped, and the treaty was signed on 11 December.

Relations with France have also improved measurably, although the Prague-Paris rapprochement was largely an adjunct of de Gaulle's own efforts to strengthen French ties with the Soviet Union and Eastern Europe. As early as 1967 Czechoslovakia and France signed a long-term trade protocol and a broadened cultural agreement. The trade agreement was renewed in February 1970. In recent years both Paris and Prague reached a measure of agreement on a number of international issues, such as East-West detente and European security.

The Czechoslovaks have also called for an end to their often testy relations with Austria, which Prague feels has violated its neutral status through anti-Czechoslovak propaganda and "collusion" with the NATO powers. In 1970 Vienna reduced its radiobroadcasts directed to Czechoslovakia, but warmer relations have not become a reality. Continued local disputes, primarily caused by border incidents, seem to preclude an early improvement.

Czechoslovakia's relations with the United States had warmed considerably in the 1960's from the low point of the cold war days. Nevertheless, progress in developing a productive dialog was slow, primarily because of the diametrically opposing viewpoints of the two countries on major international issues. The Vietnam war was Prague's main point of contention and was the subject of stringent anti-U.S. propaganda. The Czechoslovaks take the United States to task on other issues, notably the alleged U.S. "role" in the Middle East conflict and, until Soviet detente policies muted this theme, U.S. "responsibility" for inciting the arms race. Purely bilateral irritants have also marred U.S.-Czechoslovak relations. The Czechoslovak Government has been unable to obtain the release of 18.4 metric tons of Nazi-looted gold (worth US$20 million at the time), held by the Tripartite (United States-United Kingdom-France) Gold Commission at U.S. insistence. Release of the gold has been contingent upon reaching a satisfactory agreement which would provide compensation for U.S. citizens whose property has been nationalized by Czechoslovakia.

A major development in Czechoslovakia's relations with the United States was the visit of Secretary of State Rogers to Prague in early July 1973 and the signing at that time of a consular convention. In September, the two nations began talks aimed at

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APPROVED FOR RELEASE: 2009/06/16: CIA-RDP01-00707R000200110010-2