Trade Pacts with the West

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Object essay: Lewis Siegelbaum

Faced with an economy in ruins and a discontented population, the Bolsheviks opted for pragmatism in their foreign relations. Lenin, though still skeptical about western motives, knew that the new economic policy would collapse without foreign trade and credits. He needed capitalist goods and industrial technology to rebuild, and capitalist money to trade. Formulating his own policy objectives, and using Narkomindel pragmatists such as Georgii Chicherin, Maksim Litvinov, Leonid Krasin, Khristian Rakovskii, Lenin steered Soviet Russia back into Europe.

The western nations, led by England and the United States, remained indignant about certain issues, such as the outstanding wartime debts and the lack of compensation for nationalized properties. Nobody could fail to notice that the Comintern was still fomenting world revolution. Yet capitalists were eager to expand their markets in post-war Europe, and Russia offered tremendous opportunities. Although the United States eventually did not sign a trade agreement and did not offer diplomatic recognition, the British government under David Lloyd George did.

Recently isolated from the brotherhood of nations, Soviet Russia reestablished valuable foreign ties in 1921. Although each individual country was wary of Soviet motives, Soviet negotiators played off their fears with some cunning. They managed to sign treaties with Middle Eastern countries such as Turkey, Afghanistan and Persia, achieving some international recognition. They allayed fears in those countries by promising not to foment revolution. This strengthened their hand in dealings with European powers, with whom they signed bilateral agreements throughout 1921. Their greatest triumph occurred in April 1922, during the international Genoa Conference. It was the goal of Lloyd George to return Russia to the “concert of powers,” and then reward them with credits and loans. However Soviet representatives opposed the stiff conditions attached, which included repayment of all debts; and fearful of a united Western front, they aligned themselves with Germany. In a private meeting the small Italian town of Rapallo, Soviet and German representatives signed a treaty renouncing all financial claims, securing mutual trade relations, and securing German aid to Russia. The treaty allowed both countries to reassert their international independence, and to begin rebuilding their power. Russia secured help in rebuilding its economy, and Germany received Soviet help in rebuilding its military. The treaty served them well until Hitler’s rise to power in 1933.

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