Vanderbilt Law Review

First Page



State trading-trade conducted internationally by a state or public agency-has become a feature of the mixed economies of southeast Asia. With the growing importance of economic planning and the increase of state intervention (often tantamount to absolute control)in areas of the economy of individual southeast Asian countries, there has been an expansion of international trading functions by states or public agencies. Much of this trade is conducted at a state to state level, i.e., on a bilateral basis. This kind of infrastructure is attributable in part to the fact that the Communist bloc countries generally either have no place for the private trader or else regard him with particular caution. Ceylon's bilateral trade is a result of its market instability and its search for economic independence. Al-though its dealings are largely with Communist China, it is unlikely that Ceylon will make a permanent shift out of world markets in favor of total bilateral trade. India's trade with the Soviet bloc, on the other hand, is motivated largely by the desire to display economic and political neutrality by opening its gates to trade with all countries. In the case of Burma, expansion of markets for rice at a time when it was having difficulty selling in its traditional markets was,perhaps, the crucial factor. The situation of Indonesia, whose position in the world market for primary products was particularly strong, is more difficult to explain. It is possible that the Sino-Soviet bloc found in Indonesia a useful source for much needed materials and offered her especially attractive terms for her industrial development in return for those materials; in addition, a good deal of political sympathy for Communist China within Indonesia led to a certain acquiescence in bilateralism, even though the nature of the Indonesian economy did not warrant any such predisposition.