LAKE CARRIERS TOLD OF E. EUROPE PROSPECTS BULK SHIPPING TO FARE WELL

LAKE CARRIERS TOLD OF E. EUROPE PROSPECTS BULK SHIPPING TO FARE WELL

Opportunities for international shipping lines and shippers will increase as the trade of the fast-changing Eastern European countries shifts away from the Soviet Union to the industrial democracies.

This was the key message offered by Canadian trade consultant Arpad Abonyi at the annual joint conference here of the Cleveland-based Lake Carriers Association and the Canadian Shipowners Association."There will be a dramatic push to increase the quality of products for export to the West," said Mr. Abonyi, president of Ottawa-based Prospectus Investment Trade Partners Inc.

At the same time, the Eastern European countries will need to import large quantities of raw materials.

"These countries have to retool and need more food supplies," James Emery, U.S. Seawayadministrator, noted in an interview.

Mr. Emery, who is taking part in a two-week U.S.-Canadian Seaway trade mission in March that will include stopovers in Vienna, Leningrad and Moscow, said the ports in Eastern Europe cannot handle large container vessels.

"It's got to be breakbulk, and that's our bread and butter."

Frank Nicol, president of the Shipping Federation of Canada, said he agreed that there are opportunities for international carriers.

But because of weaknesses in road and rail infrastructures in Eastern Europe, initially such ports as Riga, Leningrad, Gdansk and Trieste will play the important gateway roles in any trade surge.

Fred Pitre, president of Canada Steamship Lines, largest carrier on the Great Lakes, underlined the prospects of increased bulk shipping business as well as opportunities for countertrade. The latter included new ship construction, considering the world-class shipyards in Poland and Yugoslavia.

Though West Germany is presently in the strongest position to capitalize on increased East-West trade flows, Mr. Abonyi stressed that Eastern Europeans are anxious to develop ties with North American interests to avoid falling under German control.

"With the trend of industry globalization, North America should get in on the ground floor and not leave all the opportunities to western Europeans.

"The Germans, the Swiss and the Austrians are making big moves," Mr. Abonyi noted before urging North American firms not to neglect a future market of several hundred million people that would be larger than the European Community itself.

He acknowledged, however, that "the changes occurring in Eastern Europe will impact on western Europe in about 10 years.

"We are looking, too, at a four- to five-year window before the currencies of Eastern Europe become convertible."

All the former Soviet satellites, Mr. Abonyi said, want to switch to

dollar-trading with the Soviet Union and to get away from the unconvertible Soviet ruble.

Mr. Abonyi indicated that the massive debts to Western financial institutions of such countries as Poland and Hungary unleashed the major changes in Eastern Europe.

Generally speaking, he said, "the political and economic models that Soviet Communists transposed on the region have failed."

Mr. Abonyi said that changes in the region are not happening at the same speed.

He stressed that many obstacles lay in the path of converting "massive state-owned sectors and bureaucracies" to market-oriented economies.

Many basic reforms are required in such vital areas as laws of incorporation - which have not existed for 40 years - and foreign investment and ownership laws.

Evaluating assets for acquisition purposes, Mr. Abonyi said, is proving to be a tricky matter in many cases.

"In some cases, it boils down to who do you pay if no one knows the actual owners."

Thus far, he said, Hungary has led the way in foreign investment and privatization programs.

In Mr. Abonyi's view, the Soviet Union itself remains "a major quagmire" - with the Gorbachev reforms in the political arena not being matched in the economic sectors.