Belgrade — Yugoslavia's new agreement with the European Common Market is an important political as well as economic boost for the Balkan country at a critical moment in its independent stand between East and West.
For Yugoslavs, the agreement is welcome not only for its concessions on trade but also as an acknowledgement that West Europe sees their continuing nonalignment and independence as important to its own stability.
The agreement's principal importance at the moment is psychological, strengthening the Yugoslavs' confidence both in themselves and in the West.
Western observers think this approach serves Western interests as well.
Regardless of the risks and of its own ideological position, communist Yugoslavia is seen not just as a country that is in general line with the international community's condemnation of Soviet intervention in Afghanistan and and the demand for a Soviet withdrawal as a necessary precondition to restoring detente.
It is also regarded as a country that may be relied on to fight for its independence, were it to be threatened.
Yugoslavia will not retreat from nonalignment. But Western economic support must inevitabley bring Yugoslavia that much closer to the West in terms of common cause and interest.
The agreement initialed Feb. 24 in Brussels removes many of the barriers that have blocked Yugoslav exports and caused a trade imbalance of nearly $3 billion with the EEC countries.
It will enable the Yugoslavs to restore and increase their prime beef exports (worth some $200 million annually) as well as those of other agricultural products.
The agreement includes credits from the European Investment Bank amounting to
Later this week, the World Bank will announce a third sizable credit line to assist agrigulture in the less-developed Yugoslav south.
For the Yuguslavs both developments ar indications of Western interest in their bid for economic stability at a time when it is most vital to their security.
They regard their geopolitical position in the Adriatic-Mediterranean area as being as important to West European interests, particularly for Italy and neutral Austria, as to themselves.
It has taken the present international crisis -- and the uncertainty of President Tito's health -- to persuade the West Europeans to show some common front in helping Yugoslavia out in its present enormous economic difficulties.
The urgency was undelined by the Feb. 25 bulletin on President Tito's condition.It was, in fact, the gravest report since he entered the hospital in mid-January.
The new trade agreement cannot produce any quick major change in the Yugoslavs' present deficit situation.
That will come about only if and when they can effectively carry through their new program of restraints on consumption, increase productivity, and improve the competitiveness of their goods on Western markets.