74. Captain WATTasked the Secretary to the Overseas Trade Department whether there has been any improvement in regard to the difficulties in securing payment arising from exchange restrictions imposed by various countries; and whether, in the case of those countries where the difficulties remain, it is proposed to institute clearing office arrangements on the lines of those already in force between certain foreign countries?
§ Major COLVILLEIn Finland, Argentina and Spain, among countries where the delay in securing sterling exchange to discharge current obligations to United Kingdom traders has been serious, an improvement has been experienced; indeed, in the first case the difficulties have been largely overcome. I regret, however, to say that in a number of other countries the delays are still serious.
The difficulties experienced by traders in such countries, both in respect of past contracts and current business, are fully appreciated, and the position has been carefully watched by His Majesty's Government so as to ensure that British exporters are treated on an equal footing with the exporters of other countries in the allocation of available exchange. The closest examination has also been given to the question of instituting "clearing office" arrangements.
This examination has shown that such arrangements would involve legislation in this country to enforce payment to the clearing office of sums due by importers to traders in the countries concerned, leading to extensive State interference 476 with trading activities which would tend to diminish the existing volume of British trade with these countries. Moreover, the conclusion of a number of bilateral agreements, and the consequent creation of a series of watertight compartments, must tend to decrease further the payments received by this country in respect of "invisible exports" and so to accentuate the difficulty in our achieving a favourable balance of payments. The working of the bilateral clearing office arrangements which halve recently been instituted between certain countries is reported in many cases to be unsatisfactory.
Having regard to such considerations, His Majesty's Government, as at present advised, feel that as a general principle the adoption by the Government of a "clearing house" system would not on the whole be in the national interest or of benefit to the trading community. I understand that the International Chamber of Commerce Committee on Foreign Exchange Regulations has reached a similar conclusion.
I shall continue to watch the position closely in order that, should it appear that further action can usefully be initiated, steps may be taken accordingly.