2510109653

TPD/PC/182

enable them to buy morę from the western countries in the next year. This trend, combined with the better political atmosphere, was leading both groups to reconsider the whole question of their trade and payments relationships and provided grounds for guarded optimism concernjng the achievement of a higher level of trade.

In these clrcumstanccs, tkere was an increasing need to break away from the rigid bilateralism which characterised so many East/West trade relationsiIps. I e was surę that the present type of payments arrangements between eastern and western countries would be extremely unsatisfactcry in, say, five to ten years* time.

3. In the first round of dlscusslon many of the experts, from both western and eastern countries, sald that, while biiateral agreements were probably at present the best means of increasing trade, these v.^Tere, in some cases, already becoming restrictive and sooner or later multilaterol arrangements would have to be developed. Most of them seemed to consider that this development would oni/ take place gradually, e.g. over the five to ten year period mentioned by Mr. Myrdal.

As a basis for its discussiens, the Working Party had before it a notę prepared by the E.C.E. Secretariat which outlined a system of voluntary multilateral compensations and suggested other ways in which payments arrangements ceuld be imprcved, The system suggested was similar to that provided under the first Agreement on Multilateral Monetary Compensations of November,

19^-7, between the    ,' France, Italy and the Netherlands,

and the two intra-Eurcpean Payments Agreements of 19^8 - 1950. Under lt,balances would be reported regularly to a central Agent who would propose:

either, only ¹¹ first categcry compensations", i.e, those

in which all the balances concerned are reduced;

t    ¹    -

or,- also "second category compensations¹¹, i.e* those in

which, in ti.e case of one country, a claim is created

or debt incurred.

5# It was pointed out in the paper that Eastern European countries already rnade considerable use of third currency transfers, in sterling or in ^!łlimited convertibility Deutsche marks”, and that these transfers achieved the same results as second categcry compensations, wit.out requiring the approval of the countries (United Kingdom and Federal Germany) whose currency was used.