2510109655

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TFD/PC/182

11.    Several e:cperts expressed an interest in the-multilateral

arrangement; referred- to as the ⁿHague Club”, between Erazil, Federal Germany, the Netherlands and the United Kingdoro, which provides fchafe there should be no discrimination in current trade or paymencs between Brazii and the monetary areas cf the other • countries. (1) The experr of the United Kingdom pointed out, hcv;ever, that an esser.tial element in thls arrangement was the fact that Braąil had liberalised its imports from the other countries (and their monetary areas); it seemed to hlm, therefore that bgfore suoh- a system could be applied to trade between Kastern and Western European countries much progress toward liberalisation would need to be madę. Nearly all of the experts present seemed to be unaware of the v;sy in which the ⁿHague Club” arrangement worked - and it was not explained in the E.C.E, Secretorist¹s Paper,* The Russian e/pert, for exarr.ple, sald that it would mean that each country in the group would have to maintain reserves of all the other currencles In fact, it , appears that it is only necessary for each countryłs comblned rcserves of all the other currencles in the system.to be sufficlent to cover any overali deficit towards the other rr.embera as a whole, or else for it to l:eep in overall balanee with chem.

12.    The only additional suggestion for Improving payments •relations was madę by the experts of the eastern countries. They suggcsted that there should be provision fcr a temporary increase of the regular swing credit to cover seasonal fluctuations. The experts from several E.P,U. countries pointed out that this would be equivalent to treating the regular swing credit as a medium

or lcng-terrn credit and that they considered that bilateral swing creoits should be strictly reserved for the cover of seasonal fluctuations. It was decided not to refer to swing credits in the Working Party*s recommendations.

15* Agreement was finally reached on two recommendations. The first was¹ that governments should inrlude in their bilateral agreements clausęs. envisaging triangular and/or multilateral compensaticns. The experts of most of the western countries sald that they saw no useful purpose in this first recotnmendation sińce

1

The finał provisions do not appear to have been adopted.

however, under regulaticns published In ^Traził in August 1955 Brazilian importera may purchase at auctions held in Rio de Janeiro, exchange certificates in "limited convertibility area dollars” valid in payment of imports from the area comprised by Federal Germany, the Netherlónds and the United Kingdom (including their monetary areas). At the same time, importera in this ^Mliraited convertibility area” may pay for their imports from I.razil in Deutsche marks, guilders or sterling.