FREEING WORLD TRADE

Press, Volume XC, Issue 27407, 21 July 1954, Page 3

FREEING WORLD TRADE

“ REAL PROGRESS ” NOW POSSIBLE WORLD ECONOMIC IMPROVEMENT (l> rom <Jui Ke-pnriet i WELLINGTON, July 20. Convertibility of currencies and further liberalisation of trade ‘‘can now be discussed for the first, time since the war in the knowledge that real progress towards these objectives is possible,” according to the 1954 Economic Survey, tabled in the. House of Representatives today by the Prime Minister and Minister of Finance (Mr Holland). This is a result of improvement in the world economy in the last two years, the survey says. ‘‘Monetary inflation has almost stopped in most countries. International raw materials prices have been more stable, and, in most countries, so have domestic prices. New levels in world industrial production have been attained.” The sterling area’s gold and dollar reserves stood, at the end of June this year, at 3,017,000,000 dollars, but with a trade turnover with the rest of th? world of more than 15,000,000.000 dollars, this was not sufficient reserve to support sterling convertibility. “Progress towards convertibility of sterling will depend partly on the availability of supplementary reserves from sources such as the International Monetary Fund,” says the survey. ‘‘Commonwealth Finance Ministers reaffirmed in Sydney this year their intention to work as far as possible through existing organisations dealing with trade and finance. IJH.F. Willing to Assist “The Internationa] Monetary Fund has now stated its willingness to assist financially further steps towards convertibility and freer trade,” the survey says. “The functions of the International Monetary Fund and also of the General Agreement on Tariffs and Trade will become even more important with progress towards freer trade and currencies, and their rules, procedures, and organisation will need close examination and review in some respects if they are to play a full and effective part.” After describing the activities of the commission recently appointed in the United States to report on foreign eco-

nomic policy, the survey says it now remains for Congress to determine its attitude towards the recommendations of this commission. “It is to be hoped that, when the foreign economic policies of the United States are Anally determined, they will assist other countries of the world to expand their trade with the United States and so remove the need for economic aid and restrictions on trade and payments with the dollar area.” » A serious depression is not likely to develop from the present situation in the United States, but it is prudent to be prepared for such a contingency, the survey says. “The Commonwealth countries agreed m Sydney that, in the event of a United States recession, their policies should aim at avoiding action which would lead to a general decline in world trade or which would add to problems set for the rest of the world by recession in the United States. “The Ministers were determined to avoid a return to restrictions on trade and payments between their countries. They realised that to maintain the level of trade it might be necessary to draw on external reserves and to seek assistance from such international institutions as the International Monetary Fund,” the survey says.