Anglo-American Negotiations and a New Bank Route to Convertibility
The official text of the Commonwealth Economic Conference communique published on 11 December 1952 indicated in very broad terms that international action was required to create the conditions for the expansion of world trade and production. The aim would be to secure agreement on the adoption of policies by creditor and debtor countries to restore balance in the world economy on the basis of ‘Trade, not aid’ and by progressive steps to create an effective multilateral trade and payments system covering the widest possible area. The restoration of sterling convertibility was judged to be an integral part of this move to multilateralism but the achievement of convertibility would depend upon three conditions: firstly, the continuing success of the internal action taken by sterling Commonwealth countries to curb inflation and correct the deficit in the Sterling Area balance of payments; secondly, the general adoption of trade policies conducive to the expansion of world trade; and thirdly, the availability of adequate financial support through the IMF or otherwise to accompany convertibility.
KeywordsTrade Policy Collective Approach Flexible Rate Bank Rate Multilateral System
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