Organization for European Economic Cooperation

Extract

A report of the Organization for European Economic Cooperation (OEEC) on the relaxation of quantitative restrictions on imports of goods and restrictions on invisible transactions and transfers relating to the dollar area was made public during the period under review. The report was based on the replies of OEEC countries to a questionnaire approved by the OEEC Council, and on memoranda submitted by the two associate members, Canada and the United States. According to the report, substantial progress had been made since 1953 in the liberalization of imports from the dollar area and the relaxation of quantitative restrictions on imports of non-freed dollar commodities, with the extent and rapidity of the progress varying from one country to another. In general, the level of liberalization had been less for manufactured goods than for food and raw materials. In analyzing the effects of liberalization, the report stated that the very appreciable increase in dollar imports of raw materials and basic commodities had been not so much the result of liberalization itself as of the increased economic activity in member countries; and that on the whole, there had not been any sudden large-scale increase in imports from the dollar area of manufactured goods which had been freed by some countries. Since the imports of freed commodities from the United States and Canada had taken place against the background of a general increase in member countries' imports, there had not been generally any adverse change in the pattern of imports, particularly in regard to intra-European imports or those from other non-dollar countries. Nevertheless, the report stated, the increase in imports had contributed to the deterioration of the trade balance of member countries with the associated countries during the second half of 1954 and the first half of 1955, since exports to these countries did not rise above the 1953 level. However, because of increased American military expenditure in Europe, the current balance of member countries as a whole with the associated countries still showed a slight surplus.