Hard Currency Settlement of Payments or Bilateralism and Clearing: How Long will the Dilemma Remain?

Abstract

Ever since the completion of the liberalisation of external trade in the 1950s, the mutual trade of the OECD countries has been characterised by some evident features: transactions are settled in convertible currency; trade balances do not exert influence on the development of trade, except in cases of extraordinary imbalance; state influence on trade is mostly indirect, and its means are financial ones; trading activity of enterprises is supported by a wide range of financial institutions; and a substantial part of the trade is related to international co-operation between enterprises or inside individual enterprises with production sites in different countries. Approximately 70 per cent of world trade falls to the mutual trade of the OECD countries and in this trade the above-mentioned characteristics of trading practice are predominant.¹ Since the trading practice of Newly Industrialised Countries (NICs), which occupy an ever growing segment of world trade, tends to correspond to the above conditions, it is no exaggeration to say that these conditions reflect the requirements of the contemporary world economy or, in less normative wording, they characterise the great majority of contemporary world trade.