FOREIGN RELATIONS, 19 5 0, VOLUME I


time and with a variety of motivations. Long before World War II
for example, exp'ort restrictions were being imposed by various coun-
tries with protective objectives; the prohibition on the export of
tobacco seed by the U.S. is a case in point. Since World War II, an
extensive system of export restrictions has been developed by most
countries of the world for various other purposes, such as to Control
the flow of materials relating to military security, to control the
export of products subsidized or price-fixed at home, to control the
export of products in short supply, and so forth.
  For the most part, however, export restrictions have been imposed
since the end of the war as adjuncts of the network of bilateral trade
agreements which were developed by most countries of the world to
meet existing payments difficulties. These agreements have had infinite
variety, to accommodate the special problems of each pair of countries.
In general, however, they have commonly contained agreements by
each country on at least two lists of products: one list for which coun-
try A agreed to issue export licenses and country B to issue import
licenses, thereby making possible the export of those products from
A to B; and a second list for which country B was committed to issue
the export licenses and country A import licenses, thus clearing the
way for exports from B to A. The two lists were calculated so that, if
the transactions in contemplation were in fact consummated, the
currency flowing each way would be about equal; in that way, neither
country would have to make a net payment to the other in settlement
of trade between them.
   As long as countries lacked the means to pay for the goods of other
countries and as long as most products were in short supply, it was
essential in the operation of a bilateral trading system that extensive
export and import controls be maintained. In the absence of import
controls, the consumers of any country might make inordinate pur-
chases of the goods that another country was glad to export, thereby
imperilling the importing country's program for the acquisition of
products basic to the continued operation of its economy. And, con-
versely, if export controls were abandoned, commodities in scarce
supply might be drained off from the country lacking such controls,
thereby imperilling the operation of its economy.
   However, as the system of bilateral trade agreements has come to
 be extended and refined, added motivations have begun to develop
 for the retention of export controls. Some of these added motivations
 have been:
   (1) Countries extensively engaged in the export of so-called non-
 essential products, notably Holland, Belgium, Switzerland, France
 and Italy, have found it desirable to retain export controls upon
 products desired by other countries in order to use their release as
 a bargaining weapon for obtaining commitments from the other coun-


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