FOREIGN ECONOMIC AND COMMERCIAL POLICY


continue. To name a ffew of these favorable factors, we would call
attention to the substantial increase in productive capacity in the
United Kingdom home market; the high prices for many of the major
exports of the dependent overseas territories; increasing availability
of needed imports in soft-currency areas at prices increasingly com-
petitive with prices in the dollar area; the high level of demand in the
dollar area, with the prospect that this will continue for a considerable
period; the effect of devaluation upon the competitive position of
United Kingdom exports in dollar markets; and the effects to be
anticipated from the investment of time and effort which has been put
into the United Kingdom's dollar export drive.
   On the other hand, we must not be unmindful of the fact, to which
 the United Kingdom delegate has quite properly drawn attention,
 that many uncertainties lie ahead. The exact consequences of the re-
 armament effort, in which the United Kingdom is participating with
 other Contracting Parties as a result of the Korean war, are uncertain..
 This effort has introduced both favorable and unfavorable factors into,
 the situation. The exact extent of the program and the exact nature of
 the role which the United Kingdom will play in it are not yet definitely
 known. Therefore, our Delegation would agree that we are not dealing
 with a one-sided picture, and that the conclusion to which we come as:
 a result of the consideration of the favorable factors to which we have
 referred must be tempered with the recognition that real possibilities
 of difficulty also exist.
   We have watched with interest the leadership which the United
 Kingdom has taken in carrying out a liberalization of restrictions
 against imports from certain soft-currency countries. We have recog-
 nized this action as a step in progress towards a worldwide multilateral
 trading system and convertibility of currencies. We have felt that it
 was taken in conformity with the spirit in which all of us have
 entered into the GATT that restrictions, particularly discriminatory
 restrictions, are the exception to the rule and should be relaxed as the
 situation which led to their imposition improved and should be
 removed when the circumstances which led to their imposition have
 been corrected.
 We have been looking forward to the day when a beginning might be
 made in the same spirit in the relaxation of the restrictions which the
 United Kingdom has ifelt it necessary to impose on imports from the
 dollar area.
 On the basis of our study of the problem, of the facts presented to usý
 by the representatives of the United Kingdom and of the International
Monetary Fund, we believe that that day has come.


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