Evening star., 1947-12-28


DR.. Eelco van Kleffens, Neither
lands Ambassador here, said in a
recent speech at New York that the
Of the Benelux union
lies in the fact that three countries
in these days when trade still Ian
guishes, bound by innnumerable fet-
tiers, can come together and say
to each other our problems are your
problems
The Belgian Senate committees
July report stressed that the Gus
toms union going into effect this
week lis only part of greater task
"It attains its true worth and
effective scope only if we place it in
it's more elevated framework" the
committee declared. "As such, 1t IS
inspired by motives and considera-
tions that are just; it advances in
a hoped-for direction, that IS to say,
the enlargement of the spheres OF
production and circulation OF wealth
beyond political frontiers which
have become economically too
narrow. -
"It is to be hoped that in lowering
one of the obstacles to the circula-
ton of wealth between two strong
and healthy economic regions, on
the road to returning prosperity, 1t
will aid or favor an expansion OF
the total amount of business In
the three interested countries. -
THE economic conditions Of Eu-
rope and the world after the war
have clearly shown that outside OF
the road which leads to organic
union of national economies, there
is no hope for any one.
Organic Union Only Hope
THE customs union with the
Netherlands is a first step on the
road to economic union. 1t is first
step along the road of more all
embracing agreements which will
prepare and bring about with other
friendly countries, the successive
rapprochements, the attainment OF
which will permit obtaining a better
and freer organization of economic
forces in the world"
One economic problem critical TOR
the nations Of Western Europe
that of paying for goods imported
from another country-is not dealt
with directly in the Benelux Gus
toms Union agreement, But the
Benelux countries have tackled it
In the same spirit of cooperation.
In 1s43, Belgium and the Neither
lands negotiated an agreement un-
der which they have been extending
credit to each other on a relatively
large scale. Belgium undertook to
provide the Netherlands with Bel
gian francs to make payments for
imports from Belgium and the
Netherlands undertook to provide
Dutch guilders to Belgium to pay
for imports from the Netherlands.
The net credit is limited in amount,
with excess imports paid for by the
transfer of gold or dollars. But this
Belgian-Dutch agreement became
the model for 129 European pay
ments involving aggregate credit
margins of $95,OOO,0oo. Now, the
near exhaustion Of these credits IN
many cases has put the brakes on
further expansion Of inter-Euro-
pean trade.
Wider Credit Planned
A wider scheme was suggested by
the Benelx countries to the con-
ference of is Western European
nations at Paris last summer This
involves a system whereby each
country could set of debts against
credits by means of the intertrans-
ferability of European currencies.
such a system would be OF tre-
mendous help under present-day
conditions" Mr.. Van Kleffens ex-
planned. Under the existing BIZ
lateral agreements a country having
a trading deficit with another courl-
try has to settle it in gold or con-
vertible currencies.
"The Benelux proposal would tend
to reduce to q minimum payments
in gold or convertible currencies.
The adoption of such system would
relax and probably replace the
present procedure Of bilateral ex-
changes.
"It has resulted in conferences Of
experts Of the 16 Marshall plan
countries, first in London and later
in Paris. Finally, in November,
the Netherlands and Lux
embo,lrg, which on this occasion
were joined by France and Italy,
an agreement providing
for the periodic compensation Of
balance OF payments-surpluses or
deficits.
Open to Other Countries
I'm practice this will take the
form that each month represent
atives of the central banks Of these
countries will meet and find out how
far compensation is possible.
The agreement is open to any
country which wishes to adhere.
this is an attractive
'eature-any country can participate
occasionally in the monthly COM
oensation without committing itself
20 the provisions Of the entire agree
nent.
"It seems to me that this agree
nent is very important step toward
the relaxation Of European
Further elaboration Of
his idea would do much to strength
en- ties among European countries
and thus enhance European pro-
duction. 1t would make Europe
more self sufficient than it is now
and less dependent on outside help.
1t would be the greatest help in