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CREDIT INSURANCE: SCMP
4/12/67
Hongkong Qualified For Membership
Of Berne Union
Hongkong, which only just over a year ago became the 25th place in the world to establish an exports credits insurance organisation, already has fulfilled two of the necessary requirements to allow the Colony to qualify for membership of the Berne Union.
These are the minimum num- ber of members and minimum total amount of cover. Now it has only to fulfil the other qualification-to have been jo existence three years.
Mr D. C. W. Hill, Manager of the Export Credit Insurance Corpn, said this last night in the first part of a two-part public lecture about the ECIC he is giving at the City Hall under the auspices of the Hongkong Uni- versity Extra-Mural Affairs De- partment.
He dealt with the principles and functions internationally of credit insurance. Next Thurs- day, he will talk specifically on how this increasingly important ancillary force in international trade has succeeded in long- kobg.
Advantages
Mr Hill said: “We will make application early naxt
year to join the Berne Union. Member- ship would give us important advantages.”.
The Union, formed in 1934, now has more than 20 member countries.
Its purposes were to:
Foster development of cre- dit insurance on an orderly and rational international basis and exchange information on such matters.
Exchange information on payment performances of indivi- dual importers and the economic condition of individual countries. thus minimising the risk of being duped by unscrupulous credit seekers.
-Establish and adhere to-ba- sic agreements about the maxi- mum terms of credit in re- lations to goods concerned, thus minimising the risk of the use of credit insurance for artificial trade promotion of a country's exports.
J
On this last, he said: "For example, the generally accepted maximum terms of credit
for
the type of consumer goods pro- duced in Hongkong are four to six months. If a credit insurer decided to stimulate the sale of its own country's goods by offering to insure credit sales of textiles and plastic goods on nine months terms, the pattern of international trade would be seriously disrupted. A fruitless credit race could result."
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Mr Hill pointed out the ECIC was not in business to subsidise exports, for this would breach a clause in the General Agreement on Tariffs and Trade.
There had been no overt move made on ECIC to get it to help direct trade from one area to another. But the activities of an export credit insurance scheme should produce information help a country diversify more its trade. This, in fact, was happen- thg to some extent in Hongkong.
to
The ECIC was one of the three statutory bodies set up by Gov- ernment over the past 18 months with the aim of improving the Colony's competitive position in the world. (The others are the Trade Development Council and Productivity Council and Cen- tre.)