(Mr Checketts
The Venetians invented money, did they not, to
trade with? There is less and less of it around and I think each
nation which counter-trades would rather trade in money if it could.
If it cannot export its goods and generate the foreign exchange to
import, there has to be another lever applied and counter-trade is the
lever that they apply. The emphasis on counter-trade is the percentage
that they demand that you counter-trade on each contract they offer you
and in Eastern Burope, which is really where the contract flourished or
began and flourished, it works moderately well. Percentages can vary
from 5, 10, 15 to 100 per cent, depending on the country's economic
situation.
202.
mentioned.
Mr Mikardo
In one case I know of, 145 per cent.
(Mr Checketts) Fortunately, that has never happened to me but
I can well imagine it might happen to others. Indonesia is the case you
It is a country which has not developed its export markets.
It has been slow to develop its export markets. It has exportable products
and they do not wish to reduce their import plans because of their
current foreign exchange shortage, but they hope to generate more foreign
exchange funds by introducing these counter-trade regulations.
We have, in the UK, responded sympathetically to them and it was very
important that we should. We have done; we have had very serious meetings
joint with thom about it in London and in Jakarta and the/working party
which I referred to has played a considerable part in exploring
the mechanisms for this counter-trade, so that we could advise British
industry to say yes and not no. It is very important, when you are
asked to sign a document saying you will counter-trade or will you counter-
trade, to say yes. There are usually enough avenues of negotiation to
allow you to reach a compromise on their demands and your possibilities
of supply to get over the problem but if you say no in principle, you
are not going to be considered as a bidder.
22