Investment Protection Agreements.
The UK sees considerable value in the
conclusion of bilateral agreements for reciprocal protection of investments,
but negotiations has proved difficult and since December 1974 only four agreements have been signed with developing countries – Egypt, Indonesia, Korea
and Singapore.
Double Taxation Agreements. There were 35 of these agreements in force with
developing countries at the year end,
Industrial Co-operation Agreements
The UK has concluded a few industrial co-operation agreements with developing
countries, mainly in the Middle East. The Department of Industry, which handles these agreements, has no separate budgetary allocation specifically tailored to assist industries in competition with developing country exports,
but an overall objective of the UK's regional and industrial policy instruments is to encourage the transfer of production and workers out of unprofitable sectors of industry and into expanding sectors which are internationally competitive both in relation to developing and developed country production.
Export Credits
28. The value of net export credit (ie disbursements less repayments received) to
the developing countries guaranteed by the Export Credits Guarantee Department (ECGD) grew by about 24% in 1976. Much of this growth was accounted for by shipments of equipment for large projects which are often of a developmental
nature.
29. Late in 1976 it was decided that the currency in which capital goods exports
insured by ECGD is financed would, whenever possible, be switched from sterling to other convertible currencies. This will allow an additional flexibility in
methods of financing of purchases by developing countries.
30. The UK became a party to the Consensus on guidelines for determining the maximum lengths of credit and minimum interest rates for insured exports. This involved very little change in ECGD's terms of cover for developing countries.
31. ECGD is naturally concerned by individual borrowing countries' indebtedness.
The volume of officially supported export credit to all markets, including developing countries is controlled by continual assessment of the situation of the recipient country. In addition arrangements exist for the assessment of the developmental value and viability of large projects in developing countries where this is considered desirable. However debt management is primarily the
responsibility of the borrower.
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