FACILITATION OF TRADE

Gisborne Herald, Volume LXVI, Issue 20044, 16 September 1939, Page 14

FACILITATION OF TRADE

BRITAIN AND DOMINION AGREEMENT AMENDED ETAIPIJEIED TERMS ( Pavl i a mcnt ary K <’po rt or. ) WELLINGTON, this clay. Arrangements for the facilitation of trade between New Zealand and Britain under the export credit? system were referred to by the Minister of Finance, the Hon. W. Nash, in the House of Representatives yesterday.

“While in London," he said, "I entered into negotiations with the United Kingdom Government for export credits of £5,000,000 in respect of New Zealand Government imports and £4,000,000 for New Zealand commercial imports. The Government portion of the credit arrangements has been working satisfactorily for some time, but in regard to the £4,000,000 commercial credits there has been a little delay on account of the Government's desire to vary the normal export credits procedure and to simplify it.

“I am now able to announce that an amendment to the agreement has been reached in these matters, and that United Kingdom exporters of goods to Now Zealand are now able to take full advantage of the £4,000,000 credit which has been provided. The procedure to be adopted by those wishing to make use of the scheme is a comparatively simple one. “By producing the necessary documents to the Export Credits Guarantee Department, No. 9 Clements Lane, London, E.C. 4. the United Kingdom exporter is able to obtain the department’s guarantee. This guarantee ensures that, provided the amount of any debt to which the agreement relates, is paid in due course to a banker in the Dominion in New Zealand currency, the exporter will receive payment in sterling of 75 per cent oi' that amount on the expiration of three months from the date of payment in New Zealand, or at June 30. 1940, whichever is the later. Guarantee for Exporters The total amount of the guarantee is limited to £4,000,000 sterling, of which not more than £1,000,000 sterling will be in respect to licensed imoorts falling due for payment latci than June 30, 1940. Under these arrangements, in cases where remittances from New Zealand are deferred. the United Kingdom exporter can obtain a guarantee from the United Kingdom Government and, with this, be should have no difficulty in securing immediate finance from his bankers against shipments of the goods to .New Zealand. ( . “In New Zealand, the uncertainty as to when remittances can he made in individual eases, has been removed by the issue of. remittance authorities by the Reserve Bank. These authorities specify the particular months in which the remitTmces may be made, thus placing importers in a position to make definite arrangements for payments overseas. To this end, the Reserve Bank has authorised the trading banks to enter into forward sterling exchange arrangements in respect oi deferred payments for licensed imports from any country for the period ending June 30, 1940, provided that the relative goods have either arrived in New Zealand or have been shipped; (2) that the importer has, in respect to the transaction, paid into an irrevocable deposit account at a trading bank in New Zealand for eventual remittance by telegraphic transfer or otherwise or a cover payment for the relative draft at or before maturity, or established with his banker an irrevocable letter ol C i-cd't or paid a sight draft or an accepted term draft, in which case the bank may stipulate that the arrangement is conditional on the duut being paid in due course. Forward Sterling Deals “This forward arrangement can be availed of by an importer, regardless of whether or not the exporter takes advantage of the export credit facilitics and provides a means whereby the importer is able to safeguard himself against any variation in the New Zealand rate of exchange on London between the date oi his making the arrangement and the date of the relaive deferred remittances. “Under these combined arrangements, the importer of goods from united Kingdom can rely upon making overseas remittances at specified times, and is able to protect him’elf against exchange variations by having sterling forward at the norma. "for remittances. The United Kingdom exporter, at his end, can obtain immediate finance against de ferred remittances, utilising the export credits guarantee procedure. “With both importer and exporter Able to protect their interests fully trade between the United Kingdom and New Zealand should be fneili‘ated which is the aim and objee* c* all these arrangements."