775 items of the tariff nomenclature were freed by Norway's action; the overall liberalization amounted to 84 percent. In its action, Norway removed quantitative restrictions from virtually all imports of foods, feedstuffs, and raw materials from the United States and Canada, but from only 61 percent of imports in the category of manufactured products. The latter included tractors and a large number of various other agricultural machines and implements, locomotives, parts and motors for automobiles, tires and tubes, a large number of machine tools, electric motors, radio tubes, petroleum products, and textiles (except clothing). The list, which was limited to goods already on the OEEC liberalization list, consisted mainly of goods that Norway had been licensing liberally from the dollar area before July 1956.

On November 1, 1956, and April 1, 1957, Norway added a total of 45 more items to its dollar liberalization list, including certain fruits, chemical products, and machinery and parts. These additions, however, had no appreciable effect on the liberalization percentages of July 1, 1956, because imports of these products had been negligible in the base year 1953. As of June 1957, Norway had liberalized 1,800 statistical items for the OEEC area and 1,500 for the dollar area; however, most of the 300 items not yet formally liberalized for the dollar area were being licensed liberally. According to Norway, there was virtually no de facto discrimination against dollar imports except for automobiles. At the same time that Norway adopted its first dollar liberalization measure (July 1, 1956), it also extended the application of most of its so-called global quotas (previously applied mainly to European countries) to the dollar area. Under this system of control, imports of various commodities that had not been liberalized were admitted on an annual-quota basis.

Sweden.-Sweden's first liberalization of dollar imports, which covered 58 percent of its total private imports from the United States and Canada, took place late in 1954. An additional 6 percent of such imports were liberalized at the beginning of 1956, and another 4 percent on July 1, 1956. Thus, on the basis of 1953 import trade, 68 percent of Sweden's private imports from the United States and Canada were free of restrictions on July 1, 1956. On the basis of preliminary Swedish import statistics for 1955, the liberalization of Sweden's private imports from the United States amounted to more than 80 percent of the total of such imports.

Commodities that Sweden added to its liberalization list on July 1, 1956, include linseed oil; cocoa beans, powder, and butter; a number of fish items; fur skins; natural rubber; paper pulp and newsprint; pig iron; aluminum; nickel; magnesium; antimony; cobalt; cadmium; copper alloys; metal scrap; tires and inner tubes; cameras; projectors; certain musical instruments; cosmetics; jewelry; toys; and plastic products. Most of the newly liberalized items were formerly on Sweden's transitdollar list. Imports from the dollar area of items on this list are licensed

17

freely if purchased via a nondollar country or against payment in dollars purchased with inconvertible currencies; authorized Swedish banks purchase such currencies from foreign banks at a premium over the parity rate and sell them at a higher premium to Swedish importers. 17 Sweden has liberally licensed various nonliberalized imports from the United States and Canada, particularly corn, barley, oats, citrus fruits, soybeans, and coal.

United Kingdom.-During the period covered by this report the United Kingdom did not add appreciably to its list of liberalized private imports from the United States and Canada. Because of its unfavorable position with respect to convertible currencies, the United Kingdom was unwilling to make more than a few concessions to the requests of the United States and Canada for removal of British import restrictions on a broad basis. At the beginning of 1956 the United Kingdom had freed from import controls 56 percent of its private imports from the United States and Canada, but by June 30, 1957, it had liberalized only another 3 percent. On July 22, 1956, woodpulp, paper (other than newsprint), and paperboard were added to the liberalized list; and on November 12, 1956, whisky was added to it. By these two actions the United Kingdom increased its liberalization of dollar imports to 59 percent, and its liberalization of imports from the OEEC area, to 94 percent.

The United Kingdom's system of import controls and import liberalization differs markedly from that employed by most other OEEC countries. Under its system of world open general license the United Kingdom lists products that may be imported without restriction from any country; whisky, woodpulp, and the other items reported above as having been added to the liberalization list were liberalized by being placed on open general license. Products importable under open individual license may be entered freely from any country by individual importers to whom such licenses are granted; grains, metals, oilseeds, and softwoods are among the products subject to that type of license. Products that are not importable under world open general license or open individual license are subject to individual license-that is, importers must obtain separate licenses for each transaction. Tobacco, chemicals, fresh fruits, canned fruits, canned salmon, leather, and many other products are subject to individual license. The United Kingdom's token-import plan operates under the individual-licensing system. Under this plan, specified consumer products are admitted on a quota basis from the United States and Canada. 18

17 After promulgation of the liberalization measure of July 1, 1956, the transit-dollar import list was reduced to relatively few commodities; the reduced list included fresh citrus fruits and grapes, coffee, copra, certain vegetable oils and fatty acids, tobacco products, crude copper, lead, tin, zinc, and airplanes.

18 See Operation of the Trade Agreements Program (ninth report), p. 168.

THE OVERSEAS STERLING AREA

Because the United Kingdom collaborates closely with the OEEC countries in removing restrictions on intra-OEEC trade, the liberalization of the United Kingdom's controls on imports from the dollar area was discussed in the immediately preceding section of this chapter. Although the other countries of the sterling area 19 participate with the United Kingdom in the clearing arrangements of the European Payments Union, they are under no obligation-as is the United Kingdom-to participate in the liberalization schedule set up by the OEEC. Each of these other countries follows its own policy in applying trade restrictions to imports from the dollar area, the sterling area, and the OEEC area, as well as to imports from any other country. However, there is a common outlook on the rest of the world since all these countries (except the Union of South Africa) cooperate with the United Kingdom in maintaining the sterling area's dollar pool, and all of them participate in ministerial conferences to correlate their trade policies and objectives.

The sterling area was an outgrowth of the United Kingdom's exchangecontrol system; its effectiveness results from the common action that its members take to safeguard the balance-of-payments position of the entire area. Moreover, the British countries within the sterling area have a common interest in maintaining the benefits that accrue to them from their participation, under the Ottawa Agreements, in the system of British imperial preference. The systems of import controls employed by most of the overseas British members of the sterling area are much like that employed by the United Kingdom; they are characterized by the use of open general licenses, open individual licenses, individual licenses, and import quotas.

During the period covered by this report there was no change in the basic import policies of any of the sterling-area countries,20 and there was very little change in the application of those policies, except by Australia and India.

Australia

In 1956-57, as in previous years, Australia continued to rigidly control imports from all countries. On July 1, 1956, Australia intensified its restrictions on commodities imported from soft-currency countries by reducing its exchange budget and its quotas for such commodities. Among the hundreds of commodities subjected to the intensified restrictions on

19 Besides the United Kingdom, the sterling area comprises all British Commonwealth countries except Canada; all British colonies, protectorates, protected states, and trust territories; and several non-Commonwealth members of the sterling area—Burma, Iceland, Iraq, Ireland, the Hashemite Kingdom of Jordan, and Libya.

20 For a more extended reference to the policies of some of these countries during 1955-56, see Operation of the Trade Agreements Program (ninth report), pp. 170-179.

soft-currency goods were fully assembled automobiles, unassembled automobile chassis, whisky, cigarettes, floor coverings, and many other consumer goods. On January 1, 1957, following an improvement in its balance-of-payments position, Australia relaxed its restrictions on imports of soft-currency goods by increasing its exchange budget and its quotas for such goods. Capital goods, textile raw materials, and chemicals were the principal commodities affected by the relaxation. During the first half of 1957 Australia further relaxed its controls for soft-currency goods.

During 1956-57 there was virtually no change in Australia's treatment of imports from the dollar area. The dollar import budget remained unchanged, and imports from the dollar area continued to be restricted to essential commodities and to some other commodities that were not obtainable either locally or from nondollar sources. Most imports into Australia from the United States and other dollar countries are not subject to specific quota limitations; each application for a license to import from dollar sources is subject to individual licensing. Australia does, however, have a special foreign-exchange budget (established in 1955), under which some commodities are permitted to enter the country under global quota, subject to open general license. About 15 items, including the principal nonferrous metals, ferrous alloys, raw cotton, sulfur, hog casings, pulp for the manufacture of paper, leaf tobacco, and crude asbestos fiber, are subject to this type of treatment. Within the global quota, these commodities may be imported from any source.

India

India controls imports on the basis of 6-month licensing periods that begin on January 1 and July 1 of each year. Commodities are imported from the dollar area either under open general license, without quantitative restriction, or under individual import permits. Open general licenses are applicable to commodities from all sources without discrimination. India is much more liberal in licensing imports of commodities that it requires for industrial development, such as raw materials and machinery, than it is in licensing imports of less essential goods, especially those that can be produced domestically in adequate quantities.

India's restrictions on imports of dollar goods are generally more severe than its restrictions on imports from nondollar sources, but the degree of discrimination against dollar imports is sometimes considerably reduced for an entire licensing period. This often results from reducing imports of nondollar commodities rather than from specifically providing for an increase in imports of dollar commodities. For the July-December 1956 licensing period, India generally tightened its restrictions on imports of consumer goods and of those commodities considered to be relatively less essential, and increased the quota for commodities regarded as necessary for the country's economic development under its ambitious 5-year

plan. General import quotas were reduced on 73 tariff items, including glass, certain chemicals, and wool and woolen fabrics. Thirty-one tariff items that previously had been licensed liberally, including haberdashery, watches, and fish, were placed under quota. On the other hand, general import quotas for spare parts for machinery and for industrial raw materials were increased. Dollar quotas (as distinct from general quotas) were increased for machine tools, and a dollar quota, not available in the preceding 6-month period, was established for electric ranges. Dollar quotas were reduced for hacksaw blades, air compressors, aureomycin, spark plugs, and some other commodities. Restrictions on imports from the dollar area were also relaxed for the July-December 1956 licensing period by making a stated percentage of the face value of soft-currencyarea licenses valid for imports from the dollar area. Some of the commodities thus affected were fruits of all kinds, safety-razor blades, certain chemicals, and specific categories of household hardware.

For the January-June 1957 licensing period, India imposed new restrictions on imports of more than 500 commodities listed in the “less essential" category. Dollar imports were accorded more favorable treatment than in the preceding licensing period by increasing the percentage of the face value of soft-currency-area licenses that could be utilized for imports from the dollar area. Dollar quotas were increased for imports of machine-worked cutters, certain diesel engines, and a few other commodities; dollar quotas were reduced for imports of fruit, liquor, tobacco products, soap, woolens, certain fabrics, cinema films, cutlery, hardware, watches, and a few other commodities. Late in the spring of 1957 India took steps to further reduce its imports of capital goods. It also ceased to license imports of cotton from the sterling area; licensing of such imports from the United States had already ceased.

Ceylon, New Zealand, Pakistan, Rhodesia-Nyasaland, and the Union of South Africa

In July 1956 Ceylon placed imports of a few additional commodities. under its special open general license for the dollar area; the commodities included prepared cereal foods, raw sugar, cotton, stearic acid, tinplate, cutlery, razor blades, certain metal manufactures, and certain kinds of animal and vegetable oils and fats.

New Zealand requires licenses for imports from the dollar area except for those relatively few commodities that are exempt from import licensing for all sources. Licenses for imports into New Zealand from the United States and other dollar countries are granted only if the commodities are officially considered essential to the country's economy and if they cannot be obtained either domestically or from sterling or other nondollar sources. During 1956-57, as in previous years, New Zealand continued to grant dollar licenses chiefly for raw materials, plant equipment, and other commodities required for industrial and building activities. There was like