Joint Trade and Payments Committee (OEEC)

Date of Founding

Date of Abolition

Location

The Joint Trade and Intra-European Payments Committee was a technical ‘horizontal’ committee within the Organisation for European Economic Cooperation (OEEC). It was created in May 1948, and dealt with the interrelated problems of trade and payments within the OEEC. The two goals that were encapsulated in the founding documents of the OEEC, the liberalization of trade and the multilateralization of payments, could not be dealt with separately.

In fact, the OEEC prioritized the monetary route of multilateral payments compensations in order to increase intra-European trade and to increase production – rather than liberalizing trade straight away by reducing trade barriers. Trade liberalization at a too fast pace could have dramatic social and economic consequences. Moreover, by its increasing of international economic competition, it could completely upset the balance of payments for countries – causing inflation and unemployment.

Thus, monetary cooperation was used to smoothen intra-European trade. This way, European countries were able to achieve a gradual growth in their intra-European trade, without damaging their precarious social domestic stability. On the other hand, whenever trade barriers were torn down, an adequate monetary clearing mechanism had to be in place, if there was not to be a shortage of currency that could lead to policies of competitive devaluation.