A system of multilateral trade means no more, fundamentally, than the right of exporters of a country to sell in any market and the right of importers to buy in any market. The right to export must be without discrimination and with complete freedom to transfer the proceeds of exports; and the right to import must be without discrimination and with complete freedom to transfer the funds to pay for imports. In short, multilateral trade involves the convertibility of currencies for current payments and the absence of any discrimination in exports and imports on the basis of the country with which or the currency in which the trade is undertaken.

On the face of it, multilateral trade yields the greatest benefits to each country from any given volume of exports and imports. As the exports can be sold in the highest-priced markets, without regard to the currency in which payment is received, the money value of the exports will be maximized. And as the imports can be bought in the lowest-priced markets, without regard to the currency in which payment is made, the money cost of the imports will be minimized. On the other hand, under bilateral trade, it becomes necessary to import, even at higher cost, from those markets whose currencies are available from export proceeds. And it becomes desirable to export, even at lower price, to those markets whose currencies are needed to pay for more essential imports. Because it is difficult to direct exports on the basis of social need for currencies, there will be a strong tendency to secure the bilateral balancing of payments through a restriction of imports by the country with a bilateral deficit.