Before the First World War, governmental responsibility in matters relating to overseas trade was shared between the Foreign Office and the Board of Trade. Under an agreement between these departments in the late nineteenth century, the Foreign Office and its overseas representatives were responsible for the conduct of all negotiations, and the Board of Trade provided guidance and information on commercial conditions and policy adn sealt with matters concerning Commonwealth countries, Colonies, etc. The board, which required information to help British traders, possessed no control over the representatives abroad who alone were in a position to supply such information.
The creation of the Department of Overseas Trade on 21 March 1918 represented a compromise between the Foreign Office and the Board of Trade over the questions of the control of commercial representatives abroad and the formulation of commercial policy. Under the Overseas Trade Department (Secretary) Act 1918 it was charged with the duty of collating and disseminating overseas commercial intelligence and administering commercial services abroad.
The department was headed by a parliamentary secretary for overseas trade, who was responsible both to the board's Commercial Intelligence Department, and that section of the Ministry of Blockade's Foreign Trade Department which formerly dealt with matters relating to the promotion of trade abroad.
The department was the effective headquarters of the overseas commercial services, which were considerably extended after the end of the war. Yet the commercial Diplomatic and Consular Services remained under Foreign Office control and carried on their work in the name of the Foreign secretary, while the trade commissioners were appointed by, and the service administered in the name of, the Board of Trade. Nor did the department take over all commercial functions from the parent authorities: it rendered services directly to traders in relation to other traders abroad but the Foreign Office continued to be responsible for political aspects of commercial policy, and the Board of Trade for the protection of British commercial interests abroad.
The department had responsibility for organising the London section of the British Industries Fair and for British participation in overseas exhibitions. It also had an Export Credits Department, dealing with export credits, guarantees, and insurance, until this was constituted the Export Credits Guarantee Department in 1930. Administration of the Imperial Institute was assumed by the Department of Overseas Trade on 1 July 1925 from the Colonial Office, and transferred from the Secretary for Overseas Trade to the Ministry of Education in 1949.
After the Second World War the need for formal machinery to ensure inter-departmental co-operation between the Foreign Office and the Board of Trade declined with the development of a wider system of representation for 'domestic' departments at posts overseas, and the distribution of responsibility for overseas trade between three departments was regarded as too cumbersome. The Department of Overseas Trade was accordingly abolished on 20 March 1946 and its functions transferred to the new Export Promotion Department of the Board of Trade. The post of Secretary for Overseas Trade survived until October 1953, when its remaining functions were transferred to the President of the Board of Trade with special responsibility for the Export Credit Guarantee Department.