Doubts about the EEC

July 22, 1963

It seems only yesterday that everyone was hailing the Common Market as an epoch-making step toward world freedom of trade, and a great new force to which the rest of us would have to adjust. Our own government gave it moral and political support. We frowned on the efforts of Britain and other countries to form a countervailing Free Trade Area, and urged them to seek admission to the Common Market, or (as it is officially called) the European Economic Community. Finally, the U.S. decided that its own most important step in the field of foreign trade should be to negotiate reciprocal tariff reductions with the Common Market, and enacted a law specifically designed to do that.

Then came a series of blows, delivered chiefly by President de Gaulle. When Britain, after many misgivings, applied for admission to the Common Market, her application was peremptorily rejected. Our own efforts to get the Common Market to reduce its high tariffs against imports of our poultry met with failure.

The shock was not only to Britain and the U.S., but to the Common Market countries themselves. Suddenly they realized that in France’s (or at least de Gaulle’s) opinion, they were at best junior partners, and that the Common Market was to be a union under French hegemony.

RECONSIDERATION

These political shocks have led to reconsideration of the economic consequences of the Common Market. From a dispatch by Edwin L. Dale, Jr. in The New York Times, we learn that “Doubts about the economic impact and benefits of the Common Market are being expressed both inside and outside the community.”

Economic analysts in several countries, it seems, have been putting together figures designed to show that the Common Market has had very little, if anything, to do with the general economic performance of the six member countries. Among their conclusions are the following:

1—“Economic growth of the member countries—France, West Germany, Italy, Belgium, the Netherlands, and Luxembourg—has actually been slower since the Common Market began than before. It is not argued that the Common Market has held back growth, only that it has not affected growth much either way since coming into being on Jan. 1, 1958.”

2—“The rate of investment in new plant and equipment also appears to have been unaffected.”

3—“Trade among the member countries has grown rapidly, but no more rapidly than before the Common Market began to dismantle tariff barriers. Recently this trade has been growing more slowly.”

TREATING ALL ALIKE

We need not take these new statistical studies as necessarily proving anything either way. There are always such a multitude of economic forces and factors at work that a net statistical change cannot safely be ascribed to any one of them. But it is time to ask whether the Common Market, looked at economically, was really such a good idea in the first place. Is it in fact a move toward greater freedom of world trade, or is it a move toward great protectionist blocs? It has tended to split Europe into two camps rather than unite it. If Britain were admitted, it would be at the cost of breaking up the “common market” long established as the British Commonwealth.

The Free Trade Area, which our government discouraged, was actually far more promising as a step toward freer world trade than the Common Market. For the “Outer Seven” agreed to lower tariffs vis-à-vis each other without necessarily imposing a high uniform tariff wall against non-members, as the Common Market requires.

But there is a policy far better than either of these, to which no serious attention is paid in the present world. It is the policy of each nation, without joining blocs or calling endless world conferences, simply reducing its own tariffs to benefit its own consumers, and not discriminating against any nation but treating all alike. It is the policy most likely to bring freer world trade and greater prosperity, and the only policy compatible with world peace.