Will January 1, 1958, become as important a date in international history as July 4 and July 14 are to United States and French historians? This could well be, for on this day the Common Market, officially known as the Treaty Establishing the European Economic Community, came into force. One hundred sixty-one million people have decided by democratic processes to relegate to history the economic rivalries which have kept them apart for centuries and to form an economic and political unit which is capable of operating as an equal in this age of super-powers.
Perhaps the most significant feature of the Common Market, and Euratom—its sister treaty which is intended to pool the nuclear power generating resources of France, West Germany, Italy, and the Benelux countries—is that each of these powers will surrender a part of its sovereignty. This is the one thing they have never willingly given up before.
There is now in being a powerful force, hopefully started two years ago, composed of European political and labor leaders, headed by the sagacious Monsieur Jean Monnet, working behind the scenes to promote European unity. This force is called the Action Committee for the United States of Europe.
From the days of the Roman Conquests to the present, there have been unifying and divisive forces at work in Europe; the former tending to knit various portions into larger, more powerful political and economic units, the latter tending to break existing governmental structures down into smaller, more homogeneous units, at least from the viewpoints of the divisive forces. The means for the accomplishment of the former were usually military. Religion, conquest and national (or personal) aggrandizement, high birth rate, lack of food, need for markets, transportation needs, strategic seaports, necessity to maintain balance of power and other worthy or unworthy factors motivated the unifiers. That the unifiers of Europe have been more or less successful from time to time is evidenced by the achievements of the Romans, Charlemagne, Napoleon, and Hitler, but because of various factors, including the manner in which unification came about, each of these attempts ultimately failed.
Since World War II there have been a succession of events indicating that powerful forces are at play in a favorable climate which probably will result in a formal confederation of most European states not behind the Iron Curtain—and possibly even of several of the Communist satellite states, if disarmament ever emerges from the talking stage.
Unifying Factors
There are several compelling forces pushing non-Communist Europe toward economic and political unity.
The new industrial revolution sweeping the world is transforming the economic life of both free Europe and the Communist countries. Automobiles, refrigerators, television, electrical home appliances, better housing, more and better roads, vastly improved air and rail transportation facilities are visible evidence of Europe’s economic improvement. Any improvement in communications tends to shrink distance. Superior articles manufactured in one country, and desired by the citizens of another, promote trade. Lower tariffs make for a more abundant life. Hence, the swelling pressures exerted by the multitudes of Europe to share today in the fruits of the new industrial revolution, the greatest exponent of which is the United States. The period of relative economic stagnation which Europe suffered from 1914 to 1946 is being succeeded by an industrial renaissance in which production and marketing methods are being modernized. From 1951 to 1955, the Organization for European Economic Cooperation reports that Europe grew faster economically (percentagewise) than the United States. It is expected that it will continue to do so. This growth, based on mass production methods, increased markets, and a terrific pent-up demand can be greatly enhanced by a single market having no trade barriers such as would result from economic unity.
The shift in the centroids of power has been away from London, Paris, and Berlin to Washington and Moscow. It is bitter indeed for the proudest, oldest, most literate and culturally advanced nations, and until recently, the most formidable militarily and economically, to watch while the United States and the U.S.S.R. engage in their “not-so-cold” struggle for supremacy.
The loss of its colonies in Africa, Asia, and the Middle East is a factor tending toward European unity. Whereas formerly certain European countries were assured of cheap sources of required raw materials and a captive market for much of their manufactured goods, now these countries must compete for these things with the rest of the world—and without the benefit of the extremely favorable positions once enjoyed. Competition against the industrial giants of America and Asia will be more successful if done collectively. In addition, a more competent job of exploiting the raw materials still available and developing ersatz or substitute materials can be done by a larger, more potent, economic entity.
During the period in which the United States has been dispensing economic and military aid to Europe, it has been recognized as fundamental (and so stated by General Marshall) that joint economic and political institutions were required in order to maximize American aid. We could not afford to aid countries which dissipated this aid in warring militarily or economically on one another. Russian aggression in Eastern Europe assisted us. European unity took a step forward with the formation of the Organization for European Economic Cooperation and the European Payments Union. From these organizations have stemmed others of greater political significance which in turn are spawning still others of wider membership.
Significant Events Leading to European Confederation
Alarmed by the Communist coup in Czechoslovakia, the premiers and foreign ministers of Belgium, the Netherlands, and Luxembourg agreed at a conference in Brussels to accept an Anglo-French proposal for a union of Western European nations. A five-nation, 50-year security pact was signed March 17, 1948.
General Marshall in 1947 proposed that Western Europe establish joint economic institutions in order that Marshall Plan aid achieve maximum effectiveness. In 1948, the Organization for European Economic Cooperation was established. Member states were Austria, Belgium, Denmark, France, German Federal Republic, Greece, Iceland, Irish Republic, Italy, Luxembourg, Netherlands, Norway, Portugal, Sweden, Switzerland, Turkey, and the United Kingdom. Canada and the United States were classed as “Associated Countries” while Spain and Yugoslavia were “Observers,” although Spain was a full member for agriculture. Member states of the OEEC also established the European Payments Union at the same time to facilitate exchange of currencies required to make payments for international purchases by member states.
United States, Canada, and ten Western European nations adopted on March 18, 1949, a North Atlantic Defense pact agreeing that “an armed attack against one or more of them in Europe and North America shall be considered an attack against all.” It was signed April 4. The original Western European members, France, Belgium, Netherlands, Luxembourg, Denmark, Norway, Italy, Portugal, Iceland, and Great Britain, were joined by Greece and Turkey in September, 1951, and by the Federal Republic of Germany (West Germany) in May, 1955.
On May 5, 1949, the Council of Europe was formed by Austria, Belgium, Denmark, France, German Federal Republic, Greece, Iceland, Irish Republic, Italy, Luxembourg, Netherlands, Norway, Sweden, Turkey, and the United Kingdom.
Robert Schuman, French Foreign Minister, on May 9, 1950, proposed pooling European steel and coal. The British Labor Government rejected the plan, but six nations, France, West Germany, Italy, Belgium, Netherlands, and Luxembourg agreed to a conference. They agreed to a treaty March 19, 1951, which was ratified June 16, 1952.
A treaty founding the European Defense Community was signed in Paris, May 27, 1952, by France, West Germany, Italy, Belgium, the Netherlands, and Luxembourg. Reciprocal aid pacts were signed between NATO and EDC. However, France rejected EDC on August 30, 1954, effectively killing it.
The High Authority of the European Coal and Steel Community set up a single market for coal on February 10, 1953, and for steel on May 1 of the same year. The six member nations agreed to scrap tariffs and import quotas within the Community. A charter for limited European political confederation was drafted on March 10, 1953. Permanent consultation with the United Kingdom was established in 1954 and with Switzerland in 1956.
The London Conference attended by seven Western European nations, Canada, and the United States, ended October 3, 1954, with the agreement based on the 1948 Brussels Treaty to integrate West Germany with Western Europe. The new organization was named the Western European Union, October 11 of the same year, at Paris.
An agreement signed in Paris, October 23, 1954, provided for West German sovereignty, rearmament, and entry into NATO and WEU, Saar agreement provided for an internationalized zone but gave France economic and political privileges until final peace treaty.
Under a France-West Germany agreement, June 5, 1956, political integration of the Saar with the Federal Republic was planned for January 1, 1957.
In Rome, on March 25, 1957, the members of the European Coal and Steel Community signed two significant treaties. The European Economic Community, or Common Market, is intended in twelve to fifteen years to allow the free flow of trade, capital, and labor among its members. To insure this it was agreed to set up certain political institutions in common. Euratom, a pool of nuclear energy, is designed to give the European Community one of the world’s great atomic complexes, and reduce its dependence on oil. These treaties became effective January 1, 1958.
Present and Proposed Economic Unions
Today it is generally conceded that Western Europe is closer to economic unity than ever before. The free or coerced (at first) association of European states into the various military, political, economic, or purely consultative organizations already described has established a favorable climate for stronger and more widespread ties. Leadership is coming from the six nations that form the European Coal and Steel Community, the Common Market, and Euratom. However, other member states of the OEEC, EPU, and Council of Europe view the prospect of economic cooperation and free trade no less enthusiastically, if a bit more cautiously, for various reasons.
Under OEEC sponsorship plans have already been drawn to surround the Common Market with a so-called “Free Trade Area.” At the start it will be limited to industrial goods only. The expected member states, Austria, Denmark, Norway, Sweden, Switzerland, and the United Kingdom, would lower or eliminate trade barriers between themselves and the Common Market states. Later, efforts would be made to solicit the membership of the other non-Communist states of Europe—Finland, Greece, Iceland, Irish Republic, Portugal, Spain, and Turkey (all of which, except Finland, are members of OEEC and EPU).
Table 1 Economic Community Monthly Output Statistics | |||||||||
Country | Area in MSqMi | Population in Millions | Hard Coal | Crude Steel | Cement | Electricity Million KWH | Remarks | ||
In Thousands of Metric Tons | |||||||||
BELGIUM | 12 | 8.9 | 2,400 | 485 | 410 | 1,020 | Essentially manufacturing country; some agriculture. Coal abundant; some iron ore, zinc, copper, lead. Exports 40% of production. | ||
FRANCE | 213 | 43.3 | 4,700 | 1,160 | 1,130 | 4,300 | Well balanced economy. Huge coal, iron & bauxite deposits. Susceptible to much further development. | ||
GERMAN FEDERAL REPUBLIC | 95 | 50.0 | 11,000 | 2,120 | 1,820 | 7,260 | Highly industrialized. Huge coal deposits. Exports manufactured goods; imports food and raw materials. | ||
ITALY | 117 | 48.0 | 90 | 595 | 1,140 | 3,680 | Well balanced economy. Agriculture needs irrigation and mechanization. Poor in minerals; rich in hydro and thermal power. | ||
LUXEM- BOURG | 1 | 0.3 |
| 290 |
| 100 | Essentially agricultural but huge iron and steel producer for its size. | ||
NETHER- LANDS | 13 | 10.8 | 950 | 105 | 115 | 960 | Well balanced economy. Land being reclaimed from sea. Exporter of manufactured goods. Requires raw materials. Large maritime interests. | ||
SAAR | 1 | 1.0 | 1,350 | 295 | 25 | 230 | Highly developed industrially. Large mining industry. | ||
TOTAL | 452 | 162.3 | 20,490 | 5,050 | 4,640 | 17,550 |
| ||
U.S.A. | 3,022 | 168.1 | 39,900 | 8,280 | 4,510 | 60,000 |
| ||
U.S.S.R. | 7,878 | 210.0 | 35,800 | 4,200 | 2,075 | 20,000 |
| ||
I Provisions of Rome Treaty Establishing Economic Community
- There will be a customs union for industrial goods. After a three-stage adjustment period during the next twelve to fifteen years, there will be free movement of trade with no tariffs or quotas for members but a common tariff and economic policy toward outsiders.
- There will be a common policy in agriculture with a common market for agricultural products.
- Persons, services, and capital will move freely between member states. Restrictions on the movement of services and capital would be abolished progressively while by the end of the adjustment period it is expected workers could move freely.
- A common transport policy will be adopted for rail, road, and inland waterway. Differential rates, now based on country of origin and destination, will be removed in ten years. Carriers will be allowed to interchange facilities, and frontier fees will be reduced progressively.
- The principle of fair business competition is to be pursued.
- Social and labor laws of member states will be brought into accord.
- National economic policies will be harmonized so as to prevent balance of payment crises. It has been agreed that a European Social Fund and European Investment Bank will be established, the latter to have an initial capital of $1,000,000,000.
- Under the Eurafrica scheme, the Community will be associated with the overseas territories of the member states. The aim is to increase trade and investment in Africa. A five year $580,000,000 development fund is to be set up by the member states.
- A political framework has been agreed upon. Responsibility for carrying out the preceding provisions will rest with a group of political bodies. The question of where the Common Market, Euratom and the Coal and Steel Community will be located has not yet been settled.
- There will be an assembly of 142 delegates from the parliaments of the six countries, representation to be largely based upon population. The hope is that these delegates will be elected, ultimately, by universal suffrage. This assembly will serve the Coal and Steel Community and Euratom as well.
- A council of ministers will be established, one from each government. At first, decisions must be based on unanimous votes. Later, a weighted majority will suffice.
- An independent commission of nine members will be nominated by common agreement to act as the Community’s general staff. Acting by majority vote, it will have power to initiate and decide certain types of actions—not unimportant.
- There will be established several consultative committees. Two of the most important will be the Economic and Social Committee and the Monetary Committee.
- A court of justice will be set up. It will rule on applications and interpretations of the Rome Treaty and will perform similar functions for Euratom and the Coal and Steel Community.
Table 2 Free Trade Area—Monthly Output Statistics | |||||||
Country | Area in MSqMi | Population in Millions | Hard Coal | Crude Steel | Cement | Electricity Million KWH | Remarks |
In Thousands of Metric Tons | |||||||
AUSTRIA | 32 | 7.0 | 11 | 215 | 202 | 770 | Industrial economy. Rich in iron ore, timber, hydro-electric power resources. |
DENMARK | 17 | 4.4 |
| 24 | 102 | 303 | Well balanced economy. Food and machinery exporter. |
NORWAY | 125 | 3.5 | 33 | 29 | 80 | 1,948 | Maritime country. Fishing, forest, water-power, minerals. |
SWEDEN | 173 | 7.3 | 24 | 200 | 208 | 2,260 | Well balanced economy. Much iron ore, forests, water-power. |
SWITZER- LAND | 16 | 5.0 |
|
|
| 1,274 | Well balanced economy. Much hydro-electric power. |
UNITED KINGDOM | 94 | 51.2 | 16,300 | 1,760 | 1,015 | 6,900 | Highly industrialized. Exporter of manufactured goods. Huge deposits of coal and minerals. |
TOTAL | 457 | 78.4 | 16,368 | 2,228 | 1,607 | 13,455 |
|
The political institutions described will not be supranational, as a practical matter. The assembly can only debate questions and advise member states—not legislate. The council must reach all its decisions unanimously, for at least the first four years. Later on, decisions can be reached by a weighted majority. However, as time goes on, it is expected that assembly delegates will be elected by universal suffrage and that some of Europe’s most Prominent and ambitious politicians will seek office in the six-nation assembly. When this happens, this body will become more powerful, perhaps supranational.
II. Free Trade Area
The Free Trade Area is an outgrowth of the Economic Community idea which was sponsored by the British who subsequently refused to join. British grounds for not joining are manifold, but arise chiefly from their Commonwealth commitments. Their reasons add up to the fact that the advantages to be gained by membership in the Economic Community (at that time and the present) would be more than offset by the disadvantages which might accrue from the political tie-up. However, the idea of free trade with a rapidly expanding market appealed to the British so much that they have exerted intense pressure on the OEEC to consider and boost a new scheme. This would attach a Free Trade Area consisting of the United Kingdom, Denmark, Norway, Sweden, Switzerland, and Austria to the Economic Community. Members of the Free Trade Area and the Economic Community would disestablish trade barriers on industrial goods in trading with one another, but would maintain their own restrictions (tariffs and quotas) in trading with the rest of the world. Agricultural products would be excluded in deference to British and Commonwealth agriculture.
As a result of British pressure, OEEC has been studying ways and means of solving the problems involved in linking the Economic Community with the Free Trade Area. During the spring of 1957, the British tried unsuccessfully to push the six members of the Economic Community into preliminary negotiations for a convention which would consider officially the basic proposition. The French were the most vigorous objectors, insisting that this matter could not be considered until each member of the Economic Community had ratified the Rome Treaty. It is known, however, that the French distrust the British and are most unenthusiastic about economic ties with them. However, most of the other members of the Economic Community are willing to reach an accord with the British. Thus, it appears most likely that once the Rome Treaty is ratified, a convention will be held to set up a Free Trade Area and link it economically and politically to the Economic Community. The problems of devising a workable plan and then getting it ratified by the member states will be at least as difficult as those encountered during the Rome Convention.
III. Potential Free Trade Area
While it is generally expected that the linking of the United Kingdom, Denmark, Norway, Sweden, Switzerland, and Austria to West Germany, France, Italy, and Benelux will proceed gradually but inexorably, it is another matter with regard to inclusion of Spain, Portugal, Ireland, Iceland, Greece, Turkey, and Finland. These countries are predominantly agricultural and much less developed economically than the members of the Economic Community and the proposed Free Trade Area. Some of these nations would probably require certain concessions (such as France has obtained from the other members of the Economic Community). These would probably be granted in order to gain access to the raw materials susceptible to greater exploitation by modern methods in Spain, Turkey, Finland, and the other states of the Potential Free Trade Area. Foreign investment capital would be much encouraged if these states were tied to the more advanced Economic Community and Free Trade Area states economically and politically.
Table 3 Potential Free Trade Area—Monthly Output Statistics | |||||||
Country | Area in MSqMi | Population in Millions | Hard Coal | Crude Steel | Cement | Electricity Million KWH | Remarks |
In Thousands of Metric Tons | |||||||
FINLAND | 130 | 4.2 |
| 16 | 92 | 650 | Agricultural economy. Lumber, paper, pulp exporter. |
GREECE | 51 | 8.1 |
|
| 120 |
| Agricultural economy. Industry needs power and development. |
ICELAND | 40 | 0.15 |
|
|
|
| Exports fish. |
IRELAND | 27 | 2.9 | 20 |
| 52 | 135 | Agricultural economy. Needs new industries. |
PORTUGAL | 35 | 8.8 | 35 |
| 85 | 180 | Agricultural economy. Much mineral wealth. |
SPAIN | 196 | 29.0 | 1,070 | 104 | 390 | 1,170 | Excellent potential. Agriculture requires irrigation and mechanization. |
TURKEY | 296 | 24.1 | 310 | 16 | 81 | 128 | Agricultural economy. Large undeveloped resources of coal, iron, oil, copper, chrome, manganese, asbestos and other minerals. |
TOTAL | 775 | 77.3 | 1,435 | 136 | 820 | 2,263 |
|
Effect of Economic Union
A careful analysis of Table #1 discloses several interesting facts. First, the Economic Community, which is itself a fact, has a population approximately equal to that of the United States and somewhat smaller than that of the U.S.S.R. Secondly, the area is only one-sixth that of the United States and less than one-seventeenth that of Russia. However, this land is practically all productive. That not devoted to industrial or urban use is devoted to agriculture or forestry. Only a small percentage is mountainous and nonproductive. The climate is temperate with sufficient sun, rain, and snow for effective agriculture. Thirdly, its production of coal, steel, cement and electricity are comparable, in general, to Russia’s production of these basic commodities; although (except for cement) only from 30% to 60% that of the United States.
These, however, are figures based upon a mere addition of the production figures for each of the six countries. The purpose of the Common Market or Economic Community is, essentially, to increase the productivity of each of the member nations and the standard of living of their inhabitants. We know that the surprisingly happy experience with the European Coal and Steel Community has created a climate of optimism and eagerness for industrial expansion within its six member nations. Vigorous plans are being pursued for expansion of steel-making and finishing facilities in the Economic Community (as well as United Kingdom, Spain, Sweden, and Austria). It is expected that by 1960 production will be increased one-third from the 1956 level. Steel-making expansion will create additional demands on the coal-mining industry, a demand which probably cannot be met within the Common Market. Hence, imports will be required from the Western Hemisphere and from countries in the Free Trade Area and the Potential Free Trade Area. The latter, at present, have no surplus of this commodity, but Spain and Turkey have much greater potential than is recognized. Exploitation along modern lines could provide all the coal required for steel-making from within Free Europe.
Table 4 Summary—Yearly Economic Statistics | |||||
Economic Unit | Countries | Population | Per Capita Consumption | Gross National Product | Remarks |
ECONOMIC COMMUNITY | Benelux France West Germany Italy | 162,300,000 | $ 525 | $134 Billion | OEEC Data |
FREE TRADE AREA | Austria Britain Denmark Norway Sweden Switzerland | 78,400,000 | $ 720 | $ 86 Billion | OEEC Data |
POTENTIAL FREE TRADE AREA | Finland Greece Iceland Ireland Portugal Spain Turkey | 77,300,000 | $ 250 | $ 24 Billion | OEEC Data Augmented. |
TOTAL WESTERN EUROPE—TODAY | 318,000,000 | $ 528 | $244 Billion | Based upon OEEC Data | |
TOTAL WESTERN EUROPE—1960 | 328,000,000 | $ 571 | $286 Billion | Based upon OEEC Data | |
TOTAL WESTERN EUROPE—1970 | — | $1,100 | $400 Billion | Estimates by Business Week June 29, 1957 | |
UNITED STATES—TODAY | 168,000,000 | $1,660 | $439 Billion |
|
Much of the additional steel-making capacity will go to the blossoming auto industries. West Germany, the United Kingdom, France, and Italy have rapidly expanding and highly competitive auto producers. Auto production within each of the first three countries is approximately at the one-million-cars-per-year mark. Italy is expected to reach this mark soon. By 1960, auto production within Free Europe may reach and surpass the 5,000,000-per-year rate. Refrigerators, television sets, electrical appliances, home production, hotels, road construction, service industries—all can be expected to multiply as barriers between member states come down.
A reference to Table #2 shows that the total population of the Free Trade Area is about half of the Economic Community. The total area of the six countries of the Free Trade Area is approximately the same as for the Economic Community; however, much of Norway, Sweden, Switzerland, and Austria is very mountainous and useful only for hydro-electric power and as sources of minerals. Economic union of the six countries proposed for the Free Trade Area would be meaningless unless this is carried a step further and economic ties to the Economic Community, also, are effected. The geographic relationship of these twelve countries is intimate; the communications systems between them, good, but susceptible of much improvement; the economies, complementary (even if highly industrialized generally). A removal of trade barriers in a setting of mild political union is bound to lead to further exploitation of natural resources and increased productive facilities.
By including the 77 million people of the Potential Free Trade Area (see Table #3) in an economic union with the twelve nations of the Common Market and Free Trade Area, a still better balance would be struck.
The countries of the Potential Free Trade Area are essentially agricultural but most are possessed of abundant raw materials and mineral resources, and greatly increased agricultural output would inevitably result from such a proposed union. This Colossus of 318,000,000 people has a combined gross national product of $244,000,000,000 (as compared to $439,000,000,000 for the U.S.A.) It is conservatively estimated that by 1960, amid an economic and political climate as suggested, this could rise to at least $286,000,000, 000 with per capita consumption going from a present $528 to $571. By 1970, combined gross national product and per capita consumption should reach at least $400,000,000,000 and $1,100, respectively, based upon present dollar purchasing values and rates of exchange. (See Table #4.)
Buttressed by the overseas territories which may be salvaged from emergent nationalism (spurred on by Communism), by Euratom, by an excellent rail network, by an improving road network and by an incomparable, yet improving, system of inland waterways—it is conceivable that this area might again become the dominant economic and political force in the world.
Effect on the U. S. A.
At this time, it would appear that U. S. products exported to Europe will probably face stiffer tariffs, as long as a competitive product is made within the Economic Community and associated groups. While member nations will benefit from gradually reduced tariffs and elimination of quotas, outside nations will continue to face these trade barriers. Some members of the Economic Community who now have lower tariffs than the rest will have to raise the charges on goods entering from outside the group. Thus an American company exporting to France, Italy, or Belgium will be burdened with a handicap in attempting to meet the competition of West German competitors. As production increases within the member states, unit costs and prices will fall making it still more difficult for U. S. products to compete. In the long run, applying accepted capitalist theory, increased production should so improve the economic status of Free Europe that it will be able to afford American products now beyond the reach of the average European.
However, if U. S. companies exporting to Europe will suffer, at least at first, U. S. companies with branch producing facilities in Europe, or those which will establish such facilities, are expected to share in the general economic improvement of Europe which will follow economic union. Direct investment by Americans in Europe is expected to multiply. While the total of American investments in Europe had reached approximately $3,000,000,000 in 1955, it is expected to reach $9,000,000,000 by 1980 (from a J. Walter Thompson Company estimate in Business Week).
While U. S. airlines operating in Europe fear the effect on their business of economic union, U. S. oil companies are in an enviable position. Since World War II, they have established themselves dominantly on the European Continent. Refining is done in each nation, although the crude must be imported. Since only a small percentage of Europe’s oil needs is found within Free Europe, no impediments to continued importation of crude is envisaged.
Aside from the direct economic effect that economic union within Free Europe has on us, however, are the indirect effects—and these are far more important. By co-operating with one another, the member states will improve their economic lot and become stronger productively and more reconciled to further cooperation. Political union on a trial basis can lead to a strong confederation if economic union proves profitable. A United States of Europe would be a tremendous moral, economic, and political force. Since its entire concept is the very quintessence of democracy, the load carried by the United States as standard-bearer for the democracies could be shared with—not only old friends—but strong friends.
Obstacles to Economic and Political Union
There are many real problems and tests which the Economic Community will have to face and overcome before it can be considered successful and advance to political union. The same problems, to a greater or lesser degree, face the countries of the Free Trade Area and Potential Free Trade Area.
National political crises, such as recur frequently in France and Italy (particularly the former), can kill the Economic Community or prevent further expansion of the basic idea, particularly if occasioned by one of the members or proposed members. It must be remembered that the largest single political party in France and Italy is the Communist Party. It has been kept out of national power only by coalitions of non-Communist parties which frequently forget about the common enemy to “have at it” with one another. The U.S.S.R. does not look with favor upon the appearance on the international scene of another democratic Colossus.
Many centuries of European history, national traditions, dislikes and distrusts, and language diversity tend to dilute the enthusiastic arguments of proponents of economic union. Yet history also shows periods of French and German alliances, British and French, German and British, Italian and French, etc. Bi-lingualism (and multi-lingualism) is common throughout Europe, particularly near the borders. It can be propagated with relative ease if sanctioned by the member governments. The obstacles listed herein are not considered of real importance.
Of a much more tangible nature are the economic barriers. That which is good for the Economic Community (or other union) as a whole is usually found to be not good (at least immediately) for one or more member states. Vested economic interests if affected adversely are expected to fight with tenacity and effect. Bargaining and compromise will be resorted to in Europe as they have been (and are today) in the United States. A good example of this is the attempt of Britain to exclude agriculture from the customs union to be extended member nations of the Economic Community and the Free Trade Area. This (to protect the agricultural markets within the United Kingdom and Commonwealth produce) will be vigorously contested by France, Holland, and Denmark. Britain will have to compromise in order to launch this proposed economic union.
There are other factors which now or later will arise to plague the proponents of economic and political union. This writer expects them to be surmounted in Europe as they have been in the United States of America. Why, if we have seen flags appear representing such diverse organizations as the United Nations and North Atlantic Treaty Organization, should we doubt that one will appear some day emblematic of a United States of Europe?
A graduate of Drexel Institute of Technology, Captain Kravath was commissioned in the Civil Engineer Corps, U. S. Naval Reserve in 1941. During World War II he served with the SeaBees in Alaska. He transferred to the regular Navy in 1946 and served as Public Works Officer at NAS, Coco Solo, and at NAMC, Philadelphia. From 1951-55 he was Director, Research Div., Bureau of Yards and Docks, Washington, D. C. Subsequently he went to Paris with the Logistics Div., Construction Branch, U. S. European Command. Captain Kravath is at present Deputy District Public Works Officer, 12ND, San Bruno, California. He is the author of numerous technical and professional articles. This is his first article in the Proceedings.
Note: Photographs for this article have been supplied by the courtesy of the countries concerned.
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