Washington’s Missing China Strategy
To Counter Beijing, the Biden Administration Needs to Decide What It Wants
THE idea of a United Europe is not new. It has exercised the minds of the soldiers and sometimes of the statesmen of Europe for many centuries. That area of the world which is bounded roughly by the Atlantic Ocean, the Mediterranean, the North Sea and the Russians is not large in relation to the rest of the earth's surface; yet within it has originated much that has shaped the destiny of mankind. The culture of Athens and of Rome; the origins of democratic government; the systems of law which today permeate the greater part of the Western world--all spring in the main from this turbulent section of the world. Torn by war and conquest, weakened by internecine strife, Europeans have yet found the time and the capacity to leave an incomparable legacy of music, of painting, of prose, of poetry and of practical achievement. The surprising thing is not, perhaps, that they now seek some closer unity, but that the pressure for it has not been felt even more keenly hitherto.
Yet men do not live easily within the same institutional arrangements. National patriotisms are strong; to be a Frenchman or a German has meant, at least until very recent times, much more than to be a European. What, then, has brought about the impetus for closer unity that we now see upon the Continent of Europe? The reasons--and it is important to understand this --are not commercial or economic in their origin. Commerce and economics have, as I shall show later, their part to play, but in this instance it is subsidiary to the main theme.
Two successive generations of Europeans have seen the devastation of war. Only those who have either suffered the degradation of an imposed and foreign occupation or, on the other hand, witnessed the moral collapse which can follow a transitory military victory with its resultant growth of temporal power can perhaps understand to the full the demand for change in Europe. Those who have seen these things seek not unnaturally for a degree of unity which would, so far as human ingenuity can contrive, prevent their repetition in the future. Such men, though no less patriotic than their forebears, have seen that national frontiers and national rivalries can sometimes be maintained only at a brutal and increasing cost of human sacrifice.
It is noteworthy that three of the men who have played a large part in the European movement--Dr. Adenauer, M. Schuman and M. Spaak--though citizens of different countries and subject to different allegiances, were yet born within some 125 miles of one another. If recent experience has been an important factor in their minds, the existing situation must have urged them along the same road. This area is, after all, upon the frontiers of the free world. Beyond is Communism, operating powerfully, swiftly, centrally and upon interior lines. Small wonder that this part of the West at least should seek means of achieving a more common policy and greater facilities for common action.
Finally, and quite simply, the size of many of the national territories is too small to give full scope to the energies and abilities of their people. At a time when men's minds are stretching out to new frontiers in space, it would be remarkable if they were content to seek to settle alone and in isolation the domestic problems of what at least to American eyes would appear to be very small areas indeed.
Where do the British Isles come into this picture? First, it must be stated and understood that the English are Europeans. Sir Winston Churchill in the first volume of his brilliant history of the English-speaking peoples recounts our origins. The march of the Roman Legions up to Hadrian's Wall; the long years of the Roman Peace ("In Roman Britain men thought for many generations that they had answered the riddle of the Sphinx. They misconceived the meaning of her smile.");[i] the swift, searching raids of the Norsemen; the Norman Conquest. There is no race stemming from the main Continent of Europe that is not represented in these islands where they fought, conquered, settled, loved and died.
Separated, though less certainly than in years past, by 20 miles of sea, we remain inextricably related by ties of blood, culture and commerce with our friends upon the mainland. We have throughout our history taken part in their wars and shared in both their triumphs and disasters. At all times, and this is relevant today, we have watched to see that they should not unite for a purpose inimical to our interests. We are too closely part and parcel of the Continent of Europe to accept separation from it without strains being imposed over very wide fields of policy.
This, then, is the political background to the European scene. It was against this background that the so-called six "Messina Powers"--France, Germany, Italy, Belgium, Holland and Luxembourg--instituted arrangements culminating in the Treaty of Rome. The Treaty of Rome is set in an economic context. It is designed to establish among the six a European Economic Community. The objective of the Community is to promote economic development by the establishment of a Common Market and by the progressive coördination of the economic policies of the members. Customs duties are to be eliminated in three main stages over a period of from 12 to 15 years. A common external tariff is to be established. Quantitative restrictions are to be progressively eliminated. The Treaty of Rome is not a detailed policy so much as the establishment of principles and institutions within which common policy can be worked out and applied. These institutions consist of an Assembly composed of parliamentarians which will meet annually; a Council of Ministers which will seek to coördinate the economic policies of the member countries; and a Commission consisting of nine independent "experts" from member countries whose task will be to superintend the working and application of the Treaty. In addition, provision is made for a Court of Justice to which all members can bring grievances, and an Economic and Social Committee to advise and assist the Council and Commission.
It is relatively easy to criticize in detail these various arrangements. The men who devised them would be the last to claim perfection for them. They were the best that could be agreed upon among these six nations after long periods of anxious and difficult negotiations. They leave inevitably many questions unanswered. Suffice it here to pose the main questions which many inside the organization, and more outside it, are asking.
Assume that you do establish such an economic community; assume that you resolve the various internal difficulties of such an association; what kind of an economic policy will you pursue? Would such a community be narrowly self-centered, inward-looking and highly protectionist, or would it look outward to the larger world beyond, and seek to expand the flow of trade both ways between itself and others?
The answer to these questions is, of course, crucial to the attitude which the outer world may eventually adopt towards the Treaty of Rome or, for that matter, towards any larger Free Trade Area. Opinions differ sharply inside Europe on the proper answer. Some in Germany are powerful advocates of the outward-looking policy. This view is on the whole shared by Belgium, the Netherlands and Luxembourg with their traditional low-tariff policies. Some in France on the other hand, and not in France alone, see in the development of such an economic community an opportunity to pursue highly protectionist policies and to shelter themselves from competition from the outer world. Let it be clearly understood that the answer to this question is not yet determined.
It is at this point that an important and controversial aspect of the Treaty of Rome must be referred to--namely, the position of agriculture. Not surprisingly to those who have studied agricultural policy on either side of the Atlantic, the Treaty of Rome adopts a different proposal for agriculture from that put forward in the case of manufactured goods. Free trade is rejected and instead a common agricultural policy is to be worked out. Special methods, it is said, will have to be applied. These methods may include anything needed to implement the common policy, including--though not limited to--import and export controls, subsidies and minimum price agreements. The long-term objective of removing tariffs inside the area is kept, but a tariff is an insignificant barrier compared with what can be achieved by these other and more powerful instruments. Here again the main question--what kind of an agricultural policy will you pursue--remains unanswered, and it is not Europeans alone who are anxious as to what the eventual answer will turn out to be.
This brings us to the rest of Western Europe. As the situation stands today, Western Europe is divided into three. First, the six countries of the Common Market with their plans for free trade in manufactured goods and an organized market for their agriculture. Second, such other countries of Western Europe as could without grave risk to their economic stability move within a period of not more than 12 or 15 years to a system of free trade among themselves and including the Six. Thirdly, those other countries of Western Europe which for one reason or another will clearly not be in a position within such a period to accept free trade with its implication of increased competition on the home market. It is perhaps invidious to single out individual countries and place them in various categories, but Great Britain and the Scandinavian countries are examples of the second, and Greece--for reasons associated with her internal economy--can clearly claim to be within the third. All these countries are today members of the Organization for European Economic Coöperation. All of them would undoubtedly benefit from a united rather than a divided Europe. The problem which faces Europe today is how to reconcile the various positions. It is not a simple problem, yet much turns upon success in solving it.
Let us take, for example, Denmark. Her existence depends largely upon her agricultural exports and much of these are to the Six. Yet the Six plan an organized agricultural market among themselves. Should she seek to join this? Would it be the kind of market which, if she did join it, would serve her interests? Could she join the Six if the other partners in the Scandinavian Alliance remained out? What would happen to her agricultural trade with Britain, which is large, if she were associated with the Six and Britain were not? These are the kinds of questions which have been exercising the minds of Europeans. Great efforts are being made through the Organization for European Economic Coöperation; and for the past three months European Ministers have been wrestling with the problem under the able chairmanship of a British Minister, Mr. Reginald Maudling.
Let us then turn to examine the British approach to this matter. A solution to the relationship between Britain and the Six would not solve all the problems, but it could clearly be an essential factor in maintaining the larger aim of a united Europe. Failure to achieve it would, moreover, have repercussions outside the field of commerce or of economics.
Clearly in this matter Britain faces a dilemma: how to coöperate in a policy for free trade in Europe without damaging irretrievably the trading pattern in which so many countries are involved within the Commonwealth. It was for long thought that this dilemma was so difficult that no solution could be found. If Britain were to lower her tariffs against Europe, she would automatically remove the preferences she was extending to imports from Commonwealth countries. Over the years goods would be coming into Britain from Europe as well as from, say, Canada or Australia, free of all duty whatsoever. Let it be explained that the essential difficulty was not the refusal of the British to accept this measure of competition in their home market. Protectionist forces exist in Britain as elsewhere, but her industry is lively and aggressive, and her economic policy is based upon the plain fact that she must be competitive or she will count for nothing. It is one of the encouraging features of this phase of events that in answer to the question, "Will you over the years accept competition on equal terms with any Western European country?" the answer of British industry has not been negative. Indeed, many of our leading industrialists have been in the forefront in advocating the advantages to all of larger trading areas. If there be any Americans who criticize us for what may sometimes appear to be our old-fashioned approach to life or an unwillingness to adventure, they might perhaps ponder what answer American industry would give to such a free-trade challenge.
Our difficulty, then, is not a domestic one but is associated with our obligations to our partners in the Commonwealth. The solution which we have proposed turns upon two factors. First, the adoption of what is known as the free-trade-area approach, and secondly, the treatment of agriculture.
Essentially what we have said so far as manufactured goods are concerned is, "Yes, we will revise our tariffs against other countries in Europe at the same pace and in the same manner as they revise their tariffs against us." What we do require, however, is the privilege of keeping our freedom in respect to external tariffs which we impose today upon the world outside. The reason for this is simple and, indeed, laudable. We do not impose any tariff against most goods from the Commonwealth, and if we adopted the common external tariff of the Six, we should have to start by raising tariffs where no tariffs today exist.
The British position, of course, creates problems. It is necessary to ensure that we do not just import goods free of duty from the Commonwealth and then pass them on as our own to Europe. There is also the question of what advantage we may gain from importing raw materials free of duty (and therefore cheaper than the rest of Europe), and then selling finished products on the Continent. However, on this point many Europeans take the view that the sensible course would be for the Continental countries to lower their duties against raw materials rather than ask us to put ours up. Whatever the difficulties, however, we have lived with them enough to know that they are not insoluble.
The second factor is agriculture. The bulk of the imports from the Commonwealth is in the form of foodstuffs, and the suggestion that we were about to adopt free trade for agriculture would be as distressing to these Commonwealth exporters as it would be surprising for our own domestic producers. We share, therefore, the view of the Six that free trade for agriculture is not a practical proposition.
What, then, of the organized agricultural market of the Six? Clearly one cannot be too dogmatic until one sees for what purpose it is established. If its purpose is to exclude, say, North American--or for that matter Australian--wheat for the benefit of European producers, this would clearly raise issues of a most difficult and controversial character. Nevertheless, it would be wrong to go to the other extreme and say that no room existed for coöperation on agricultural problems between Britain and the Continent of Europe. We are, after all, the main market for agricultural produce from the Continent and our tariff levels are more liberal than those of most other European countries. Other things being equal, therefore, I doubt that the agriculture problem of itself would constitute an insuperable obstacle to a common trading policy for Europe. The real question is: Do enough Europeans want it? In particular, do the French want it?
The French economic difficulties are well known. They stem from a variety of causes, including the Algerian War. They are regarded by France's European friends with sympathy and understanding, but they are real, pressing and today effectively inhibit her from any genuine form of free trade with the Six or with anybody else. It is for this reason that the Treaty of Rome includes fairly wide escape clauses for the French. Any free-trade-area system as described above would have to take account of these same difficulties. Assuming, however, that all her European partners use all their best endeavors to meet the special French problem, where do France's real interests lie?
M. Gaillard has never approached these matters from a narrow view. France's short-term difficulties in associating herself with the wider concept of a Free Trade Area covering the rest of Western Europe are not to be minimized. The long-term rewards are also great, and are not limited to economics alone. I believe that ways can be found to resolve such difficulties as still persist and to open the way for the wider vision of the new Europe which lies ahead. But it must include all Western Europe. Those few nations which are not yet able to adopt the full measure of free trade, even though introduced gradually, must find a seat at the council table. What is important is that their position should not weaken the resolve of others to reach the aims which they have set themselves.
This, then, is the choice which now lies before Europe. Stripped of its inevitable complexities, it resolves itself into the alternative of one Western Europe or a divided Western Europe. If it is decided that Europe must be divided, it will certainly be divided in more ways than in trade alone. In an area whose trade is as closely interwoven as this, discrimination by one half against the other will surely lead to counter discrimination in one form or another. If, on the other hand, the decision is for unity, the prizes ahead are considerable. A trading area as rich as the United States and as large in population as the Soviet Union offers a new hope for the free world. Moreover, the rewards will not be purely economic. If men and ministers meet upon commercial and economic matters, they will of necessity meet on much else, too.
What should be the attitude of America to these adventures? So far it has been generous and understanding. I would suggest that it is a matter of first importance to the United States that Western Europe should be united and should be strong. Economic strength in this area provides both a bastion against the advance of alien theories and a growing and secure market for transatlantic trade.
At this moment the issue remains undecided. The coming year may well see it determined one way or the other. Great good or great evil could flow from the negotiations now being carried on. But of one thing there is no doubt. We are at a dramatic turning point in European history.
[i] "The Birth of Britain." New York: Dodd, Mead, 1956, p. 46.