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In 1962 the European enthusiasts in Brussels were explaining regretfully that although British membership would slow down the process of European integration-perhaps severely impede the whole movement toward a United States of Europe-it was a price that had to be paid for widening the geographical spread of the Community. No doubt these people, while regretting the manner of General de Gaulle's rupture of negotiations with Britain, are now privately relieved that the price will not have to be paid. Their view is that Britain's inherent weakness is such that she will be compelled sooner or later to come back and knock on the door again and plead for entry into the European Economic Community (E.E.C.). On the whole, better later than sooner. The European Community will by then have consolidated itself; it will be able to impose its terms with less difficulty and, in fairness it should be added, will be less niggling about making small concessions which may contravene the letter, though not the spirit, of the Treaty of Rome.
All told, then, in the view of this school the British negotiation was premature. It was forced on the Community by British diplomatic pressure and carried forward almost within sight of a successful conclusion as a result of British diplomatic skill. Only a major coup in the contemporary rough diplomatic style of the French could have stopped it. That it was the French has some incidental advantages. Having been so rough with their own partners and caused them much loss of face, the next moves from France, it is argued, must surely be placatory. And one sure-fire way in which de Gaulle could placate the offended Europeans would be to offer to speed up the process of European integration. The end product in that case could therefore be an offer of more supranational powers to the European Commission in Brussels. Thus, in spite of Voltaire and the recurrent and variegated manifestations of the astringent French spirit, all may still be for the best in the best of all possible worlds.
The argument rests on two major assumptions: first, continuing British weakness and sense of isolation; second, steadily growing cohesion and strength in the European Economic Community. As to the first, it is quite true that the ground swell in favor of joining the Common Market, which affected a wide segment of British public opinion, was partly prompted by the sense of national disillusion. There was the discovery that the special relationship with the United States was not after all very special; that the position of leadership in the new Commonwealth was more a matter of ritual than of substance; and, above all, that the traditional methods of managing British economic affairs seemed to be grossly and irretrievably inefficient by comparison with the group of West European nations which habitually set themselves ambitious economic tasks and then fulfilled them. However, it would be wrong to suppose that Britain was simply waiting for membership in the E.E.C. to tackle the various problems that had contributed to this sense of failure. On the contrary, since 1961 there have been a number of important initiatives in different fields of British domestic policy designed to prepare the ground for a series of fresh starts. Outstanding among these are the creation of the new economic planning organization, the National Economic Development Council, which has now produced an elaborate five-year program of accelerated growth; a drastic scheme for the reorganization of rail transport on a nation-wide basis; and moves toward an overhaul of the whole system of agricultural support.
The truth is that joining E.E.C. would have provided the occasion for putting over these and other radical changes of policy, with the help of an appropriate supporting political fanfare. But the act of joining would itself have solved nothing. At best it would have served to make the compulsion to act quickly exceedingly obvious. The failure to get into Europe could now, if skillfully exploited, be used to make it only a little less obvious. The significant point which may be overlooked is that British policy has evolved in the course of the 15 months of negotiation in Brussels-and earlier in the course of reaching the decision to negotiate-to the point where the country and the Government are ready to accept decisions which would have been barely conceivable not so long ago. Just take one example: having contemplated the complete elimination of tariff protection for a number of extremely tender British industries, other measures which involve awkward competitive pressures no longer terrify. One immediate practical consequence is that the tariff reductions on goods coming from EFTA countries[i] are to be speeded up, and probably eliminated altogether by 1966. Having traversed a lot of fresh and interesting ground in the approach to the E.E.C., the Government plainly has no intention of going backward.
Perhaps the most striking thing in London immediately after the breakdown in Brussels in February was the absence of any sensation of rebound. The Government gave no encouragement whatsoever to the people who were calling for a sharp turn toward the Commonwealth; nor did it countenance any recriminations with the Common Market. One or two small gestures of displeasure toward France were all that the Government permitted itself- little enough in view of the fact that the major plank of its present policies and future election program had suddenly and brusquely been knocked away by the French President. It is known that the British Cabinet did briefly consider the possibility of démarches and ritual fuss on a large scale, and the idea of bringing in the United States to put pressure on the European Community. Certainly the United States was willing to help. But the view which finally prevailed in London was that nothing should be done which might prompt the Six to draw demonstratively together against anything that looked like an Anglo-American initiative. Throughout, British policy has remained ostentatiously European, not only in direction but also in method.
Looking ahead, the series of British economic measures which started last autumn and reached their climax in the budget tax reliefs in April suggest that the Government is set on a policy of economic expansion. Assuming that the Government means what it says when it promises not to be panicked this time into acts of restriction by a sudden balance-of-payments crisis, it is by no means clear that, say, by the end of 1964, the British economy will look either unprosperous or feeble. There is no mystery about the causes of the economic stagnation and high unemployment of last winter. They were the result of deliberate policies-perhaps a better description would be self- inflicted wounds-chosen in 1961-62. These policies have now been sharply reversed.
Britain will of course suffer certain economic disadvantages through exclusion from the Common Market. But there are offsetting gains which are not inconsiderable. British exporters are in an exceptionally favored position in two groups of markets, EFTA and the Commonwealth, which together take more than twice the amount of the British trade that goes to the European Common Market. Moreover, in these sheltered markets (responsible for nearly 45 percent of her export earnings) Britain has no serious industrial competitor such as there would have been inside E.E.C. Admittedly neither of these trading blocs is as dynamic as the European Community, but it is worth noting that at least in one of them, EFTA, Britain will benefit in the period ahead from the increasing discrimination against the goods of competitors like the Germans. That should allow Britain to capture an increasing proportion of the business done in EFTA markets and offset the prospective loss of business in E.E.C.
The future of British policy toward Europe will of course be influenced largely by what happens inside the European Community itself. The evidence so far, on the basis of the short period since the breakdown of negotiations in Brussels, suggests two things. First, the Six are not going to remain stubbornly split; there is enough consensus to allow decisions to be carried out in a number of fields of economic and social policy. But secondly, there is no sign that France is prepared, as the European optimists hoped, to pay some sort of penalty for its intransigence toward Britain by making special concessions to the European Community. Nor is there evidence so far of any abatement of General de Gaulle's hostility toward the aggrandizement of the European Commission, which is the heart and the essence of the E.E.C. He has previously dealt summarily with the supranational pretensions of one Frenchman in Brussels, Etienne Hirsch, by having him dismissed from his post as President of EURATOM. Another, Robert Marjolin, who is a vice president of the European Commission, is an open opponent of the Gaullist régime. It should always be remembered that the top officials of the Community are appointed for a four-year term only, that their jobs are in the gift of national governments, and that they will in the end be no more European and supranational in spirit than each of their governments encourages them to be.
All this is relevant to the prospect of achieving more cohesion among the Six during the period ahead. The Six are now facing a series of difficult decisions on major issues which will be solved only if governments are prepared to take risks involving their political future at home. It is unlikely that they will do this unless they are given a clear guarantee of reciprocity which they can show to their own electorates. The most obvious example at the moment is the set of decisions which have to be reached on the E.E.C.'s common agricultural policies. For the first time in the Community's history, governments-notably the German Government-are asked to accept the prospect of a serious sacrifice of electoral advantage; that would surely be the consequence if several million peasant voters were told that they must henceforth expect a large reduction in the guaranteed prices for their produce. This is a different kind of test from anything to which ruling parties have been subjected in the past. The mood of the participants, and above all the presence or absence of the mutual trust which comes as a result of the assurance of reciprocity, is in such circumstances all-important.
Dr. Gerhard Schroder, the German Foreign Minister, has in effect demanded that France demonstrate its good intentions. At the beginning of April he told the Council of Ministers that in Germany's view the Community's effort had been excessively concentrated on agricultural policy, which France regards as the sine qua non of further progress by the Community, and that there must now be mutual concessions in other equally important spheres of policy. It is possible that France will eventually give the sign that is asked of her. But there are other issues waiting to be tackled outside the field of agriculture, where agreement will be just as hard to come by. For instance, the complicated and ambitious proposals for oil and coal-where the interests of the Six are widely divergent-await action. More profound is the issue of economic planning for the Community as a whole; the German opposition to any such exercise, whether on a national or a European basis, has been raised in a sharp form by the European Commission's Program of Action for the Second Stage.
Indeed it can be argued that the impression of increasing cohesion which the Community has given in the recent past owes a great deal to Britain. There is no doubt that the British negotiation with E.E.C. was a potent instrument for compelling agreement among the Six on difficult issues like agriculture. Some of the concessions to French views made by France's partners were certainly intended by them as a contribution toward the concurrent bargaining with Britain. At that stage the negotiation with Edward Heath supplied a kind of linchpin for the Six. The British negotiators had a more difficult time in consequence, for once the Six had agreed among themselves they became extremely rigid. It is, however, questionable whether the Six will be able to build much, in the immediate future, upon the agreements provisionally reached among themselves in the course of the negotiations with Britain. In this respect Britain almost certainly got the better of the bargain: the negotiations pushed Britain into making a number of decisions on policies which are unlikely to be reversed, whereas no comparable residue has been left behind for the Six.
There is of course the possibility that some fresh external pressure will fulfill the same function for the Common Market that Britain performed in 1961-62. At one stage it was thought that the Kennedy Round under the Trade Expansion Act might indeed fulfill a dual purpose: on the one hand, force a coherent external policy on the European Community; on the other, help Britain, by bringing European tariffs down, to repair some of the damage caused by her exclusion from the Common Market. But subsequent feelings both in London and in Brussels are that the Trade Expansion Act will probably prove to be a far less powerful instrument for international negotiation than the Americans originally thought. In spite of the eagerness of Walter Hallstein and the European Commission to take advantage of the opportunity now offered, the E.E.C. countries led by France are likely to demand from the United States firm commitments which the Administration will find it hard to give.
It is a mistake to imagine that the demands which are likely to be made on the American negotiators in the Kennedy Round are exclusively a French design to make life more difficult for another branch of the Anglo-American family. France is to a large extent acting as the spokesman for doubts which are widespread in the Common Market. The essential point which the whole incident underlines is that it has by now become exceedingly difficult to treat tariff negotiations as a thing on their own-in the traditional style-without bringing all sorts of other matters, often of a domestic character, into the argument. At the very least that is likely to impose a limit on the mutual concessions that will be made in the Kennedy Round. If, however, the French decide to press their point to extremes in order to keep the common external tariff of the E.E.C. inviolate, it might be more serious than that. This has led to suggestions in Brussels that an effort should be made to strike a bargain between the French and the other members of the Community, tying an agreement on the E.E.C.'s agricultural policy to the tariff negotiations with the Americans. In its simplest and most optimistic form, the idea is that the French should be offered an attractive deal on agriculture on condition that they agree to bring forward the date of the Third Stage of the Common Market, which is not due for another two and a half years. The significance of the Third Stage is that decisions on tariff changes will then be made by the Council of Ministers on the basis of a qualified majority (instead of unanimously as now), which means that France could no longer impose a veto on a big bargain in the Kennedy Round.
Once again, the characteristic feature of this scheme is the hope that France can be brought to accept a deal with a European price tag attached to it. Needless to say, this type of proposal is regarded with no enthusiasm in London. Indeed, the British fear has been that the United States Government might become so obsessed with the desire to make a splash with the Kennedy Round that it might induce the friendly E.E.C. countries to make unfortunate concessions on vital issues to the French point of view. The alternative, as it is seen from London, is for the E.E.C. members to stand pat until the Third Stage of the Rome Treaty, and if necessary delay any serious tariff negotiations with the United States until the Community can make its decisions by qualified majority voting. That will happen at the end of 1965, and no action by France can now stop it. It would be foolish to bargain away anything of importance in order to gain a short extra period of lower tariffs.
The standpat argument can of course be applied more broadly, taking into account the various other fields of European policy in which the unanimity rule will give way to qualified majority voting in the not very distant future. Indeed, tactically it has certain attractions for the extreme European integrationists, as well as for the British. It could be used as a means of bringing home to the French that there are a number of acts of further integration in Europe which will take place anyhow. France can no longer impose a veto on the progressive limitation of national sovereignty in these particular fields; the right to do so was surrendered when the Six passed from the First to the Second Stage of the Rome Treaty in January 1962. This fact, if firmly pressed home with a policy of no-blackmail-by- France, might then persuade the French Government that its wisest course, after all, would be to accelerate the process of integration and thus recapture the good will of its partners in the E.E.C.
But if the tactical pressure failed to produce the desired result, would the European leaders in Brussels be prepared to face a period during the next two and a half years in which the momentum of integration in all major spheres, other than tariff reductions, was drastically slowed down? That seems most improbable. After all, the central doctrine of the Treaty of Rome is that tariffs cannot be isolated as a separate compartment of national policy; making a customs union in modern conditions necessarily involves a wide range of other decisions taken in common. But an even more potent consideration would be the psychological effect on European business of a period during which the machinery of integration was retarded. It is a familiar point that the success of the European Community to date owes a great deal to the fact that businessmen have anticipated the realities of the Common Market in their own business decisions. They powerfully assisted European integration, because they were convinced that integration would occur. And they were convinced in large part by the practical evidence of the "Community spirit" among the governments which consented to the stream of decisions emerging from Brussels. Now, it is not being suggested that they would promptly reverse their positions if the stream were turned into a thin trickle. But they would surely be inclined, over a period, to hedge their bets more and more on European integration; and one simple way of hedging is to delay.
All this is another way of saying that integration is a highly cumulative business. The maintenance of visible tempo is the first essential. It follows that for all the initial tough talk of some of the Brussels leaders, like Dr. Sicco Mansholt, a vice president of the European Commission, they are likely in the end to be ready to make very extensive concessions to the French viewpoint in order to maintain the appearance of momentum. However, the more important question-since integration is only given shape in Brussels, but has to be willed elsewhere-is whether the national governments will be prepared to follow suit. I have already mentioned reasons for doubting whether they will. One of the key issues in this connection is the treatment that will be accorded to the permanent British delegation at Brussels; and this brings the argument back again to the future of British policy. It now looks as if the British Government, having considered and rejected a variety of possible devices to fill the post-Brussels gap, has plumped for a reinforced diplomatic mission to the Six which by its presence will constantly assert Britain's special relationship with the Community. While this may seem a flat and disappointing conclusion to the whole affair, the arrangement could have more important consequences than appear at first sight.
The Six have, after all, stated it to be their policy to ensure that the E.E.C. and Britain shall consult closely on matters which might impede any future attempt to negotiate British entry into the Community. Secondly, it has been suggested that Britain herself should try to ensure, so far as possible, that EFTA and E.E.C. move in step with one another on major decisions of policy. Plainly, Britain and the Scandinavian countries at least are going to try to use EFTA as a means of providing some compensating trade advantages for the increased discrimination that will be exercised against them by the E.E.C. With the further EFTA tariff cut scheduled for July 1963, the total reduction will amount to 60 percent, which is large enough to make German exporters to Scandinavia feel the draft. There are, therefore, good commercial reasons, quite apart from political considerations, why the German Government should be anxious to establish a formal arrangement which will keep EFTA and E.E.C. in regular and intimate contact.
It is not clear at this stage how far Britain is planning to go in reinforcing EFTA and using it as an instrument of international trade policy. There has been talk about a possible attempt to "harmonize" the external tariffs of the EFTA countries, at present widely different from one another; such a move would clearly help the group to operate from a position of much greater strength in any world-wide tariff negotiation. But any serious attempt to convert EFTA into a more closely integrated group, with common institutions analogous to those of E.E.C., comes up against the objection in London that the interests of the members are, in fact, too disparate to fit easily into a single harmonious system. No doubt something more will now be made of EFTA than its British founders, at any rate, originally intended. But it is unlikely to set itself up as a rival community to E.E.C.
Potentially, the most important consequence of keeping a powerful British mission in Brussels is that it could provide the means of consolidating the relationship established between Britain and five members of the Six during 15 months of negotiation. Whether it will in fact produce this result depends partly on how seriously Britain takes the whole enterprise and partly on the energy which the Community countries are prepared to apply to the business of consultation. There is no doubt that the Benelux representatives and the Germans are in earnest about it at this stage. If the British coöperate by producing a mission of the right type, the practice of close consultation on the details of E.E.C. policies as they develop could quickly become rooted. For practical purposes it would be a continuation in another form of the dialogue which developed between the British delegation and the E.E.C. representatives during the later stages of the negotiations in 1962. Moreover, it would be more difficult for France to sabotage the process of consultation than an actual negotiation, and there would be no question of a veto.
It is possible to conceive of day-to-day consultation of this type becoming so intimate and close as to be barely distinguishable from the making of joint decisions. A formal hearing in the meetings of the Council of Ministers would be unnecessary-just as the United States Ambassador, in the heyday of the Anglo-American special relationship, required no access to British Cabinet meetings in order to ensure that the American Government's needs and wishes were a potent factor in shaping relevant decisions. However, the content of the relationship envisaged with E.E.C. will be very different from the Anglo-American one, since it will specifically involve the domestic policies of both sides-something which the British and the Americans have always been at such pains to avoid. If, for example, the E.E.C. wants to go ahead with a common energy policy, the relevant questions on which agreement will need to be reached will include the size of the British subsidy, if any, to be paid to unproductive coal mines; the home price of coal charged by the National Coal Board; the amount of the excise duty levied on oil; the countries from which oil is to be imported and perhaps the quantity of stocks to be kept in storage. Just as the whole Common Market technique has involved systematic mutual interference in the domestic affairs of member countries, a successful attempt to keep a non- member marching in step with the Community must involve the same kind of interference-from both sides.
One consequence of this form of consultation would be to complicate and delay still further the already difficult process of reaching agreement on major policy decisions in E.E.C.-a tendency which the European Commission, guardian of the tempo of the Common Market, can be expected to oppose. Quite reasonably, the Commission would point out that the E.E.C. was having the worst of all worlds-by allowing an outsider an influential voice in decisions for which he bears no ultimate responsibility. If the system is to work, the central idea of the E.E.C., which is the unremitting search for a fresh consensus in a constantly wider range of policies, must willy- nilly include the outsider. The real problem is that almost any decision which welds the existing members closer together, e.g. over agriculture, is likely to carry E.E.C. and EFTA further apart. To keep the two blocs moving in parallel with one another, as they have done so far in their timetables of tariff reductions, will not prevent them from excluding each other's trade. The temptation therefore will be to delay such decisions.
All this assumes firstly that powerful consultative machinery between Britain and E.E.C. is established, and secondly that the Six are unable to agree among themselves on an ambitious new program of accelerated European integration. If they were, in fact, able to agree-more specifically, if France were willing to accept a major sacrifice of national sovereignty-the group would almost certainly refuse to allow the imperatives of European union to be trammelled by any commitment to an outsider like Britain. Consultation would have to wait. If France turns out not to be ready to pay the price, then the prospect is that in, say, two years from now Britain will not be faced with a tight and ever more coherent Community, but with an entity which is still fundamentally as loosely knit as the E.E.C. is today-and whose looseness is much more apparent. The process of formal integration, which puts a compulsion on national governments to subordinate their own decisions on important matters to a collective will, is much less advanced than is often imagined. Britain's adhesion to the E.E.C. in 1963, with the obvious sacrifices of national and Commonwealth interests which this would have entailed, would have powerfully reinforced the mood making for more rapid European integration. There is no comparable compelling force now in sight. A loose Europe would of course be a club which Britain would find it easier to join-though from the point of view of a British European it would be far less worth joining.
[i] The countries of the European Free Trade Area are Austria, Denmark, Norway, Portugal, Sweden, Switzerland and the United Kingdom.