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IN recent months the British Government and people have been reexamining their position with respect to the European Economic Community--"the Six"--more deeply and fundamentally than ever before. Although views differ about the terms on which an arrangement with the Six should be sought, there is overwhelming agreement in the government, in industry, in the trade unions and in the press that, despite the failure of past efforts, an arrangement must be found and at not too distant a date. Certain agricultural groups and the Daily Express have always opposed, and continue to oppose, free trade with the Continent; but with very few exceptions, the British public is today much more fully convinced of the need for far-reaching arrangements with the Six, and is much more vocal, than it ever was during the prolonged but abortive negotiations in the Maudling Committee.
In these negotiations, which collapsed nearly two years ago, the United States played little part, but until comparatively recently we have generally encouraged the United Kingdom to become more closely linked with the continental countries, economically as well as politically and militarily. This was the consistent theme of American policy during the Marshall Plan period. Indeed, at times the United States appeared to the British Government to be unnecessarily zealous in urging the United Kingdom to join the continental countries in far-reaching economic arrangements. Somewhat ironically, our suggestion--when the O.E.E.C. was first being discussed--that the United Kingdom should join the continental countries in forming a customs union was considered by the British to be particularly inopportune and fanciful. Now the roles are reversed. In Europe today, most people identify the United States with those groups (the French Government, the Commission of the European Economic Community and some, although not all, of the convinced "Europeans") that are opposed to the formation of a free trade area or customs union embracing both the Six and the Free Trade Association of "the Seven."[i]
Since the signing last November of the Convention for a Free Trade Association by the Outer Seven, there have been many pressures within the Six as well as in the other European countries for negotiations between the Six and the Seven, and the support that the United States has given to those who have opposed reopening negotiations has been important, perhaps decisive. Our "unneutral" attitude and our intervention at several critical points during the last year in support of the alternative course of action advocated by the Commission of the Community has, not unnaturally, created resentment in the United Kingdom, in the other countries of the Seven, and even in some quarters within the European Community.
The course of action advocated by the Commission and favored by the United States has been one which, in effect, denied the need for arrangements between the Community and the other European countries that were different, in kind, from those established by the Community with the United States or any other close ally. The Commission did suggest that a "contact committee" should be established to examine and to seek to mitigate particular difficulties that might arise in trade between the Six and the Seven; but it was emphatic that this committee should be limited in scope and should not be used as a back-door approach to a new negotiation.[ii] The Commission argued forcibly and persuasively that the right course now was not to continue the search for a Europe-wide arrangement but to press for the adoption of liberal and constructive economic policies on the part of the Community, a general lowering of trade barriers by the industrialized countries--including a substantial reduction in the common tariff of the Six--and better coordination of economic policies on the part of the major countries of the free world--in particular, the Six, the United Kingdom and the United States. The Commission's advocacy of liberal and constructive commercial and economic policies was, of course, warmly welcomed by the United States. And, for a number of reasons, the Administration was ready to share and support the Commission's view that, given liberal, outward-looking policies on the part of the Community, a wider European free-trade arrangement was unwise as well as unnecessary.
In the first place, the Administration shared the judgment of the Commission, M. Monnet and others that while Dr. Adenauer --a convinced "European"--remained Chancellor and while the economic situation was favorable, over-riding priority should be given to the consolidation of the Community and to pushing the integration of the Six countries to the point where it could not be unravelled by political change or economic adversity. It also shared the view of the Commission that negotiations on a broader arrangement--whatever their outcome--would impede this process of consolidation. If the negotiations were successful there was the danger that the Community would not be able to preserve its identity within the larger framework and that it would be replaced by a looser, broader and less ambitious arrangement.
There were good reasons for this fear. Until the integration of the Six countries was further advanced, the identity of the Community depended, to a large extent, on the very differences in tariff treatment between the Six and the other European countries which a broader free-trade arrangement would eliminate. Industry in the Six countries was planning investments and making other arrangements on the assumption that the Common Market --but no inclusive European arrangement--would become a reality. And one of the strongest cards in the hands of the "Europeans" in their efforts to accelerate the establishment of the Common Market was the fact that industrial arrangements were tending to anticipate rather than to lag behind the reduction in barriers to intra-Community trade. There was also substance to the view that negotiations on a Europe-wide arrangement, whether or not they proved successful, would mean a delay in the development of the Community--and at a critical time--simply because the key people in the Commission and in the governments of the Six countries would not be able to concentrate on pushing ahead with the implementation of the Treaty of Rome, but would instead be caught up in protracted and probably acrimonious bargaining.
The fact that the French Government was strongly against a renewal of negotiations (for rather different reasons) was also, of course, an important reason for the Commission's view. Soon after coming to power, the De Gaulle government had indicated that it regarded the Treaty of Rome as a binding international agreement. But it had shown little enthusiasm for doing more than carrying out the letter of the Treaty commitments. Many of the provisions provided only the bare bones of policy; the flesh remained to be put on by decisions taken by the Six governments on the basis of recommendations formulated by the Commission. French coöperation in the further development of the Community was uncertain at best, but it was essential; and an important condition of French support appeared to be opposition to a wider area of free trade.
Concern at the deterioration in the U.S. balance-of-payments position, and the danger that any new discrimination against American exports might intensify that problem (and might lead to new domestic protectionist pressure) were also strong reasons for our official coolness to a Europe-wide free-trade arrangement. The Common Market of the Six and the Free Trade Area of the Seven both involved discrimination against American exports, but a coming together of the two groups would have meant somewhat more discrimination since our European competitors, and in particular Britain and Germany, would then have had a better position than our own exporters, not only within the European group to which each now belongs, but in the other group as well.
The Administration's concern at the prospect of a coming together of the two groups also undoubtedly owed something to a deep-seated dislike of economic "regionalism." In the immediate postwar period the European countries had no effective choice between "globalism" and "regionalism;" had the United States insisted on a non-discriminatory system of quota liberalization the result would have been a continuation of strictly balanced bilateral trade arrangements and a disastrously low level of trade. Once the major European countries had become prosperous, and particularly since the convertibility moves at the end of 1958, the case for "regional" rather than "global" action had become less obvious. The Six, by endorsing the ultimate objective of economic and political unity, could be considered an embryonic state and, in these terms, the Community was acceptable even to those who tended to oppose "regionalism." But the Seven and, to an even greater extent, a wider arrangement lacking the goal of eventual union encountered the traditional opposition to regional action on matters within the competence of global organizations like the International Monetary Fund and the GATT.
The policy pursued by the United States during the last year can be counted a success in terms of its immediate objectives of giving the Community time to consolidate and of encouraging the adoption of liberal trading policies. In May the Council of Ministers of the Community took important decisions to speed up the establishment of the Common Market. Although these decisions called for somewhat less rapid action than the Commission had proposed, the effect of them will be that at the end of the first four years of the transitional period the tariffs on trade within the Community will have been cut by at least 40 percent (and perhaps by 50 percent) rather than by the 30 percent required by the Treaty. And the first move toward establishing the common external tariff will be taken by the end of this year, rather than a year later as provided by the Treaty. As evidence of willingness to adopt liberal external policies, the Six tentatively reduced by 20 percent the common tariff toward which they are moving; the cut will become permanent if other countries make adequate concessions in the forthcoming GATT negotiations. Moreover, the Six have indicated that they are prepared for further reciprocal reductions in the future. This willingness to negotiate for lower tariffs has not been limited to the Six: the United Kingdom, in particular, has also made clear that it will be ready to negotiate substantial cuts in its own relatively high tariffs during the forth-coming GATT negotiations.
Although the Community has taken an important step forward, and although the principal European countries appear ready to make significant tariff reductions (for suitable reciprocal concessions), the last six months have also revealed weaknesses and limitations in our policy. In the first place, by becoming so closely identified with the views of the most ardent "Europeans" we have sacrificed any claim to impartiality in the European dispute. In the second place, we have added to the already pervasive disenchantment with certain aspects of our foreign policy by pressing as an alternative to a European settlement a course of action which we ourselves do not appear ready to make effective. It is possible that had the United States been ready to undertake a massive reduction in its own tariff and to give real powers to the successor organization to the O.E.E.C.--the proposed O.E.C.D. (Organization for Economic Coöperation and Development)--the other European countries would have felt it possible to work out their problem of relationship with the Six without recourse to special European arrangements. But although we have argued that the right course of action is to lower trade barriers globally and to coöperate closely on a broader than European basis, the terms of our existing trade-agreements legislation clearly rule out the possibility of the kind of reduction in the U.S. tariff that would be required to make global reductions an alternative to European free trade. And, largely because of our own reluctance to undertake any very far-reaching commitments in that context, the scope and powers proposed for the O.E.C.D. are so limited that it promises to be a somewhat weaker organization than its predecessor--the O.E.E.C. Finally, our unwillingness to admit the need for a European settlement, not necessarily now but at some not too distant date, may well weaken our ability to influence the timing and the terms of such a settlement.
Neither the French Government nor the Commission nor the United States could delay the opening of new negotiations if the United Kingdom were to indicate that it was ready to negotiate on terms for joining the Community. All Six governments and the Commission have repeatedly stated that their Community is "open" and that they would welcome participation by the United Kingdom in particular. Today, for the first time, many responsible people in Britain are seriously advocating taking the plunge and joining the Six in all their Communities.[iii] The possibility of doing this has become a real issue for two different kinds of reasons: first, because the vast majority of those who have an important influence on policy genuinely want closer relationships with the Six (economically and politically) and believe that it is important for the British Government to give far greater priority to its European relationship than it has heretofore done; and second, because the attitude of the French Government and the Commission, and the support given to this position by Dr. Adenauer and the U.S. Government, have appeared to foreclose the United Kingdom's arriving at this objective by any means short of joining the Community.
It may well be desirable for the British to join the Community, but the decision is one that should be reached because it is found to be the right answer to the problem of their relationship with the Community and not because it is the only way to get the United States out of the room and to force the Six to negotiate. The crucial element in any eventual European settlement is the relationship to be established between Britain and the Community; the other European countries (and in particular the rest of the Seven) cannot be ignored, but it will be easier to find appropriate arrangements for them once the right central relationship has been found. An effective and harmonious relationship between Britain and the Community is of fundamental importance to the well-being of the West and it is a question that ought to be discussed in all its implications by the principal members of the NATO alliance. If we accept the need for an arrangement between the Six and the other European countries that is different in kind and goes deeper than the relationship between the Six and the United States, and if we show a willingness to help bring such an arrangement about, we can exert a powerful influence on the timing and the way that the relationship is to be established. If we continue to deny the need for a European settlement we are unlikely to prevent one, but we may well find ourselves in a position to have little say about the terms on which it is made.
Over the past few years many positions on both sides of the Channel and on both sides of the Atlantic have been adopted for essentially short-term, tactical reasons. Positions that were valid at a particular time and in particular circumstances tend to persist when conditions have changed, and short-term tactics tend to harden into long-term policies. The British Government is now examining various assumptions which in the past have appeared to impose limits on the kind of commitments to the Continent that it could assume. It is perhaps time for our Government also to examine afresh the relevance of some of its assumptions.
In the past the "Europeans" have argued that the Community could not be fitted into a broader European framework without fatally weakening the Community; that, in the modern world, trade could not be freed except on conditions approximating those in the Treaty of Rome; and that some day the United Kingdom would "face facts" and join the Treaty of Rome. They have also described the ultimate objectives of the Community in terms of an economic union and some form of political federation and they have argued that an essential feature of their approach was the delegation of power to "supra-national" institutions. The United States has supported these concepts and these goals.
However, during the last year and a half the Community has not been developing as "supra-nationally" as some of its founders had hoped and the balance of power has been tipping away from the independent Commission to the Council of Ministers of the member governments, and, in particular, toward the French and German Governments. The Commission has more power and is far more important than the secretariat of an intergovernmental organization and it has played an indispensable part in the formulation of policy and in the implementation of decisions; but, thus far at least, it has acted as a goad on governments, as an honest broker among governments, and as the intellectual driving force of the Community, not as a "pre-federal" government. The customs-union features of the Treaty are being implemented without much difficulty, but much less is being done in those areas of the Treaty where the differences in concept and approach between the United Kingdom (and the rest of the Seven) and the "Europeans" today appear to be the most important. For the "Europeans," free trade within the area is only one aspect of what they are seeking to achieve; the real objective is to reach the point where all economic questions are considered not as national but as Community problems and solutions are sought not by reconciling conflicting national interests but by reference to the good of the Community. For the "Europeans" a Community policy is thus an objective to be sought as desirable in itself. The test of whether common policies are needed to make a customs union work--the test the British would be apt to apply--is largely irrelevant: a customs union is one aspect of common policy, not the reason why some kinds of common policy become necessary.
Although there are various aspects of the Treaty of Rome that it would be difficult for the British to accept (the agricultural provisions probably being the hardest) the biggest difficulty for Britain has never been the letter of the commitments of the Treaty, but the unwritten premises--what The Observer has called the parts written in invisible ink: that is, the acceptance of economic union and some form of political federation as the goal, and the delegation of appreciable powers to "supra-national" institutions as the method. The British could accept much more easily the method that is in practice being followed today by the Community and the concepts of the ultimate objective that appear to be held by General de Gaulle. For there is little to suggest that the present French Government shares the aspirations and the unwritten premises of the "Europeans." President de Gaulle has frequently stated that he accepts the Treaty of Rome as a binding commitment which France will honor and he has recently spoken in warm tones of the economic advantages of the Community. But he has never endorsed "supra-nationalism" and he has explicitly rejected any path towards unity that involves a loss of national identity. If the British should eventually decide to join the Community they probably would do so because they believe in and could accept what today appears to be the official French view of the Community.
If the United Kingdom and presumably some of the rest of the Seven were eventually to join the Community, it is unlikely that there would be an appreciable watering down in the amount of "supra-nationalism" that exists today. Earlier fears that the process of integration might be stopped short even of the formation of a customs union are no longer valid. It is probably a safe guess that if the United Kingdom were to join the Six, British industry would be among those urging a more rapid dismantling of barriers to trade within the group. And the British Government would probably be one of the strongest proponents of liberal and outward-looking policies for the complex as a whole. On the other hand, the result of adding the United Kingdom (and presumably some of the others of the Seven) would almost certainly be to shift the balance within the Community and to strengthen the position of those who favor a more pragmatic, more evolutionary process of integration with fewer overtones of federalism than the "Europeans" and the United States have hitherto favored.
There is a chance that the Six, if left to themselves, might find their way to some new federal system, particularly if they were encouraged to do so by the United Kingdom as well as the United States. Despite their diversity, they are all probably closer to each other in their habits of thought, and in a multitude of other ways, than they are to the British and the Scandinavians. Throughout the postwar period the French have alternated between being the leaders and the laggards in the movement toward unity. It is difficult to know where they stand today and even more difficult to know where they may stand tomorrow. Each time General de Gaulle has referred to the Community he has done so in warmer terms than he had used before, and it is not impossible that his views will gradually become closer to those of the "Europeans." If the Six want to achieve a form of economic and political unity that goes well beyond a customs union, it is difficult to avoid the conclusion that they would be more likely to do so if the Community were not expanded to include additional countries.
Looking ahead, it seems probable that if opinion in the United Kingdom continues to develop at the pace and in the direction it has recently been going, a choice will have to be made in the next few years between two broad types of European settlement: on the one hand, the addition of the United Kingdom, and perhaps most of the rest of the Seven, to the Community, or, on the other hand, the negotiation of a European economic arrangement (presumably a customs union) into which the Six would fit as a unit. British accession to the Treaty of Rome, if that were the course chosen, could not be a simple signing on the dotted line, for the Treaty is a highly negotiated instrument and almost every article reflects concessions to one or another of the member countries. The addition of the United Kingdom would upset this balance. Moreover, the British have special needs of their own for which provision must be made. The Six can reasonably require acceptance of the basic principles of the Treaty as a condition of membership; they cannot reasonably refuse to negotiate special arrangements for the United Kingdom, comparable to those they have already embodied in the Treaty for themselves.
It is not clear today which kind of European settlement would better serve the purposes of the West. It seems probable that either one would accomplish objectives that the United States has sought to promote by its support for the integration of Europe: the creation of a strong, dynamic and expanding economy, political stability, and the forging of strong links between Germany and her partners in the West. The choice may depend on whether the governments and peoples of the Six are ready for a deeper form of unity than is implicit in a customs union.
Until now the United Kingdom and the Six have not been negotiating with one another in an attempt to find their way to an agreed objective, but against one another to rather different ends. Tactical manœuvring has too often taken the place of genuine negotiation. For a number of reasons it is probably still too soon to begin real negotiations on a long-term European settlement. In the first place, an eventual European settlement will be less disruptive of trade with the United States and other third countries if European tariffs can first be lowered by negotiation in the GATT. How much can be done in this direction will, of course, depend in large measure on our own willingness to make important tariff reductions. In the second place, suspicion and distrust of British motives are still too strong on the continent and particularly in France. In the third place, the fears of those who today see in a negotiation (looking forward to either kind of settlement) a threat to the impetus toward unity will tend to diminish if the Six can become more cohesive and can define with greater clarity their own ultimate goals. Finally, the British themselves have not yet completed their own reassessment of their relationship to the continent.
Despite considerable pressure upon it to force an immediate negotiation by making a dramatic bid for membership in the Communities, the British Government has recently made plain that it is not contemplating precipitate action. Nevertheless, it is becoming increasingly clear that in the long run it will not accept the "global" alternative that has been advocated by the European Commission and supported by the United States. This is only partly because the prospects for substantial tariff reductions on a global basis and for far-reaching Atlantic coöperation do not look bright. A much more important reason for rejecting a "global" approach is the strong and growing desire on the part of the British Government and people for a political and economic relationship with the continent that would run far deeper than any that they have hitherto been prepared to contemplate.
[i] The members of the European Economic Community ("the Six") are Belgium, France, Italy, Luxembourg, The Netherlands and West Germany. The members of the European Free Trade Association ("the Seven") are the United Kingdom, Sweden, Norway, Denmark, Switzerland, Austria and Portugal. Throughout this article the expression "Europeans" (in quotation marks) is used to describe those people in the Community who are consciously seeking not only an economic union of the Six countries but some form of political federation as well.
[ii] The "contact committee," as such, was never established; but the Committee on Trade Problems of the Twenty-One (the O.E.E.C. countries plus the United States and Canada, and the Commission of the European Economic Community) which was formed during the spring has taken its place. The Committee on Trade Problems is concentrating on particular trade difficulties and has been discouraged by the United States (and others) from embarking on discussions of a long-term settlement.
[iii] The European Economic Community, Euratom, the European Coal and Steel Community.
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