Orchestrating Europe (Text Only). Keith Middlemas

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СКАЧАТЬ means whereby countries were not forced to adopt violent deflationary measures. Moreover, although in every case there was some backsliding in the commitment to hold back levels of import quotas, the fact that EPU and the OEEC’s ‘trade liberalization’ scheme (of which more below) were in existence, acted as a control over a more drastic and dislocating return to temporary protection.

      From a low point in June 1952, when the combined reserves of the OEEC states stood at $7.8 billion, the position steadily improved until mid–1955 when they reached $13.4 billion. Against this background, the conditions within the EPU gradually ‘hardened’. In place of a ratio 60:40 between credit and gold, in mid–1954 the coverage was changed to 50:50 and in 1955 only 25:75. By this stage much of the EPU’s work had been done and many countries had introduced de facto convertibility on current account transactions (though this step was not formally taken until December 1958). Meanwhile, the EPU’s main customer was France and, although the job could equally have been done by the IMF, the operation held France within the European institutional orbit at a time of political upheaval fuelled by colonial unrest, and when more ‘integrationist’ experiments were being discussed.

      The mirror of American concern on payments was its determination to remove quotas on intra-European trade. The obvious multilateral forum for dealing with the issue was the General Agreement on Tariffs and Trade (GATT) agreed in Havana in 1947. Yet GATT was fatally flawed. It was dependent for its existence on regular renewal by its members. Moreover, the rejection of the ITO had signalled that the US Congress was wary about agreeing to anything that might affect levels of protection for US industry. At a time when the major dysfunctional element in the world economy was seen to be the inability to pay for dollar imports through the sale of goods on the American market, it was inconceivable to envisage a reciprocal tariff negotiation that did not require for its success concessions by the United States. Although at Geneva, in 1947, GATT partners negotiated cuts of 19% in their registered tariffs on manufactured goods, at Annecy, only two years later, the meagre harvest was estimated at 2% while at Torquay, in 1950–51, it climbed marginally to reach 3%. In both these latter cases, a major factor was the reluctance of the USA to negotiate reciprocal tariff reductions. With success on tariffs beyond them, the members of GATT refrained, perhaps wisely, from tackling the enforcement of prohibitions on quotas, which were seen as even more harmful to trade than tariffs. It was for this reason that the USA accepted a regional solution to the removal of quantitative restrictions (QRs) or quotas on intra-European trade.¹¹

      At the end of 1949, the OEEC adopted the target for removing import quotas directed against each other, on 50% of their ‘private’ trade, by the end of the year. This target also applied separately to each of the three groups: food and food stuffs, raw materials and manufactured goods. Under prompting from ECA officials, who argued that something a little more spectacular was necessary to convince Congress to continue aid at the present high level, the target was raised first to 60% and subsequently to 75%. The ‘trade liberalization scheme’, as it became known, had several drawbacks that made the commitments, and the achievements, less than at first sight. Firstly, the operation referred to ‘private trade’ and exempted, therefore, imports on government account. This had been done so as not to interfere in ‘domestic’ political decisions but the effect was to remove from the operation of the scheme entire swathes of trade, mostly in agriculture but sometimes also in fuel, controlled by monopoly government purchasing agencies. Secondly this bias in the operation was compounded by the fact that the initial obligation to remove QRs evenly over broad product categories was dropped once the targets were further raised. An over-performance in raw materials, for example, could and usually did compensate for an under-achievement in agriculture. Furthermore, the Liberalization Code allowed a country with balance-of-payments difficulties unilaterally to reimpose restrictions if necessary, causing a rebound effect on its trading partners and undermining the EPU’s ‘discipline’ in the process. Finally, the whole operation excluded tariffs, which were considered the preserve of GATT, so that QR removal was often accompanied by the re-imposition of (partially) suspended tariffs. The initial agreement bore all the hall-marks of the compromises necessary to secure its passage through the OEEC Council.

      In October 1950, the OEEC Council agreed that by February 1951, members should remove QRs on 75% of imports from other members, but it was there that further progress stalled. The crisis atmosphere engendered by the payments problems in Germany, the UK and France meant that for them even the 75% target had to be temporarily shelved. Such circumstances obviously inhibited the pressure for further advances. Discussions were also constrained by increasing disenchantment by the ‘low tariff’ countries of the Benelux, Scandinavia and Switzerland towards the failure to tackle tariffs, and therefore to deal with all frontier barriers to trade. Finally, as QR removal advanced, it threatened to touch the hard core of protectionism in sectors deemed by governments to be politically, socially or strategically vital to the national interest.

      By the mid–1950s, reflecting their less strained balance of payments positions, most OEEC countries had satisfied their 75% targets. Many had also relaxed their quota regimes towards the dollar area, although not to the same extent. Yet when the decision was taken, in January 1955, to progress towards 90 per cent liberalization, the ‘low tariff’ countries made their agreement conditional upon action being taken by the Organisation to deal with high tariffs. Although they did not get their way, the target was nonetheless renewed and when, in December 1958, France finally attained it, private trading within western Europe had, to all intents and purposes, been purged of quantitative restrictions. There remained residual quota discrimination against the USA and, of course, state trading in agriculture was widespread. Nonetheless, for an experiment with such tentative beginnings, the achievement in reducing tariffs was remarkable.

      Hoffman’s call for ‘integration’ back in October 1949 acted as a catalyst for a pan-European programme of action on trade and payments. Yet, even at the time, there was an awareness that there existed another path to ‘integration’ and that it might even be preferable. Whereas Hoffman sought to increase Europe’s degree of multilateral cooperation in carefully defined but meaningful areas, secretary of state Dean Acheson preferred a strengthening of political mechanisms that would weaken the ability of national veto-rights to prevent desirable initiatives. In fairness, one should add that he preferred this path because he considered that it would be easier for European countries to comply than it would be for them to accept a more concrete programme. For both men, the ultimate goal was a ‘Europe’ that mirrored more closely the political model of the United States of America. The ‘new’ continent could still show the old how to throw off the last shackles of its ancien régime.

      The concept of ‘integration’ in political or institutional terms had also entered the mainstream of debate in western Europe. During the Second World War, Resistance movements had been forced, partly by the pan-European model espoused by the fascists and the Third Reich, to produce a cogent alternative that also transcended national frontiers. Their thinking was shaped by several factors that pointed the way towards international institutional reform. The failure of the Versailles Treaty and the League of Nations to prevent the reassertion of aggressive nationalism suggested that the foreign policies of nation states required stronger constraints. Similarly, the ‘beggar-thy-neighbour’ policies that characterized separate national responses towards the Great Depression suggested that there, too, some higher disciplinary force was necessary. These ideas had inspired the original surge of post-War institution-building, but for many observers the strengthening of inter-governmental organizations was not enough. They argued that national units were too small to guarantee security and prosperity in the modem world and too recalcitrant to guarantee freedom from assault. Solutions lay in the pooling of national sovereignties, thereby effectively proscribing the use of national means for economic or military aggression.

      After the War almost every country witnessed the creation of national ‘European’ movements, even though they often disagreed on both aims and tactics. Some dedicated themselves to the task of leading opinion, while others had more populist aspirations. Some saw progress as incremental, like a ripple effect from a core of commitment; others wanted a swift adoption of new political structures; some took a view СКАЧАТЬ