Effect Of Breakdown In Trade Talks

Press, Volume XCVII, Issue 28747, 19 November 1958, Page 17

Effect Of Breakdown In Trade Talks

Special C'orre.spo’idcnt N Z P.A >

LONDON. N .vember 17. The rejection by the French Government of the British proposals for a European free trade area covering 17 nations in the Organisation for European Economic Co-operation, although not perhaps unexpected, has. according to diplomatic sources, rather placed the British Government "on the spot" because of its suddenness. The policy to be adopted :n the light of the new situation has yet to bo determined. It appears now that if anything i> to be saved of the proposal to associate Britain with the six common market countries, discussions will have to start quickly between representatives of the British-French governments at a high level. This is the roa>on. it is said. , for the Prime Minister's 'Mr Macmillan's» letter to General de Gaulle emphasising the importance of finding an agreement on the Free Trade zone and the Common Market dispute. The French Cabinet will consider the position tomorrow, and it remains to be seen if they will be willing to make some gesture in the next few days to save

Europe from what !a>ndon comamental irs suggest could develop into the commercial, political, and military >pl.t with implications <»n the North .Atlantic Treaty Organisat i»»n. and other international organisations. Franco, it is said, instead of supporting tho free trade plan, soems determined t.» back the s.x nation c <mir.. n market whicn starts up next year. Tne French altitude could have serious repercussions if General de Gaulle is disinclined to re .-pond to Mr Macmillan's latest approach complete?y. a market of at least 1t10.000.000 people. representing the populations of six countne forming the commmon market, could be closed to British goods. British firms would have to face compel.lion from mass production lactones set up to serve the common market. And to curry a natural sequence of events still further, the six countries would naturally desire to erect their own tariff barriers to protect themselves from outside competition, as well as progressively reducing their internal tariffs until all were abolished. This would mean there would be on Britain's doorstep a powerful block of nations developing trade among themselves, and shutting Britain out. Countries outside the block would have to retaliate in selfdefence. and Europe could be split into two trading groups. This is a situation the British Government will do all in its power to avoid.