Western Economics NEW INITIATIVE SHOWN BY PARIS CONFERENCE

Press, Volume XCIX, Issue 29107, 20 January 1960, Page 14

Western Economics NEW INITIATIVE SHOWN BY PARIS CONFERENCE

IBy “LYNCEUS" of the “Economist") (From the “Economist” Intelligence Unit}

London, December 29.—There are serious doubts and reservations about the political and strategic achievements of the Western pre-summit conference in Paris. No ground whatever was gained in the matter of France's unwillingness to integrate its air or future nuclear forces into N.A.T.O. The “victories” proclaimed for each member —a series of summit meetings for Mr Macmillan, the venue of Paris for General de Gaulle, the hardening attitude on Berlin for Dr. Adenauer and the emotional climax of his world tour for President Eisenhower—are so flimsy as to suggest that no advance was made towards the real objectives of the conference. This should have been not only some kind of agreement for the agenda at the meeting with Mr Khrushchev, but the making ready of an agreed Western attitude on the major items of that agenda. Fortunately, there is still time between now and the summit conference for discussions at official, diplomatic, and even at Foreign Minister levels to fill these gaps. No such doubts can be entertained on the views formulated in Paris for the future economic collaboration of the West. Two issues were involved in each of which the United States took a prominent initiative. The first was a healing of the breach in Europe caused by the emergence of the two counter blocks of Six and Seven countries. The second was the need to mobilise and organise the full potential of the free world in providing economic assistance for the poorer nations. Interlocking Issues

These two issues interlock. They are part of the same pattern set by the prospect of competitive co-existence with the Communist countries, which is likely to be the happier and more construc-

tive evolution of the cold war. It the West is to fight that battle on anything like equal terms, it must close its ranks, and it must rationalise the intricate and diffuse mechanism through which it now provides capital and assistance to the rest of the world. The closing of the ranks is to be attempted at an early meeting between countries of the O.E.E.C. at which a further effort will be made to bridge the Six and the Seven. Past efforts have so far proved unsuccessful; but the new approach will be made tn a wider setting. The United States and Canada will participate. This could well be the beginning of new economic council for the West. Some optimists have even envisaged the forthcoming meeting in Paris as the first step towards an Atlantic free trade area, comprising not only the Six and the Seven, but the whole ot the O.E.E.C. and North America. It would be unwise to arouse excessive hopes under this particular banner. We all know what happened when the United Kingdom suggested a free trade area with Canada. This was the occasion for the sharpest “brush off” in the history of Commonwealth economic relations. It would be wiser to leave the cause of a general reduction in tariffs to the signatories of GA.T.T., while trying to establish some kind of relations between the European Economic Community of the Six and the European Free Trade Association. Trend in France

One hopeful augury for such a rapprochement is that France, increasingly conscious of its economic renaissance, is losing its protectionist fears. The recent announcement that France is to remove most of its import quotas and that it will do so in a nondiscriminatory manner, is a clear indication that that country feels increasingly self-confident. On the other hand, the rigid doctrinaires of European integration, who are to be found at the headquarters of the European Economic Community in Brussels, are evidently determined to stifle this new attempt at collaboration. They have already issued a com- * munique which welcomes the decision to set these consultations in motion, but which emphasises that on no account must the work of collaboration weaken the European Community. This has the familiar tang of the kiss of death. Whether these consultations succeed or not will depend on the readiness of all concerned to make concessions. This includes the United Kingdom (which is among the high-tariff countries in Europe), the European Community (which must depart from its opposition to any discussion with the Seven as a group), and the United States (which must use its influence to bring the two groups together). Co-operative Assistance The presumption is that the United States will use that influence. Not only is America conscious of the need to close the ranks of Europe; but It is only from a united Europe that America can secure the collaboration that it needs in the grandiose plans that are afoot for giving further aid to the underdeveloped countries.

The abiding impression which President Eisenhower carried back from his tour of Asia is that there can be no stemming of the flow of aid to the poorer countries. That aid, however, must be truly collective. What is needed is, first, some rationalisation of the overlapping institutions that now give aid. The second need is to secure from the recipient countries an effort of self-help comparable with that which Europe gave to Marshall aid, and which was so largely responsible for the miraculous efficacy of that great and generous gesture by the United States.