ROME TREATY—II Accelerated Tariff Reductions In E.E.C.

Press, Volume C, Issue 29570, 20 July 1961, Page 10

ROME TREATY—II Accelerated Tariff Reductions In E.E.C.

(Reprinted from "The Guardian.” Published by Arrangement)

Progress in reducing tariffs has been faster than was laid down in the treaty. The first two cuts of 10 per cent, each in internal tariffs (on trade among the Six) were made on January 1, 1959, and July 1, 1960. It was decided in May 1960 “in view of the favourable economic situation” that the third 10 per cent, reduction, due on January 1, 1962, should be brought forward to January 1, 1961 and that all quotas on trade within the Community should be abolished by the end of this year. At the same time it was agreed that by January 1, 1962, internal tariffs should be cut by a further 10 per cent, at least, and if possible by 20 per cent. For reasons explained below (see "Agricultural policy”) it now seems unlikely that the Ministers will agree to the 20 per cent, reduction. Common Tariff The first move towards the common external tariff was also made a year earlier than required by the treaty. Subject to a number of exceptions, the difference between existing national tariffs and the common tariff was reduced by 30 per cent, on January 1, 1961. Adjustments were made on the basis of the original common tariff reduced by 20 per cent; this reduction, however, will be made permanent only if the

aimed at increasing agricultural efficiency are to be financed out of a special fund created for the purpose. European organisations will be set up to control grains, be set up to control the markets for wheat, coarse grains, dairy products, and sugar. Community-wide target prices are to be established, and tariffs will be replaced by variable import levies, based on the difference between the world market price and the higher target price maintained within the Community. The proceeds of the levies will go into stabilisation funds to help support internal prices. For meat, poultry, and eggs there will be co-ordination of national marketing organisations and common price policies. In general Customs duties will be applied rather than import levies. Customs duties will also be retained for fruit, vegetables, and -wine and common rules of competition will be enforced. The Commission envisages a common agricultural market, with no internal barriers, by 1967. Proposals for an early start on bringing prices into line have, however, resulted in a sharp difference of opinion among the Six. Western Germany, whose farmers are the most highly protected, has refused to lower its prices in advance of the election due this

Europe’s Trade.

other members of GATT agree to a similar cut in their own tariffs during the current negotiations. As a result of this move in January external tariffs (i.e. the tariffs applicable against British goods) have been increased for Germany, Belgium-Luxembourg, and Holland, and reduced for France and Italy. The second move towards the common external tariff is due to take place, according to the treaty, at the end of 1965, but could crane sooner if the member countries agree to a further speeding-up of the timetable. Movement of Labour Last month the Council of Ministers of the Six issued the rules that are to apply to movements of labour during the transition period. Under these rules, no country will be required to permit entry beyond the point where full employment is threatened. Workers will not be allowed to move to other countries in search of jobs, but only if a job is offered them; even then a job may only be offered to a worker from another country if the Labour Exchange has been asked and has failed to fill a vacancy. Only where there is a recognised labour shortage will labour permits be given automatically. The incoming worker must remain with his original employer for a year, when he may switch jobs: and he must ■wait three years if he wishes to change his trade or profession. Full freedom to chose what work he likes is granted only after four years in regular employment. Finally, migrant workers are to enjoy the same legal rights in relation to employers as any other citizen and must be paid full union rates.

The Commission's plans for a common agricultural policy (presented last year) lay it down that protection for farmers is to be provided by maintaining market prices through control over imports and direct intervention in the market. Structural reforms

autumn. On the other hand, France, Holland, and Italy—the main food exporting countries—are all demanding that the common agricultural policy must be got under way without delay. The French Government, under pressure of the peasants’ revolt, has recently threatened to veto further progress towards a Customs union among the Six until German markets are opened wider to French farmers. Political Aims The eventual political implications of the European Common itjy remain uncertain. The treaty itself contains no specific promises relating to political matters generally apart from the broad reference in the preamble to establishing “the foundations of an ever closer union.” At a meeting of Heads of Government of the six common Market countries in February President de Gaulle put forward his plan for a “Europe des Parties.” This envisages political co-oper-ation among the Six through confederate institutions. National sovereignties would not be merged but would be a Supreme Council of Ministers directly responsible to the Governments themselves. Within this framework the existing Community institutions would play a subordinate part. No decisions were reached in February, but a committee of experts was set up “to formulate concrete proposals for strengthening political unity among the Six.” A further summit conference of Community leaders is being held later this month to decide what action should be taken. The most likely result seems to be some development along the lines proposed by President de Gaulle, perhaps with greater prominence being given to the present Community institutions. But while the European federalists have agreed to accept the confederalist approach for the time being they have not abandoned their eventual goal. (To Be Continued)

1957 Millie U.S. d< 1960 ms of ollars % Increase Common Market— Total imports 24,816 29,559 19.1 Total exports 22,440 29,721 32.4 Trade within Common Market 7,154 10,243 43.2 E.F.T.A.— Total imports 20,060 23,092 15.1 Total exports 16,646 18,542 11.4 Trade within E.F.T.A. 2,955 3,503 18.5