The Common Market BUSINESS IN BRUSSELS COMES TO A STANDSTILL

Press, Volume CIV, Issue 30811, 24 July 1965, Page 14

The Common Market BUSINESS IN BRUSSELS COMES TO A STANDSTILL

(By

“Lynceus”

of the “rcenomut”;

I From the "Iconomtxl" Intelligence UnitJ

Pauline, it seems, has done it at last. For years the Common Market has kept us enthralled, like the heroine of the great cliffhanger of the silent screen, by its agonising last-minute escapes from disaster. Pauline, of course, always did escape. Just now, however, it really looks as though the Common Market has gone over the edge.

Business in Brussels is at * standstill. General de Gaulle has peremptorily withdrawn his permanent representatives. His spokesmen describe the Common Market as being in "suspended animation”: one minister has even referred to it in the past tense. Nor does anyone believe any longer that France is bluffing. This does not mean that this remarkable venture, on which such high hopes have been based, has finally foundered. It is most unlikely, even now. that the French would contemplate isolating themselves from their partners by raising tariffs against them. The present condition of "suspended animation” could, theoretically, last indefinitely. Partners To Meet Moreover while it would be quite unrealistic to expect that the French will yield an inch, it is not so certain that their partners will not, once again, finally come to heel. Presumably if they agreed to hand all the proceeds of levies on food imports from third countries into the Common Market’s central fund, and to a permanent system for financing the export of farm surpluses (mostly French), and at the same time abandoned any suggestion of supranational parliamentary control of Common Market finance, as well as their demands for the gradual surrender of the proceeds of national industrial tariffs, France would find it difficult to refuse. But the General is going to make it as embarrassing for his partners as he can. There is no doubt that he does not want an agreement which would leave the onus clearly on him to choose between accepting majority voting inside the Common Market and breaking the Treaty of Rome next January. Even if the “Five” were now to agree to gorge themselves on humble pie, the final crisis would only be postponed. For recent events in Brussels have demonstrated that the delicate balance of national interests on which the Common Market was built has now collapsed. Something For All In broad outline the founding fathers of the Common Market offered something to everyone. France, and to a lesser extent Italy and Holland, were offered support for their farmers. Germany was offered a vast industrial

home market. The Benelux countries, and Italy to some extent, were offered the protection of a supranational structure.

partners agreed to surrender and reinstate agriculture, it is hard to believe that they could tolerate the resulting imbalance of advantages for long. There appear to be only two possible lines of eventual advance. Either the “Five” will try to go ahead to a complete Community—supra national, agricultural and all —without the French, on their own or in conjunction with other European powers; or the French will recognise the logic of the situation, and turn the Common Market into a simple Free Trade Area, again either with or without additional European powers. Of the two possibilities, the second is much the most likely. The “Five” have no catalyst of their own such as the General has been to the Six: and their readiness to face a head-on collision (and almost certainly the need for the re-erection of tariff barriers) between themselves and France is, to say the least of it. uncertain. Superficially, this new pattern which appears to be emerging in Brussels has its attractions for Britain. Agriculture and supranationalism have always been two of the biggest obstacles to British participation in the E.E.C. If they are now both to be swept aside, an accommodation ought to be so much easier to arrange. The Kennedy Round But at this particular time the crisis in the Common Market has wider implications. Unless and until it is resolved there can be no further progress in the “Kennedy round” discussions in Geneva. These discussions have been living up to their name by going round in circles for so long that the difference may not be very great. Yet at least a glimmer of hope for a successful outcome has persisted up until now. More seriously, the uncertainties about the future of the Common Market must add to the menacing shadows already hanging over world trade. The deflationary effects of American and British attempts to solve balance of payments problems, coupled with a breakdown of the Common Market, could very well create the climate for a return to the protectionism and world-wide recession of the 19305.

But since 1957, the pattern of interests and concessions has drastically changed. Where once Germany was the only major potential contributor to the cost of agricultural support she has now been joined by Italy. Prosperity has turned Italy into a massive importer of meat, a commodity which the Italians could not buy from the French if they wanted to. They must import it from overseas. Meanwhile greater efficiency, and the prospect of a high Common Market cereal price have led to a steady expansion of French grain surpluses. So the French, who have to meet only about one-quarter of the cost of Common Market agricultural support, have been drawing anything up to 85 per cent of the proceeds. This situation might be tolerable to France’s partners if they had an assurance either that other countries would be brought in to share the cost of maintaining French farming prosperity, or that they would, through majority voting and direct Parliamentary control, be able to correct France’s excessively favourable agricultural position whether the French liked it or not. It has now been finally demonstrated that neither General de Gaulle nor his successors will be prepared to give any such assurances. A Shorn Market Sb where does this leave us? It leaves us, apparently, with a Common Market shorn of two of its major attributes: supranattonalism and a farm policy. Even if France’s