The Dominion THURSDAY, MAY 21, 1931. EUROPEAN TARIFF BOMBSHELL

Dominion, Volume 24, Issue 200, 21 May 1931, Page 8

The Dominion THURSDAY, MAY 21, 1931. EUROPEAN TARIFF BOMBSHELL

Judging by the controversy aroused, the announcement of the proposed Customs Union between Germany and Austria has descended upon Europe like a bombshell. Amid the dust and confusion, certain facts relevant to the proposal. have been obscured. . There are three points to be noted, namely, its juridical, economic, and political implications. With regard to the first, Austria is bound by the very strict letter of the Geneva Protocol of 1922 and by Articles 217-220 of the Treaty of St. Germain. Under the former, which set out the scheme for the financial reconstruction of Austria by means of an international loan guaranteed by Great Britain, France, Italy,, and Czecho-Slovakia, Austria pledged herself not to alienate her independence, and “to abstain from any economic or financial engagement calculated directly or indirectly to compromise this independence.” This stipulation, however, was “not to prevent Austria from maintaining, subject to the Treaty of St. Germain, her freedom in the matter of Customs tariffs commercial or financial agreements, provided always that she shall not violate her economic independence by granting to any State a special regime calculated to threaten this independence.” So much for the Protocol. Under the Treaty of St. Germain, Austria undertook in explicit terms to extend to all the Allied and Associated Nations the full benefit of “most favoured nation treatment.”

Every favour, immunity, or privilege in regard to the importation, exportation, or transit of goods granted by Austria to any Allied or Associated State or to any other foreign country whatever shall simultaneously and unconditionally, without request and without compensation, be extended to all the Allied and Associated States. —Article 220.

In the light of these treaty obligations the propriety of the proposed Austro-German Customs Union is clearly a juridical question, and it is very satisfying to note, not only that it has been agreed by the Council of the League of Nations to refer it to the International Court of Justice at The Hague, but also that the two nations concerned have intimated their willingness to suspend the proposed agreement in the meantime. The political aspect of the question has been given an exaggerated importance by the clamour of French politicians and the Paris Press. French opinion sees in the proposal the thin end of the wedge for a return of the pre-war dream of Teutonic domination in Central Europe. The Journal des Debats declared that “Germany and Austria never would have taken the initiative in such an accord preparing for the ‘Anschluss’ (political Union), if we still occupied the Rhine,” to which the Frankfurter Zeitung retorted: “We venture paradoxically to tell the Frenchmen that the German-Austrian agreement signifies the end of the ‘Anschluss’.” While there is, of course, something to be said for the suggestion that a fiscal agreement between two former allies arbitrarily separated by treaty restrictions might create opportunities for political communions subversive of the peace of Europe, it is the duty of statesmen and economists to consider whether the levelling of trade barriers between two jiations is not a welcome event of more immediate importance. As the Vienna Nieue Freie Pressc remarks, “the League of Nations’ late Economic Conference issued a memorandum urging a Customs union such as Germany and Austria are seeking to establish.”

It is now recognised that until a movement has been begun, and extended, for the removal of the trade barriers which are blocking the free transit of exports and imports in Europe the present economic stagnation will continue. The proposed Austro-German Customs Union is a beginning in that direction. If the judgment of The Hague Court goes against it, then it will become a question for the League of Nations. M. Briand contends that it should be a matter for the League whether or no, which is hardly the kind of thing the public would expect to hear from the statesman who originated the idea of a United States of Europe.