Sunday. February 18, 1S5I
MEDrORD (OREGON) MAIL TRIBtJHE ITVI
IyirpeoirD
lcimi3iniDC Pinioffko'SDOini Possiassedl
Steps to Unity
Slow, Uncertain,
Observers Say
(Editor's note: This is an
other in lha teiits of Great
. Decisions program discus
sions. It was prepared by the
Foreign Policy association
and distributed throughout
Oregon by the general ex
tension division of the Ore
gon Stale system of higher
education. This week's dis
cussion is on economic uni
fication in Western Europe.)
Unification of the econo
mies of Western Europe has
been high on the agenda of
the nations of that area and
of the United States govern
ment since the end of World
War n. 'U.S. Marshall Plan
aid, in fact, was offered in
1948 with the understanding
that West Europe would
build "an expanding economy
. . . through economic integra
. tion."
Steps toward economic
unity, however, have been
slow and sometimes uncertain,
observers say.
Belgium, the Netherlands
and Luxembourg (Benelux
countries) have made the most
progress. With a stroke of
the pen on Feb. 3 these na
tions wiped out 97 per cent
of all the trade barriers be
tween them. Ultimately the
Benelux Economic Union will
do business with the rest of
the world as if it vre a single
nation.
Another Step
Another unification step has
recently taken place on a
more ambitious scale but at
a slower rate. The Benelux
countries, in concert with
France, West Germany and
Italy brought the European
Economic Community into be
ing oa Jan. 1 of this year.
The Community better
known as the "Common Mar
ket" has so far produced no
startling changes in trade
practices among these six na
tions. Customs barriers and
tariffs remain at present I
levels for another 12 months.
But on Jan. 1, 1959, all
tariffs among "the six" will
be cut a flat 10 per cent. Each
year successive tariff cuts will
be made until, 12 to 15 years
from now, there will be no
tariff barriers among these
nations and , "the six," like
the Benelux "three," will do
business with the rest of the
world as an economic unit.
Broader Integration
A still broader integration
step, the proposed Free Trade
Zone, has run into serious ob
stacles. This plan would as
sociate Great Britain,' Scan
dinavian countries and per
haps other European nations
with the Common Market on
a privileged basis. Tariffs
within the zone would be
eliminated gradually but zone
countries would keep the
right to set their own tariffs
with the rest of the world.
Keternng to progress on
these three unity plans
Benelux Union, Common
Market, Free Trade Zone
observers point out that the
more ambitious the plan, the
slower the progress. Nor is
there complete a g reement
among U.S. experts whether
current progress on unity is
working for or against the
United States.
An economically unified
Western Europe would be a
stronger ally, according to
long-standing U.S. policy. But
to replace European national
tariffs with a regional tariff
might, in the opinion of some
experts,- create a stronger
rival instead of partner to
U.S. trade interests.
Possible Answer
One possible answer is for
united Europe and the United
States to cooperate even more
closely in the future on tariff
and trade reciprocity.
In any event most experts
agree that the various Eu
ropean unity plans bear close
watching. More than 15 per
cent of all U.S. exports go to
the six Common Market na
tions and over 11 per cent of
all U.S. imports originate in
these same countries. The suc
cess or failure of European
unity will inevitably affect
business and prices in the
United States.
Great Britain is the staun-
ft Main St.
JL
DAIRY-SMITH
at Genessea
'Iron sharpens iron, one
man sharpens another."
Proverbs, the
Holy Scripture
chest booster for the Free
Trade Zone, a looser econom
ic arrangement dovetailed into
the Common Market. The ex
planation, experts say, is
simple.
Such a zone would permit
Britain to enjoy the elimina
tion of tariffs on its West Eu
ropean trade (14V& per cent of
all British export trade) but
it would not force Britain to
adopt regional tariffs on its
trade with other British Com
monwealth countries (half of
all British export trade).
Special Arrangements
According to a number of
French economists this plan
lets Britain eat its cake and
have it too. If Great Britain
enjoys special trade arrange
ments with both West Europe
and the world-wide Common
wealth, they argue, the Brit
ish will be in a better competi
tive position than their Eu
ropean friends. For example,
Great Decisions topics
will be discussed. on KBES
TV at 5 p.m. Saturday, r'eb.
22. and on radio station
KMED. Medford. at 9:05
p.m. Sunday, following.
under these terms British in
dustry would be a more at
tractive investment for vital
U. S. capital.
Denmark and the Nether
lands are also at odds with
Britain on the Free Trade
Zone. This is largely because
of a British-sponsored clause
in the proposed treaty that
would exempt agricultural
imports from the low tariff
provision. Britian is anxious
to protect its own agriculture
by maintaining a tariff wall
against foreign farm products.
But the Scandinavian coun
tries are heavy farm and dairy
exporters.
The difficulties facing the
Free Trade Zone plan, ob
servers say, are typical of the
economic dilemmas facing all
Western nations, including
the United States. The pros
perity and strength of all
Western nations depends . to
an important degree on
healthy, growing i n t e ma-
tional trade. Yet each nation
understandably wants to pro
tect its own farms and m-
dustrites from foreign com
petition.
Comparable Challenge
Meanwhile the American
people face a comparable
challenge. U. S. reciprocal
trade arrangements with the
rest of the world are govern
ed by the Trade Agreements
Act, which expires June 30
unless the present session of
Congress renews it, as the Ad
ministration has requested.
Congress will have to de
cide, in other words, whether
this country will continue in
the direction of more trade
cooperation with other na
tions. We have urged this' pol
icy on Western Europe. Will
we follow it ourselves?
Economic maneuverings in
Western Europe have politi
cal overtones, too, experts
point out. And some of these
political questions are a chal
lenge to U.S. policy.
Struggling Economy
France's struggling econ
omy in the fourth year of the
Algerian rebellion is a prime
example.
French . economic recovery
following World War II was
not so spectacular as West
Germany's, the figures show,
but it was considerable. By
1954 French production had
risen to 138 per cent of pre
war levels. Industrial expan
sion runs at about 10 per cent
a year.
But the Algerian rebellion
is costing France one billion
dollars a year and keeps (ac
cording to former Premier
Guy Mollet) 700,000 Franch
troops in combat. The drafting
of coal miners alone is cost
ing France an estimated two
million tons of coal a year.
France's Deficit
Another important factor is
France's deficit in interna
tional trade. In 1957 imports
rose 28 per cent while exports
increased by only 10 per cent.
The deficit (imports over ex
ports) reached $820,000,000
in the first six months of
1957.
Devaluation of the franc,
import restrictions and other
unpopular "austerity" meas
ures brought some improve
ment. During December and
January France was able to
export more than it import
ed. But the year end trade
deficit was $1,400,000.
France needed outside help
and got it from the United
States ($274,000,000 three
year loan), its West European
partners and the UN Inter
national Monetary Fund. To
tal credits amount to $655,
000,000. Deferment of Payments
Part of the U.S. loan is ac
tually a deferment of pay
ments due this country on
earlier loans to France. But
it will have the effect of leav
ing France with more dollars
in its treasury during the rext
three years. In addition
France will be able to buy
U.S. farm surpluses and mili
tary equipment for francs in
stead of dollars.
But Algerian rebels and
the Arab world severely crit
icized the "United States for
helping "finance" the Alger
ian war: "The main material
support for the French colo
nial war in Algeria still comes
from the "United States,"
wrote an Algerian rebel lead
er, M'hammed Yazid, in a let
ter to The New York Times
of Jan. 28.
Apparently any U.S. eco
nomic partenership with a Eu
ropean ally automatically im
plies political partnership as
well. The American people's
dilemma, observers agree, is
not easy to resolve.
PROMOTED TO CAPTAIN Col. W. H. Prentice, command
er of the 417th Engineer Brigade, pins captain's bars on
CharleS Hurst during a recent promotion ceremony. Hurst
is employed by the bureau of land management. He is as
signed as a construction inspector in Army reserve unit.
XP IPLDDV RC
xciguse", LAR DCMP
VCO LAR QUP
IPGQ C N COI
HOGQCBPIG!
BARKER'S
MAIN -CENTRAL
Election Official
Named In Portland
Portland OH Multnomah
County Commissioners Friday
announced the appointment of
John D. Weldon, 42, to suc
ceed James W. Gleason as
county registrar of elections.
Weldon has been superintend
ent of county election boards.
Gleason died Feb. 5 at the age
of 68.
CHOICE NEAR
Richmond, ! Va. RP) Demo
cratic Party sources said selec
tion of a candidate to run for
the Senate seat of retiring
Sen. Harry F. Byrd will be
made within a few days. The
choice was believed narrow
ed down to two members of
the House, Reps. Watkins Ab
bitt and William Tuck, both
staunch segregationists.
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