LAST CHANCE FOR MR. AMORY
By
NICHOLAS DAVENPORT
A PIECE of domestic news as depressing -as the foreign is the coming retirement of Mr. Amory as Chancellor, Although I have often criticised his hesitancy in this or that, I have always a) admired the skill with which he steered the Treasury from the dangerous fundamentalism of Ill Mr. Thorneycroft to the reason- able flexibility of its present expansionist approach. If this is to be his last Budget, as he hinted in his constituency, it will be an occasion for mourning for me and everyone else except the dividend-strippers and tax-loss far- mers and bogus market gardeners. If I may make one last appeal to him before he goes, it is to pave the way for the settlement of the European trade dispute on the following lines. The breakdown of the Summit conference makes it all the more vital that Europe should conipose its trade differences and move towards economic, if not political, integration. A breath- ing-space has been given by the recent decision of the Six at Luxembourg to postpone the Hall- stein acceleration, which would have meant a sharp raising of the German and Benelux tariffs against us on July 1, and try to negotiate an agreement with the Seven which will expand and not restrict trade between the two regions. The door is therefore still open. The Seven are to meet at Ministerial level in Lisbon this week and the opportunity presents itself for a realistic first step towards a rapprochement.
To be realistic means recognising that the Six, having formed a customs union, will never join the free trade area and that the professional neutrals of the latter—Switzerland and Austria— will never join a customs union which talks of political integration. The UK, having just partici- pated in the formation of the free trade area, cannot apply on its own for membership of the customs union and leave its fellow members in the lurch. Realism, therefore, demands that we all stop making haste—that the Seven go as slow towards free trade as the Six are going slow towards their customs union. Further, it seems that as the common tariff which the Six are proposing to maintain against the outside world is a reasonable one, and not very different from ours in many industrial goods, we in the UK should work towards harmonisation of tariffs with the Six and as a gesture reduce our own tariffs quickly where they are higher than the proposed common tariff of the customs union. Finally, it would be more realistic to emphasise the points of possible agreement with the Six than rehearse the points of disagreement. Mis- understandings should be cleared up.
The greatest misunderstanding has been over agriculture. As Mr. A. C. L. Day points out in his new contribution to the excellent symposium on the Free Trade Proposals published by the Oxford Institute of Statistics,* it is now realised that there will not be a free movement of agricul- tural goods within the customs union of the Six but merely a managed market. Any one of us could negotiate an agricultural agreement of the managed type. The next misunderstanding has been over the assumed impossibility of recon- ciling our Commonwealth preference system with the European community. But the Common- wealth preferential tariffs are being slowly eroded. Recently there were reductions in the Australian and New Zealand preferences and it is certain that there will be many more over the next ten years. Moreover. there has been a distinct change in the attitude of the Commonwealth overseas countries towards the European community. Both Australia and New Zealand now seem ready to bargain with the Six if the UK hesitates too long. I agree with Mr. Day that there is a strong case for the Commonwealth overseas extending the same tariff concessions to European goods as to British in return for increased European markets * THE FREE TRADE PROPOSALS. (Blackwell, -30s-.) for their farm products. The European com- munity would probably welcome an agreement which gave European manufacturers greater access to Commonwealth markets. It is worth noting that the overseas territories of France, Holland and Belgium can send their products free into the customs union while the manufacturers of the Six have preferential entry into the terri- tories only after some protection has been allowed for the infant industries overseas.
We in the UK should not be afraid of a settle- ment on these lines. Any agreement which causes trade' to ,expand between the European com- munity and the Commonwealth overseas will
enrich our customers and must swell the volume of international trade. Besides, a deal between the Six and Commonwealth countries would prob- ably bring an invitation to the UK to join the customs union.
Meanwhile it is important for Mr. Amory to make one last attempt to prevent the OEEC being transformed into a 'foreign aid' body with Ameri- can and Canadian participation. At this late hour he should try to 'keep OEEC intact as a European economic body concerned with the maximisation of European trade. Within a re-formed and re- vitalised OEEC the customs union of the Six could endure with the free trade area of the
Seven just as the customs union of the Benelux countries remained for years as an enclave of the OEEC Seventeen. The OEEC could then make a common front towards dollar trade which in certain fields should still be subjected to quota rules. The American and Canadian attempt 10 kill the OEEC, in which General de Gaulle at one time connived, should be circumvented. EuroPc must stand together.
But this does not mean that the political We' gration of the Six is any more desirable. It is rumoured that General de Gaulle is now anxious to play down the idea of political integration, for what French President could lightly regard the possibility that West Germany will sooner or later dominate the union by sheer force of economic pressure? It will be enough for the Six to work towards complete freedom of move- ment for capital and labour in their area. It cannot be the wish of the French President to hand over too much real power to the EEC bureaucrats housed in the Brussels headquarters where 3,000 of them are already behaving as if they were the fonctionnaires of a Super-State. So, please, Mr. Amory, act quickly and wiselY.
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