WHAT SPECIAL TRADE CHALLENGE
DOES WESTERN EUROPE POSE
FOR THE UNITED STATES TODAY?
Since the end of World War II, the
United States has strongly supported a dy-
namic movement toward unity in Western
Europe.
On January 1, 1958, the treaty estab-
lishing the European Common Market-more
correctly known as the European Economic
Community-entered into force. Under this
treaty six countries-France, Germany, Italy,
Belgium, the Netherlands, and Luxem-
bourg-started on the road to economic
union. These countries, which may shortly
be joined by the United Kingdom and per-
haps other European countries, are well on
the way to establishing a Common Market,
providing for free movement of goods, capital,
and labor among themselves, and harmonizing
their commercial, labor, and social security
policies. Above all, in creating a Common
Market the members will eliminate all tariffs
among themselves and establish a common
external tariff toward all other countries.
The Common Market members already
have reduced their internal tariffs by 30 per-
cent, and trade among themselves increased
51 percent from 1958 to 1960. The total
gross product of the Common Market area
increased by 71 percent from 1950 to 1960,
while the U.S. gross national product in-
creased only 39 percent in the same period.
Thus, the Common Market is one of the most
dynamic markets in the world.
We have strongly supported this entire
means unity and
movement because it
strength in Western Europe in our common to defend our civilization against effort Soviet-dominated communism and because it helps to put an end to the former rivalries inside Europe which have led to two world
As George Ball, Under Secretary of
State, said,
"We are engaged at the moment. . . in a struggle
that can determine the future of mankind-or, indeed,
if mankind has any future at all. In that struggle
we must make certain not only that we are eco-
nomically and industrially strong but that the free
world is united as closely as possible in pursuit of
our common purpose. ́
Moreover, in the long run, an expanding
and dynamic economy in Western Europe
means a greater potential market for Amer-
ican goods. This already is a very important
market for us, for in 1960 about $3.8 billion
of our exports, or about 19 percent of the
total, went to the Common Market countries.
Another $1.6 billion, or 8 percent, went to
Britain, making a total of 27 percent to the
combined Common Market-Britain area.
However, as the Common Market mem-
bers gradually eliminate all tariffs among
themselves over a period of years and estab-
lish, again over a period of years, one single
tariff for their entire area, competition for
businessmen of outside countries will be more
difficult.
Therefore, the U.S. Government has been
engaged in urging the Common Market coun-
tries to establish their common external tariff
at the lowest possible level. The lower the
level of this tariff, the better will be the
SOME COMPARISONS-The U.S. and the EEC (European Economic Community)
(1960 figures, unless otherwise noted)
AREA (thousand square miles)
POPULATION 1961 (millions)
ACTIVE WORKING POPULATION (millions)
CRUDE STEEL PRODUCTION (millions of metric tons)
HARD COAL PRODUCTION (millions of metric tons)
ELECTRICITY PRODUCTION (millions of kilowatt-hours)
AUTOMOBILE PRODUCTION (thousands of cars and commercial vehicles)
GROSS NATIONAL PRODUCT (billion dollars)
IMPORTS (billion dollars)
EXPORTS (billion dollars)
*Excludes intra-Community trade.
Source: European Community Information Service.
opportunities for American industry to com-
pete in this rapidly expanding market which
provides great opportunities for American
exports.
Existing American law, however, makes
it virtually impossible for the United States
to conduct effective tariff negotiations with
the Common Market. This is because the
Common Market negotiates tariffs on a broad,
across-the-board basis, while current American
law limits the authority of the executive branch
to conduct negotiations in two important ways.
That authority is limited, first, as to the extent
of concessions which may be granted in ex-
change for reciprocal concessions and, sec-
ondly, by the fact that the executive branch
must negotiate selectively with respect to in-
dividual items, rather than comprehensively
on some type of across-the-board basis.
It is clear, therefore, that the United
States needs new legislation which will grant
the executive branch broader and more flexible
negotiating authority. Such legislation will
enable the U.S. Government, by negotiating
for tariff reductions, to help American pro-
ducers take advantage of the great export
opportunities in the rapidly growing European
Common Market. It will help, by strength-
ening trade relations, to maintain the political
and economic solidarity with Western Europe
that is so vital to the national security of the
United States and the well-being of the re-
mainder of the free world. And it will enable
the American Government, negotiating with
the expanding European Common Market, to
reduce barriers to trade jointly so that the
products of the developing countries can find
markets in the free world.
The abnormal years of the postwar
period, when Americans could sell their goods
to Europe without half trying, are over.
Ahead are days of challenging competition.
The European challenge to America's leader-
ship in world trade is one of the major trade
problems to be met with courage and
imagination.
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