European Free Trade Area Research Articles

Does Mercosur's Trade Performance Raise Concerns about the Effects of Regional Trade Arrangements?

This study employs a new methodological approach that measures production efficiency in changing trade patterns. It shows that the most rapidly growing products in Mercosur's intratrade generally are goods in which members do not have a comparative advantage and have not been able to export competitively to outside markets. This is consistent with substantial trade diversion within the arrangement. Mercosur's discriminatory tariffs against nonmembers, which are four to six times higher than those in arrangements such as the European Union, European free trade area, or North American free trade agreement, are likely the cause. Recent further increases in Mercosur's tariffs against nonmembers are likely to exacerbate the magnitude of trade diversion.

Perfidious Albion? Britain, Plan G and European integration, 1955–1956

In 1956, the British government proposed to complement the embryonic EEC with a wider European Free Trade Area, known in London as Plan G. At that time, British policy was accused by some of attempting to sabotage the development of the Six Messina Powers. Those contemporary charges of ‘Perfidious Albion’ have been sustained by the majority of historiographical opinion. The following article argues that the need to either acquit or condemn Britain of perfidy has obscured the intricacies of the policy beneath the Free Trade Area proposal. Concentrating on the Whitehall decision‐making process from 1955–56, it suggests that Plan G evolved from consideration of a counter‐initiative to the Common Market in Autumn 1955 but that it eventually became an attempt to come to terms with the Six, mainly to defend British interests. Furthermore, Plan G is only fully understood when placed in the framework of wider foreign and economic policies.

Whither EU-Israeli Relations? Common and Divergent Interests (review)

Book Reviews 123 question of how we are to keep Zionism alive more than fifty years after its chief reason for being, the creation of the State of Israel, has ceased, fortunately, to exist. Harold J. Harris Emeritus Professor Department of English Kalamazoo College Whither ED-Israeli Relations? Common and Divergent Interests, by Ephraim Ahiram. Frankfurt-am-Main: Lang, 1995. As a consequence of the breakdown of communism, the European Community had to focus its attention on relations and policies towards Central and Eastern European countries. But early in 1994, the ECI Commission developed a new strategy on the grounds that the preaccession policy towards the ex-communist countries must not interfere with the Community commitment towards the Mediterranean region. The summit meeting in Barcelona in November 1995 responded to this view and marked a turning point in the Union's relations with its southern Mediterranean partners. The composition of this meeting was potentially explosive since it included Cyprus, Greece, and Turkey; Israel, Syria, and lebanon. But the idea of political and economic guidelines for the setting up of an institutional framework with thesecountcies was agreed upon. Negotiations are currently underway between the European Community and the various Mediterranean countries; these negotiations have been completed for Tunisia, Israel, and Morocco and are at the exploratory or negotiation stage with Jordan, libya, Egypt, Algeria, Syria, and the PLO. The book Whither EU-Israeli Relations focuses on the problems and interests involved between Europe and Israel. It is the first comprehensive study ofthe subject and was elaborated by a group ofEuropean and Israeli experts. The published papers cover political, economic, cultural, and human rights aspects as well as options for future scientific cooperation. The research project was initiated by the leonard Davis Institute and the lEC=European Community; EU=European Union (since 1993); EFfA=European Free Trade Area; GATT=General Agreement on TariOS and Trade (Geneva, until 1994); wrO=World Trade Organization (Geneva, replacing GATT); NAFfA=North Atlantic Free Trade Area; APEC=Asian Pacific Economic Cooperation; Mercosur=Argentina, Brasilia, Uruguay, Paraguay. 124 SHOFAR Summer 1996 Vol. 14, No.4 Friedrich Ebert Stiftung in Tel Aviv. In their introduction, the two editors, Ephraim Ahiram and Alfred Tovias, stress the point that since the Near East peace talks became serious in 1993, overall relations between Europe and Israel have moved to a focus on common rather than divergent interests. That was not always the case in the past. In their view, there was an antiIsraeli policy which reached its peak in the eighties when the Community, in its Venice Declaration, recognized "the legitimate rights of the Palestinian People to exercise fully its right of self-determination," and most ofthe Community members declared an arms embargo on Israel. And they remind us that, on the other hand, it was upon the veto ofIsrael that neither the EC nor its members were invited to co-sponsor, together with the u.S. and the Soviet Union, the initial Peace Conference in Madrid. For many years the disturbed relations were, in the words of the editors, "a function of the oil market." But things have changed meanwhile. Today Europe is the major export market for Israel and a source of Israel's largest share of imports, and it is Israel which urges the Community to assist the Palestinian authorities in building up viable economic structures. For herself, Israel desires economic anchorage in Europe, but to achieve this it is essential that links be strengthened or established with its neighbors at the same time. The strategy for Israel should be, as Luis de Sebastian suggests in his anicle, to conclude trade agreements with different countries and trade blocks (such as EC, US, and EFTA), an approach for which the author coined the term "polilateralism." As for Europe, as long as the Community constitutes "unfinished business," Israel will have to deal with a "moving target in a changing environment" (Leora Rubin Meridor). Ideally, a free trade area should be established between Israel and her neighbors, as Eberhard Rhein, the responsible EC Director for the Mediterranean region, recommends, much in the way Europe and Israel have accomplished their free trade arrangement since 1975 and 1989. Jacob Kol, Victoria Curzon Price, and...

Does the EFTA Court Interpret the EEA Agreement as if it were the EC Treaty? Some Questions Raised by the Restamark Judgment

The European Economic Area (EEA) Agreement signed in May 1992 between the European Free Trade Area (EFTA) States, the European Community (EC) and the EC member States' seeks to establish “a dynamic and homogeneous” area by extending provisions which apply within the European Community to the EEA.2 The first decision of the EFTA Court,3 interpreting the EEA Agreement to determine its application within the legal orders of the EFTA States, concerned the Finnish alcohol monopoly. The Restamark decision was awaited with great interest to know to what extent the EFTA Court would follow the European Court of Justice's interpretation of the EC Treaty in order to achieve the aims of the EEA Agreement.

Central European Free Trade Area

Following very difficult and intensive negotiations, an agreement on the establishment of a new regional economic organization to be called the Central European Free Trade Area (CEFTA) was signed in Cracow (Poland) at the end of December 1992. Though fonnally the Czecho-Slovak Federal Republic still existed at the time, the relevant documents were signed by representatives of four governments-Poland, Hungary, the Czech Republic, and Slovakia in order to enable the latter two to assume the obligations negotiated with the other CEFTA partners by the extinct federal government. The countries of the so-called Visegrad group possess (next to Russia) the largest economic potential in Eastern Europe; they are also furthest down the road of economic reform. They have a total population of some 65 million. In 1992 their combined GDP was US$130 billion, exports to the advanced countries were US$25 billion, and their net currency reserves were US$13 billion. The principal weaknesses of the CEFTA economies are their large external net debt of approximately US$70 billion; a relatively high inflation rate, particularly in Poland; and steadily growing unemployment. The collapse of the centrally planned economy led to a severance of most of the traditional economic links in East-Central Europe. The directions of specialization in production and trade delineated within the old CMEA framework did not stand the test of market economics. As a result, trade with the Visegrad group accounted already in 1990 for only 4.5 percent of Polish imports and 5.1 percent of exports. For the former Czechoslovakia the figures were, respectively, 12 and 10.3 percent and for Hungary, 7.1 and 5.8 percent. The next two years (1991-92) brought no basic improvement in this respect in view of continuing symptoms of recession in the countries in question and growing competition on their markets from the advanced countries. The conclusion of association agreements with the European Community and this grouping's high share in the trade of Poland, the former Czechoslovakia, and Hungary make it unlikely that the establishment of CEFTA

THE TRANSITION TO EUROPEAN MONETARY UNION AND THE EUROPEAN MONETARY INSTITUTE

The European Monetary Institute (EMI) will prepare a framework for European Monetary Union (EMU) monetary policy during the transition to the EMU. This involves a trade‐off between deepening financial market integration and harmonizing central bank instruments, a choice between centralized and decentralized monetary strategies with significant welfare implications, and a trade‐off between expected welfare and certainty of policy outcomes. As a result of being dominated by national central bankers and of the conflict between the core and the periphery of the European Community (EC), the EMI is biased toward an inefficient solution. Enlargement of the EC by the European Free Trade Area (EFTA) group would raise the probability of a more efficient, two‐track EMU, which initially would involve only the core group.

After COMECON: A free trade area in Central Europe?

AFTER THE COLLAPSE OF COMECON we can witness the formation of new regional groupings in Central Europe, indicating a trend towards more integration in the region. Before and after World War II the small countries in Central Europe were always tied to some greater power outside the region and could not have developed significant mutual cooperation even if they had wished to. Now that in the eastern part of the region systemic changes have begun and COMECON has collapsed, the question arises: will these countries develop mutual cooperation or will they swing again to one side? This article aims to provide some historical and economic background followed by a discussion of the problems of the recently established Central European Free Trade Area (CEFTA).

Redefining U.S.-West European Relations in the 1990s: West European Public Opinion in the Post-Cold War Era

Fundamental U.S.-West European security and economic relations are being subjected to a thorough re-examination—and potential redefinition—on both sides of the Atlantic. This is occurring as the Cold War is now a topic for historians and as the economies of the 12 European Community (EC) members become increasingly integrated as a result of the EC's 1992 initiative and its ambitious plan for the 1990s. The former Warsaw Pact nations are working to develop stronger economic, political and even security ties with both the United States and Western Europe. The dramatically reduced security threat coupled with strong domestic budget pressures in the United States are leading to a substantial reduction in the American military presence in Western Europe. On the economic front, the EC and the European Free Trade Area are forming a gigantic 19-country free trade area, with the potential of future expansion to include some East European nations. Meanwhile, the United States and Western Europe continue their prolonged deadlock in GATT trade negotiations primarily over the EC's large agricultural subsidies.The attitudes of European publics toward the United States will play a critical role as European and American leaders sort out their new relationship. Therefore, it is of interest to scholars and policymakers alike to examine the trends in West European public opinion as they relate to America, its policies and its perceived role in the post-Cold War future.

Corrigendum

In the Note “Interpretation of the Jurisdiction and Judgments Convention” on page 219 of the January issue [(1989) 1 I.C.L.Q. 219] some words were transposed regarding progress with further conventions. The sentence should have read:A new accession convention is being negotiated with Spain and Portugal and a “parallel convention” was signed in September 1988 with the member States of the European Free Trade Area (EFTA).

Book Reviews

Book reviewed in this articleNew Developments in the Teaching of Economics. Edited by K. G. Lumsden.Assessing Economic Performance. By Michael Lipton.The European Free Trade Area Association and the Crisis of European Integration. By a Study Group of the Geneva Graduate Institute of International Studies.The Distribution of National Income. Edited by Jean Marchal and Bernard Ducros.National Economic Policy : The Presidential Reports. Edited with commentary by Reuben E. Slesinger.Real Wages in Germany 1871‐1913. By Ashok V. Desai.Foreign Exchange Crises. By Paul Einzig.Private Practice in Britain. By Samuel Mencher.The Economics of Subsistence Agriculture. By Colin Clark and M. R. Haswell.Input‐Output Table of the Greek Economy (Year 1960). By Dr. A. KoutsoyiannisCharting the British Economy. By Barbara Marlow, with a Prologue by George Polyani.Corporate Planning in Industry. By Aris Presanis.

A Survival Test for ECM

In view of the hostilities periodically marring relations between European nations, creation of a European free trade area would be a notable achievement. An examination of the nineteenth-century free trade movement may help foretell the future of the Common Market.

A Trade Policy for the 1960s

THE savant who first observed that politics is art of said much less than seems to meet eye. The ex ante and ex post concepts of the possible are dis concertingly different. One might better say that politics is art of enlarging possible. And one could well add that an in dispensable step in process is to have a view of goals be yond for which one is reaching. Our exploration of a trade policy for 1960s, therefore, will not proceed from premise that a democratic government is captive of parochial interests it represents; on that as sumption, we are slated for dinosaur's fate. Instead, our general frame of reference is this: What trade policy does decade of 1960s demand for survival and growth? And what could a determined President hope to achieve, at outside, if he exploited every possibility in his position of leadership? In past decade or two, a deep-seated change has occurred in traditionally protectionist views of more highly devel oped countries of world. During this period, it has been pos sible for twoscore members of General Agreement on Tariffs and Trade to cut deep into their import barriers. The Organization for European Economic Cooperation managed to implement an unprecedented Code of Trade Liberalization. A European Coal and Steel Community has been achieved and a European Economic Community and European Free Trade Area have followed. Each of these programs constituted a minor miracle of a sort, patently impossible before it actually occurred. The fact that miracle none less occurred can be ascribed to various forces. One of these forces?one which can easily be underemphasized? has been persistent advocacy by most professional economists in advanced countries for reduction of trade barriers and broadening of markets. The wartime emergencies and post war problems precipitated economists into posts of key impor tance, not only in United States but in many other advanced countries as well. In these posts, influenced by fresh professional analyses, economists-turned-administrators have supported various programs of trade liberalization.

Brains, Economics, and World Outlook

As Europe works at the problems of welding the Six into a European Common Market, and considers further the possibilities of unifying the ECM in the European free trade area, it is interesting to...

The European Common Market and Free Trade Area (A Progress Report), The First Year of the European Economic Community, The Free Trade Area Negotiations, The Free Trade Area Negotiations and The European Free Trade Association: A Preliminary Appraisal

The European Common Market and Free Trade Area (A Progress Report), The First Year of the European Economic Community, The Free Trade Area Negotiations, The Free Trade Area Negotiations and The European Free Trade Association: A Preliminary Appraisal

FREE TRADE AND THE CONGO BASIN TREATIES1

The Conventional Basin of the Congo is a vast area comprising several countries in Central Africa, all of which follow a commercial policy of equality of economic opportunity, commonly known as the ‘open door’ policy. A review of the Congo Basin Treaties, in which this policy was enunciated, is of particular interest at the present time when, on the one hand, the European Free Trade Area is under discussion and, on the other, several African territories appear to be on the verge of political independence and economic advancement.

Europe's Unification and Canada's Trade

The first day of January, 1959, saw the opening moves in the formation of the European Economic Community, the most spectacular experiment in regional economic integration to occur in recent history. If no hitches occur, within fifteen years West Germany, France, Italy, and the Benelux countries will have formed something between a customs union arid a full economic union, with internal free trade, a common external tariff, partial freedom of internal factor movement, partial co-ordination of economic and social policies, and a common framework of agricultural protection and control. There is a small and wildly fluctuating probability that this “common market” will become embedded in a larger European free trade area organized by Great Britain and including Denmark, Norway, Sweden, Switzerland, Austria, and possibly other small European nations.

General Agreement on Tariffs and Trade

The twelfth session of the Contracting Parties to the General Agreement on Tariffs and Trade (GATT) was held in Geneva, October 17-November 30, 1957, under the chairmanshipof Shri L. K. Jha (India). According to the press, one of the most important aspects of the meeting was the discussion of the Treaty of Rome establishing the European Economic Community. A committee which had been created by a GATT ministerial meeting, October 28–30, 1957, to examine the relevant provisions of the treaty and of GATT and to consider methods of implementing the interrelated obligations which governments had assumed in the two instruments reported to the Contracting Parties that its four subgroups had examined the treaty with respect to tariffs, the use of quantitative restrictions for balance-of-payments reasons, trade in agricultural products, and the association of certain overseas countries and territories with the Community. Agreeing that the preliminary examination had been useful but that a number of important questions remained unsolved, the Contracting Parties decided that the Intersessional Committee, with representation from all contracting parties, should continue the work begun at the session. Following its discussion of the trade aspects of the treaty establishing the European Atomic Energy Community (Euratom) the Contracting Parties decided that further consideration could take place together with examination of the European Economic Community treaty. On another aspect of European economic integration, the Contracting Parties agreed that the Intersessional Committee should follow developments concerning the proposed European free trade area being negotiated in Paris.

Summaries of Addresses of Presidents of Sections: The Balance-of-Payments Problems of a European Free-Trade Area

Summaries of Addresses of Presidents of Sections: The Balance-of-Payments Problems of a European Free-Trade Area

North Atlantic Treaty Organization

At its meeting in Paris on December 13, 1956, the Council of the North Atlantic Treaty Organization (NATO), as was reported in April 1957, heard Mr. Selwyn Lloyd explain in general terms his “grand design” for Europe, which was later presented to the Council of Europe at Strasbourg. The principles of his grand design, according to Mr. Lloyd, were the maintenance of the unity of NATO and the expansion of European integration to include not only the federation of France, west Germany, Italy and the Benelux countries, but also such states as Austria, Yugoslavia, Switzerland, Sweden and Finland. Three elements were contained in the plan: the politico-strategic, the economic, and the parliamentary. In the politico-strategic field, Mr. Lloyd stated that development depended chiefly upon the development of NATO in the direction of closer consultation, as recommended by the Committee of Three of the Council of NATO. In the economic field, it was the view of the United Kingdom government that so far the Organization for European Economic Cooperation (OEEC) was the basic channel for the development of the closest economic relations, and that it would be desirable for the machinery which would be set up for the European free trade area to be part of OEEC. Mr. Lloyd proposed, in connection with parliamentary matters, that one assembly be established for the Council of Europe, Western European Union (WEU), NATO, OEEC, the European Coal and Steel Community (ECSC), Euratom, the Common Market, and the free trade area, as well as for any European organizations which might be established in the future.