The European Union: Can It Compete?
The largest trading bloc in the world today is the EU, with 374 million inhabitants (versus 268 million in the U.S.) and a gross domestic product (GDP) of $8.5 trillion in 1997 (versus $7.7 trillion in the U.S.) 1
The EU is a true customs union, with supranational ("federalizing") institutions engaged in the massive undertaking of harmonizing European commercial law. The question is whether the EU will act like the trading bloc it is and have an equivalent influence on world trade. For the Union has continued to be rather enigmatic, pulling apart along national lines politically while integrating quite steadily commercially. Which of these two inapposite forces will win out? Is Europe on the verge of further integration (a single market, single currency and more)? Or is it on the verge of a meltdown (an à la carte program, with various members moving at variable speeds)? Most important, can Europe compete in the world marketplace, or will it turn protectionist and decline to cooperate with the U.S. in the process of trade globalization?
The modern conception of a unified Europe was hatched following World War II. It was meant to heal the age-old enmity between France and Germany and to rebuild the continent. Among its advocates were Jean Monet, Robert Schuman and even Winston Churchill (although he didn't include Britain). 2 The U.S. offered economic aid through the Marshall Plan, but only if the European states cooperated in the rebuilding process. 3 The offer was more than noblesse oblige, however. The U.S. wanted a strong buffer between itself and Stalin's emerging Soviet state and a rapid restoration of