The Economic Principles of European Integration

By Stephen Frank Overturf | Go to book overview

CHAPTER 8
Trade Relations:
Developing Countries

The trade relations of the EC with developing economies (LDCs) around the world have generally consisted of the EC providing aid or preferential trading arrangements to specific groups of countries, but always with an eye on the cost of such aid and with consideration of any potential impact on protected industries within the Community.

The initial situation of the Six upon formation of the EEC was that several member countries had ties to Third World countries that they were reluctant to sever. France and Belgium, more explicitly, had colonies in Africa that they could have been forced to treat as any other country with regard to trade if the concept of a customs union were applied strictly (that is, application of a common external tariff to all countries outside the union). In addition, France felt that the newly created organization should share some of the costs of direct aid that it bore for these colonies. In fact, it felt so strongly about these issues that it made some sort of preferential arrangement a precondition for its membership in the EEC.

France was not alone, however, in having preferential arrangements with African countries, for both West Germany and Italy had special trading relationships covering several tropical products, especially coffee and bananas.

All of the countries shared a concern that any agreement should not be too costly or adversely affect protected industries within the Community. Of special concern was the importation of temperate foodstuffs (i.e., grains, rice, etc.), since these would compete directly with domestic production of the same commodities (which were to be protected by the CAP).

What resulted was the establishment of the Associated Territories, primarily those same French dependencies in Africa. "Association" with the Community carried with it certain benefits,

-89-

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The Economic Principles of European Integration
Table of contents

Table of contents

  • Title Page iii
  • Contents vii
  • Preface xi
  • Acknowledgments xiii
  • Chapter 1 History of European Economic Integration 1
  • Chapter 2 Community Institutions 15
  • Chapter3 Customs Union Theory 21
  • Chapter 4 Factor Mobility and Tax Harmonization 35
  • Chapter 5 Monetary Union 46
  • Conclusion 59
  • Chapter 6 Industrial Policy 61
  • Chapter 7 Common Agricultural Policy 75
  • Conclusion 87
  • Chapter 8 Trade Relations: Developing Countries 89
  • Conclusion 101
  • Chapter 9 Trade Relations: More Developed Countries 102
  • Chapter 10 Regional Policy 118
  • Chapter 11 Social Policy 134
  • Conclusion 144
  • Appendix Treaty Establishing the European Economic Community 147
  • Bibliography 167
  • Index 169
  • About the Author 173
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