TARIFFS AND INTRA-EUROPEAN TRADE
THE OEEC's trade liberalization program concentrated on quotas. As these were peeled away, tariffs reasserted their importance as barriers to intra-European trade. The countries of Western Europe with relatively low tariffs pressed for a reduction of duties by the high-tariff countries. Attempts to reach an understanding through the General Agreement on Tariffs and Trade had not produced results by the fall of 1951. Similarly, no conclusive action had been taken on the proposal that Western Europe become a preferential tariff area, an idea frequently suggested by some advocates of European economic cooperation and formally put before the OEEC by the Italian government in June 1950.
This chapter describes these developments and discusses some of the economic and political issues they involve.
"The substance of . . . integration," said Paul Hoffman in his "integration speech," "would be the formation of a single large market within which quantitative restrictions on the movement of goods, monetary barriers to the flow of payments and, eventually, all tariffs are permanently swept away." Tariffs came last. This did not mean that nothing should be done about them until other trade barriers had been completely removed, but it expressed the almost universal belief, carried out in the OEEC's liberalization and payments agreements, that the way to start was by removing quotas and exchange restrictions.
There was a good bit of justification for this approach.