The European Economic Community (1965)

[Music] a department store in the Federal Republic of Germany. Inside, a German secretary tries to choose one of the many imported French perfumes on sale. [Applause] [Applause] The perfume cost little more in this German store than it bought in France where it was manufactured. These Italian mechanics are working in a Dutch motorbike [Applause] factory. Here in the Netherlands, they earn good wages, most of which they send to Italy to support their families. So, here we have men working in a country other than their own. A French bank official checks the construction progress of a factory in Italy for which his bank is loaning capital [Applause] [Applause] funds. One country's investment capital is helping develop the economy of another. These have been examples of international cooperation among the peoples of the Netherlands, Belgium, Luxembourg, the Federal Republic of Germany, France, and Italy, stemming from the establishment of a unique institution, the European Economic Community. This is a customs union designed to achieve three economic goals. to eliminate tariffs, to permit free exchange of labor and capital, and to create a common market. Roughly speaking, a similar common market exists in the United States. Within the 50 political units of the United States, there is a single unified economy covering a wide range of cultures and economic activities. This unified economy allows people and services to pass freely among the states as well as manufactured goods and raw materials. This free trade permits specialization of production and results in lower prices which benefit all the people of the 50 United States. Before the establishment of the European Economic Community, these countries had had a long history of strong national rivalries which prevented broad economic cooperation. In 1914, these nationalist rivalries reached a peak with the outbreak of the First World War. Though many complex political issues underlay this war, some of the reasons for it were economic. For example, heavy industry, the basis of all modern economies, had been traditionally protected by the various national governments of Europe for generations. This protection usually took the form of high tariffs imposed on imported goods. Excluding competitive foreign goods was the goal of such economic programs. Under protectionist policies, production costs were high and markets limited as each nation sought to develop its own separate economy. So trade rivalries along with political and territorial rivalries increased the friction among European nations, especially during the deep depression that followed the first world war. During World War II, the economies of most European countries were stimulated again by defense production. This temporarily helped to overcome the economic stagnation into which Europe had fallen during the 1920s and 30s. But at the close of World War II, most of Western Europe lay in ruins. Especially hard hit had been the great centers of industry. How were the people of both Allied and Axis nations to rebuild their shattered economies? In 1947, George C. Marshall, Secretary of State, proposed a program in which American goods, food, clothing, and machinery would revitalize European economies. But after accepting initial aid, the new leaders of Western Europe, among them Conrad Adenhau of Western Germany and Robert Schumann of France, rejected old protectionist policies in favor of integrating the economies of their several nations. A start toward this was made when the coal and steel industries of six nations were integrated under the terms of the European Coal and Steel Community Treaty in 1951. This was a step toward the establishment of a cooperative European economy. The treaty stated that all tariffs and quotas were to be abolished gradually on the shipment of coal, iron ore, and steel between France, the Federal Republic of Germany, Italy, Belgium, Luxembourg, and the Netherlands. In other words, the six nations had entered into a customs union covering the basic materials of heavy industry. This particular customs union was encouragingly successful. Production rose in these industries and their resulted increased employment in related industries. Delighted with these economic results, the political leaders of the European coal and steel community nations in 1957 signed into effect an even more extensive customs union agreement, the European Economic Community. This agreement was the treaty of Rome. Under the terms of the treaty, the charter member nations of the community pledged themselves to achieve several economic goals between 1958 and 1970. By the end of this period, goods manufactured in any participating nation were to be shipped free of tariff and other trade barriers to any other participating nation. Goods imported from non-comm community nations were to be subject to a single common tariff. Also, industrial laborers and executives were to have complete freedom of movement among community nations as were itinerant agricultural workers. also relating to agricultural matters. A unified policy concerning production of food stuffs and price levels was to be worked out. By integrating the agricultural and industrial economies of the member nations, there would be increased efficiency of production. Increased efficiency, however, meant fewer workers would be needed in certain industries. To prevent widespread unemployment, an extensive job retraining program to be administered by the European Social Fund was provided for in the Treaty of Rome. Another measure to increase employment would be the establishment of the European Investment Bank to finance construction and enlargement of industrial plants, especially in economically backward regions. Within a few years of its formation, the success of the community could be measured. By the mid 1960s, more than 160 million consumers were part of the common market. These consumers had their choice of a great variety of goods at prices that growing numbers of them could afford to pay for employment rates and wages were rising. In 1960, for example, the total working population of the community numbered 70 million. Raising food gave employment to nearly 16 million. But more than 40 million, the vast majority of the community's people worked in industry. as in this cement plant in France. They worked at producing the basic materials of heavy industry. As in this smelting plant in the Federal Republic of Germany, they worked at making durable consumer goods, as in this plant, manufacturing washing machines in the Netherlands. They worked at producing soft goods, as in this textile plant in Italy. Service industries accounted for an additional 10 million jobs. Thousands were employed in the transportation industry, helping to move in a typical year more than $200 billion worth of goods. The combined rail facilities of the EEC nations resulted in the largest overland freight transport system in Western Europe. Their merchant fleets represented a capacity of nearly 21 million tons, rivaling the capacity of the United States merchant fleet. Total exports of the EEC nations in one recent year reached an astounding 19.5 billion dollars, nearly equaling the exports of the United States in the same year. Though EEC's economic statistics were impressive, they are even more understandable when translated into human terms. Higher standards of living, more employment, and better housing for an ever larger number of Europeans resulted from rapid economic growth. Many of the decisions which have facilitated this growth have stemmed from EEC offices located in Brussels, Belgium. This, for example, is a meeting of the common market commission, the executive authority which carries out the policies agreed on by the council of ministers representing the governments of the member nations of the EEC. This is a meeting of consultants to the European Atomic Energy Community called Uratum. Established in 1957, the Uratom Commission is concerned solely with developing nuclear energy for use in industry. For example, in the early 1960s, the Uratom Commission earmarked more than $215 million for nuclear research. Through Uratam's interest in the development of nuclear energy, and through the efforts of the EEC and the coal and steel community, levels of trade and production have been raised. By the middle 1960s, the people of the six countries comprising Uratom, the European Coal and Steel Community, and the European Economic Community had made tremendous economic strides. Yet, there were still problems with which EEC policymakers had to be concerned. Trade agreements had to be worked out with non-member nations. There were other problems, unifying the social security, monetary, and tax systems of the member nations. and unifying the agricultural production and price controls of the member nations. Yet the EEC had accomplished much in its first decade. French capital, for example, was being used to develop the economy, say, of southern Italy. Newly trained laborers from southern Italy and other less developed European areas were finding jobs in nations other than their own. German housewives were buying imported foods from member nations at reasonable cost and a Frenchman could buy a camera imported into France from the Federal Republic of Germany at a cost not much above the price he would pay for a comparable camera made in his own country. These are just four of many examples of increased trade among nations stimulated through the establishment of a wide-ranging customs union. By promoting economic cooperation, by lessening historic nationalistic rivalries and by working toward a still larger economic community of nations, the establishment of the EEC was a milestone in the history of its several members.