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KVOS Special: The European Common Market and You

  • France, German Federal Republic, Italy, Luxembourg,
  • the Netherlands, like giant pieces of a jigsaw puzzle,
  • the six countries of Western Europe
  • that have formed the European Community are moving side
  • by side to make one big picture.
  • Frontiers are melting.
  • And eventually, there will be none at all.
  • Big changes are going on now.
  • What is this transformation that is taking place in Europe?
  • What will this transformation mean to Canada and the United
  • States?
  • What will it mean to businessmen and wage earners
  • in Washington state and British Columbia?
  • The European Common Market and you.
  • Now here is Andy Anderson.
  • Joseph C. Harsch has been a European correspondent
  • for the Christian Science Monitor for over 30 years.
  • He has been watching the development
  • of the European Common Market or more
  • properly called the European Economic Community
  • since it first stirred in the imaginations of Jean
  • Monnet and Paul Henri Spaak.
  • In Seattle recently, Mr. Harsch called the emergence
  • of the European Common Market the single most important world
  • event in his lifetime, the World Wars, the atom bomb,
  • and the race for space not withstanding.
  • In it, he saw a great promise for a Europe
  • strong both economically and politically,
  • a Europe that could shoulder some
  • of the burdens of the free world, which had been resting
  • heavily on the United States.
  • Newscasts filled with talk of Berlin and disarmament
  • are neglecting the big story in his judgment.
  • Tonight, Channel 12 spotlights the Common Market
  • in an attempt to learn what it is
  • and what it means to you and to me.
  • The problems of Canada created by the current Common Market
  • situation are twofold.
  • If Britain enters the common market,
  • as it appears at this time that she will,
  • Canada will not only face the newly created external barriers
  • of the European countries as the United States will,
  • but she also will lose the preferential treatment
  • in trading with Great Britain that has normally been afforded
  • the Commonwealth countries.
  • A good many Canadians have asked the question we recently
  • put to Mr. W.K. Ward, the British trade commissioner
  • in Vancouver.
  • Why is Great Britain joining the European Economic community?
  • Well, I think the short answer to that, Al,
  • is that we've come to a conclusion
  • that this is the best thing we can do in our own interest
  • and in Europe's interest and generally
  • in the interests of the world.
  • We think that a larger community of European nations working
  • together economically is going to lead to a stronger Europe.
  • And we think that in these days when
  • we've got to have regard to the communist empire on our flanks
  • and our responsibilities in the world
  • that a strong Europe is a good thing.
  • From the standpoint of Britain particularly, of course,
  • it would be extremely difficult for us
  • to view with comfort a market of this size,
  • of 180 millions, the fastest growing market in the world,
  • and ourselves detached from it.
  • To comment on this and discuss the importance of the EEC
  • to Canada and the United States, here is Dr. James Robb.
  • The economic expansion of the European Common Market has been
  • much more rapid than Britain's.
  • With the expansion of business, unemployment
  • in all the Common Market countries
  • has been substantially reduced.
  • The foreign trade of the European Common Market
  • countries has been increasing more rapidly each year
  • since the formation of the Common Market.
  • In fact, Britain's exports to the Common Market
  • increased about 20% last year.
  • The rate of growth of trade between Common Market countries
  • has doubled since the formation of the Common Market.
  • The European Common Market has an ever increasing need
  • for a wide range of consumer and industrial products.
  • However, joining the European Common Market
  • does create a number of significant problems
  • for Britain.
  • One of the principal problems it creates
  • is the future of the Commonwealth.
  • Mr. Ward makes these observations
  • about the Commonwealth.
  • Would it be fair to say that by Great Britain joining
  • the European Economic Community, it's
  • deserving its children, deserting the Commonwealth?
  • Oh, not at all.
  • I think quite the contrary.
  • You talk of Britain joining the Economic Community.
  • But of course, the situation is that Britain
  • has applied to join and has applied
  • for the opening of negotiations on the conditions of joining.
  • And one of our major considerations
  • here, a great worry to us is how we
  • can reconcile to the best mutual advantage, the best
  • interests of the Commonwealth of Britain and of Europe.
  • And again, it must be true that looked at generally,
  • a strong Britain is a good thing for the Commonwealth.
  • And a weak Britain is a bad thing for the Commonwealth.
  • The Commonwealth should benefit from the increased strength,
  • which we hope Britain will acquire by joining
  • in this European organization.
  • The paramount problem created by Britain's joining
  • the Common Market creates for the Commonwealth
  • is the possible loss of imperial preferences.
  • This would subject Commonwealth countries
  • to the common external tariff of the Common Market.
  • While at the same time, the European countries
  • would have free access into the British market.
  • Britain has, over the years, reduced the amount
  • of preference that Commonwealth countries
  • enjoy over non-Commonwealth countries.
  • Today, only about half of Britain's imports
  • from Commonwealth countries enjoy tariff preferences.
  • Furthermore, the amount of preference for specific items
  • has been reduced over the years.
  • On the other side of the coin, less than half
  • of Britain's exports to Commonwealth countries
  • enjoy preferred treatment.
  • Even Canada has reduced the amount
  • of preferential treatment for British exports
  • throughout the years.
  • The gains to the Commonwealth far exceed the short term
  • losses, in my opinion.
  • First, joining the Common Market will put new life into Britain.
  • It will make her prosper and grow.
  • A healthy Britain is a better market
  • to the Commonwealth trade than an economically stagnant
  • Britain.
  • Second, Britain as a member of the Common Market
  • will represent the Commonwealth within the Common Market.
  • Third, Britain's negotiations with the Common Market
  • will bring many trade preferences
  • for the Commonwealth countries that they would not be
  • able to achieve by themselves.
  • Later, Mr. Ward was asked about his impressions
  • on Canadian business opinion on the Common Market.
  • Is it correct to assume that British business in general
  • unlike, or, let me correct that, Canadian business in general
  • unlike the Canadian government is
  • favorably disposed to Britain's bid to the EEC?
  • Well, I think that's really a question for Canadian business
  • itself to answer.
  • And I think that as far as the West is concerned,
  • with which I'm more familiar, some of the leading industries
  • have already answered it.
  • The lumber industry, for example,
  • I believe the fishing industry have come out
  • loud and clear and said that they think
  • that an association of Britain with the Common Market
  • would be a good thing from their point of view
  • because they too are taking the view that a stronger
  • Britain, a better, more prosperous Britain
  • means better business opportunities for them.
  • As far as the East is concerned, as I say,
  • I'm not at all so clear.
  • But I can see that the problem there
  • is more complex because of the greater interest of the East
  • in the shipment of manufactured goods.
  • And there, a great deal will depend
  • partly on the tariff situation that emerges,
  • the situation with the common tariff, and partly also,
  • of course, on the nature of the goods
  • and the competitiveness of the goods that the East of Canada
  • produces in the European market.
  • Canadian business looks at the European Common Market
  • with mixed reactions.
  • Those industries involved in manufacturing look
  • at the European Common Market somewhat apprehensively.
  • On the other hand, the natural resource industries
  • see new markets created by the vast economic expansion
  • of the Common Market.
  • Since the British Columbia economy is based primarily
  • upon natural resources, the outlook for BC products
  • is generally excellent.
  • When considering manufactured goods,
  • the impact of the European common market
  • on Canadian business is somewhat clouded.
  • The external tariff of the Common Market
  • will undoubtedly hurt some Canadian manufacturers.
  • But it will have little or no effect on others.
  • One thing is certain.
  • The European Common Market offers
  • unparalleled opportunities to Canadian manufacturers
  • who can tailor their goods for the European market.
  • The Canadian agricultural industry,
  • however, is not generally favored
  • by the European Common Market.
  • Although the European Common Market
  • seeks to expand trade in manufactured goods
  • and in raw materials, it seeks to protect home markets
  • for the farmers of the European Common Market.
  • Canadian wheat is seriously affected.
  • However, with this commodity, there is a note of optimism.
  • Canadian wheat is a type demanded by European millers.
  • Although the European Common Market
  • may cause some short run hardships
  • for some Canadian businesses, on the whole,
  • I feel the European Common Market
  • will have a stimulating effect on the Canadian economy.
  • Of all Canada's provinces, British Columbia
  • has more to gain from the expansion
  • of the European Common Market than any other.
  • Mr. Ward was asked his opinion on the future direction
  • of Canadian foreign trade.
  • Will Britain's entry into the EEC
  • lead Canada to closer economic ties with the United States?
  • Ah, well, that really is a question,
  • I think, for the Canadian government.
  • And I do think that the Canadian government itself would
  • find it impossible to answer at this stage.
  • Because as I said earlier, Britain
  • is at the stage of negotiating with the Common Market
  • countries, the European Community countries,
  • as I prefer to call them, and we don't know any more
  • than Canada knows at this stage what
  • the outcome of these negotiations will be.
  • One idea which has been advanced by some people for greater US
  • Canadian trade is the establishment
  • of a free trade area between Washtenaw
  • County and the Vancouver area.
  • Reg Rose, the general manager of the Vancouver Board of Trade,
  • comments on this proposal.
  • Mr. Rose, what is your attitude toward free trade
  • between Canada and the United States?
  • Well, any development that will help
  • in the advancement of trade, whether it
  • be international or multilateral trade, is to the good.
  • We in British Columbia believe in reciprocal trade
  • because we export so greatly so many of our commodities.
  • And we recognize that there must be a buy
  • as well as sell relationship when we're talking
  • about international trade.
  • An idea has been suggested that a free trade area be set up
  • along the US Canadian border possibly Whatcom County
  • and the corresponding area in British Columbia, which
  • would allow total free trade between the two countries,
  • but only within this area.
  • And the idea would be to use this as an experiment, a Guinea
  • pig, if you will, toward eventual elimination of all
  • trade barriers between the United States and Canada.
  • What do you think of that idea?
  • Well, I think it would be administratively difficult
  • if not federally from the point of view
  • of the federal government impossible, certainly
  • at this point, impractical.
  • Because obviously, we must deal with the country as a whole.
  • What would happen about the final destination of the goods
  • coming in allegedly to British Columbia,
  • but being fanned out across the country?
  • Or alternatively, what goods going
  • into Washington, which could be fanned out through the country?
  • There is no control over this because your laws,
  • as I understand them, as in Canada,
  • prohibit the setting up of tariff barriers between states
  • on your part or provinces on our part.
  • And the final destination couldn't be controlled.
  • Therefore, I think the administrative problem alone
  • would have a bearing in this matter.
  • In other words, what would happen
  • is everybody would funnel all of their goods
  • through this one little open door in the trade barrier?
  • Well, they might not.
  • But they could unless there were certain restrictions, which
  • at the moment, I can't see being put into effect in Canada.
  • Also asked to comment on this proposal
  • was Robert Rose, the Washington State director
  • of the Department of Commerce and Economic Development.
  • Well, it would appear to me that the most reasonable approach
  • would be to gear this to a reasonably long range
  • program, perhaps directed towards a gradual lowering
  • of tariffs, perhaps incorporating a lowering
  • or elimination of tariff on individual commodity items.
  • Whichever way it goes, I think that this is something
  • that we don't do overnight.
  • I think that it should be geared to a reasonable period of time
  • in order to allow us to make the necessary adjustments.
  • And probably not then restricted to individual geographical
  • areas along the border?
  • Well, again, it would seem to me at least that any attempt
  • to do this on a segmented border type of approach
  • would be highly impractical.
  • Consider for a moment the reduction
  • of trade barriers between the United States and Canada.
  • Any program of trade liberalization
  • and tariff reduction must be carefully planned and executed.
  • Both governments must work together
  • in order to reduce the shock of lifting trade barriers
  • on domestic industries.
  • Trade is a two way street.
  • It involves a give and take.
  • No nation can receive all favorable concessions
  • and give up nothing.
  • A nation's government must first be concerned with its economy
  • as a whole and secondly with the problems faced
  • by specific domestic industries from foreign competition.
  • Robert Rose was asked to comment on the effect
  • of the European Common Market on Washington state.
  • What do you think the long term effects
  • will be for the European Common Market on the economy
  • of Washington state?
  • Ultimately, and over the long haul, nothing but good.
  • I think that this is a direction in which we in the West
  • must move.
  • I would say this, that perhaps during a transition
  • period while these adjustments, these eliminations
  • are being made, we do have to exercise considerable care,
  • because inevitably, it would appear to me at least,
  • some people are going to be hurt or at least run
  • the risk of being hurt.
  • And I would certainly hope that in developing this program,
  • that the government gives considerable attention
  • to how best carry these types of industries or activities
  • through this transition period.
  • What are some of the industries in the Northwest Washington
  • area that might possibly feel a pinch initially?
  • Oh, quickly, one, our leading industry, I think, timber.
  • In order to better understand the influence
  • of the European Common Market, one
  • must consider the importance of Washington's export trade.
  • Washington exports more per capita
  • than any other state in the United States.
  • In 1960, Washington's exports of manufactured goods
  • ranked ninth in the United States.
  • Three principal Washington exports and manufactured goods
  • were, first, transportation equipment.
  • The export of this type of equipment
  • ranked third in the United States.
  • Second, paper and allied products, Washington
  • leads the nation in the export of these products.
  • Third, lumber and wood products, the export of these products
  • ranked second in the United States.
  • Washington's agricultural industry
  • also has a substantial stake in world markets.
  • $0.21 out of each dollar's worth of farm products
  • sold by Washington farmers came from exports.
  • Thus, one can see international trade is of major importance
  • to Washington state.
  • The countries of the European Common Market
  • are some of the principal customers
  • for Washington exports.
  • The opportunities created by the European Common Market
  • are highly favorable to Washington state business.
  • Some further meaning of the European Common Market
  • and its effect on one of Washington's export industries
  • is provided by Mr. Lawson Turcotte, president of Puget
  • Sound Pulp and Timber Company.
  • The European Common Market now consists
  • of six countries, Belgium, France, Italy, West Germany,
  • the Netherlands, and one other.
  • Luxembourg.
  • Luxembourg.
  • And they have started in 1957 to reduce
  • all their internal tariffs.
  • By 1961, they have reduced them 40%.
  • By 1967, they will have eliminated all tariffs, which
  • will put them in the same shape as the various states
  • of the United States.
  • Now the problem here is that the Common Market does not
  • affect too much the pulp and paper industry because they're
  • not a producer.
  • But if the Scandinavian countries, Sweden and Norway
  • and Great Britain, for that matter,
  • enter the Common Market, this will change the picture
  • somewhat.
  • Won't it?
  • That will change the situation entirely.
  • Because if we have the Scandinavian countries,
  • such as Sweden and Norway, I don't think Finland will join,
  • and Sweden and Norway get into the Common Market,
  • then they will join the tariff free group.
  • And they will have external tariffs
  • against the rest of the world.
  • And with the large production of Sweden and Norway
  • in pulp and paper, it's possible that it
  • could harm our exports greatly.
  • This is prepared by the American Paper and Pulp Association
  • and shows the very complicated thing
  • that this Common Market is and what they are going
  • to suggest at the hearings.
  • In other words, give advice to the people
  • who are going to make these deals on the pulp, paper,
  • and paper board.
  • This is the copy of the policy statement
  • in which Mr. Turcotte referred.
  • It's typical of interest shown by both businesses, trade
  • associations in world trade.
  • Mr. Turcotte comments further on the European Common Market.
  • Turning to the picture economically for the nation
  • as a whole, you're a member of the board
  • of directors of the National Association of Manufacturers.
  • What is the attitude of American business
  • generally toward the European Common Market?
  • Well, I would say, in the National Association
  • of Manufacturers, there are many very divergent views,
  • depending which industry the members belongs to.
  • But on the whole, they are watching it.
  • They are studying it.
  • They will probably make representations
  • at the hearings.
  • And it's a very complicated question for one association
  • to represent the whole United States
  • in a very controversial subject at this time.
  • They're taking a wait and see attitude?
  • Wait and see, yeah.
  • But they will be participating in the upcoming
  • Senate and congressional hearings on the president's
  • recommendations?
  • Yes.
  • I see.
  • Thank you very much.
  • In general, US business has favored the creation
  • of the European Common Market.
  • But this feeling has not been unanimous.
  • One factor which indicates the optimism of US business
  • in the future success of the European common market
  • is the tremendous increase in US business investment
  • in this area.
  • In the last five years, the investment
  • of US business in manufacturing facilities in Western Europe
  • has doubled.
  • Another factor which shows the importance
  • of the European Common Market is the growth of US export
  • to this area.
  • From 1953 to 1960, US exports to all countries increased by 60%.
  • Whereas US exports to the European Common Market
  • countries increased by 130%.
  • As a comparison, during the same period, US exports to Canada
  • increased by only 2%.
  • Recently, Washington state senior Senator Warren G.
  • Magnuson, the chairman of the United States Senate Committee
  • on Interstate and Foreign Commerce,
  • said this about the European Common Market.
  • One of the major problems before this Congress, of course,
  • is the whole matter of world trade.
  • This has been greatly affected in our future
  • in the trade of the world by the formation
  • of the Common Market in Europe.
  • The Common Market's composed of nations
  • that trade among themselves without tariffs
  • or without discriminations, a great deal
  • like we trade between states.
  • This poses a great problem for these United States
  • because we have been historically traders
  • unilaterally with a given country and a given
  • commodity and a given product.
  • Now for instance, if we want to ship, say, our fruit
  • to the United Kingdom if they should join the Common Market,
  • they could not agree to accept it under any tariff terms
  • unless the rest of the countries agreed to this.
  • So we either have to get in to the Common Market,
  • halfway in or all in, or work out some arrangements, which
  • we may be able to work out with all the countries involved.
  • The Senate is in the process of beginning hearings.
  • The administration has sent up a bill.
  • And it's going to really pose a great deal of discussion,
  • controversy, but I think we'll probably
  • come up with a good trade program
  • giving the president much more authority
  • to be flexible in decisions quick, make them quick,
  • and raise and lower tariffs to contend
  • with this problem in the world.
  • In the last few weeks, the United States
  • announced that it had successfully concluded a trade
  • agreement with the European Common Market, which
  • lowered mutually the tariff rates on about 1,500 items.
  • These negotiations were the first negotiations
  • by any country with the European Common Market.
  • The results demonstrate the willingness
  • of the Common Market to liberalize terms of trade
  • with outside nations.
  • Mr. Chastanet, a noted French journalist
  • and author on the European Common Market,
  • makes these observations.
  • What will be the European Economic Community's attitude
  • toward nonmembers, particularly the United States and Canada?
  • Well, I think that to nonmembers, the European
  • Economic Community's attitude will be
  • and is a most liberal one.
  • The common external tariff, that is the custom duties applied
  • to goods coming from outside, is already low.
  • And it was quite recently, quite simply
  • decided to lower it by a further 20% in favor of the United
  • States and also of Canada.
  • It must be emphasized that the Common Market is in no way
  • a protectionist device set up against the outer world.
  • On the contrary, one of the chief aims
  • is to prove that a sound economic organization
  • on the part of the free world is beneficial to the whole.
  • In conclusion, it can be said that the opportunities created
  • by the formation of the European Common Market
  • are highly favorable to both the United States and Canada.
  • And they are especially favorable to British Columbia
  • and to Washington state.
  • Although the original external tariff
  • of the European Common Market creates some problems
  • for both Canadian and US business,
  • the recent tariff concessions by the European Common Market
  • are highly encouraging.
  • This action by the European Common Market
  • clearly indicates that the European Common Market
  • is outward looking, and it does seek
  • to expand world trade in addition
  • to increasing its own internal trade.
  • As we began this program, we talked of Joseph C. Harsch
  • and his optimistic, almost jubilant analysis
  • of the importance of the European common Market.
  • But Mr. Harsh and others have also
  • commented on the more sober aspects, those aspects that
  • reflect the problems which may be created for you
  • and me as citizens of Canada and the United States,
  • as businessmen, and wage earners.
  • It has been said that it is dangerous to look upon
  • the European Common Market as essentially a strong political
  • tool of the free world in its conflict with the Iron Curtain
  • countries, that the European Common Market is more
  • pro-Europe than it is anti-communist,
  • that we cannot predict with exactness what its stand will
  • be in the Cold War.
  • But I think we can predict its general attitude.
  • In doing so, one comes to the conclusion
  • that the economic progress, the raised standard of living,
  • and the tremendous economic power of Western Europe
  • growing out of the Common Market will not
  • lead the peoples and the governments of Western Europe
  • to a position that is at all comforting to the Kremlin.
  • But if Western Europe is to become
  • an effective anti-communist weapon as well
  • as a pro-Europe movement, there are many pitfalls
  • to be avoided.
  • First, the birth of a political unity out of an economic unity
  • is fraught with labor pains.
  • If this development were to become too divisive,
  • it could endanger rather than strengthen
  • economic common security.
  • And secondly, the rise of Europe as an economic competitor
  • to the United States and Canada is
  • fertile ground for dissension between the two allies,
  • a pregnant place for the communists
  • to attempt to drive a wedge between those essentially
  • compatible and cooperative groups of nations.
  • Some believe that Russia's new ambassador to Washington,
  • Anatoly Dobrynin, has as one of his jobs
  • the subtle promulgation of the idea that the Soviet
  • Union and the United States have a common need
  • to protect themselves from the effects of Europe's
  • new economic union.
  • The question is simply this, are the United States and Canada
  • to become partners or rivals of the European Economic
  • Community?
  • Will we cooperate while competing,
  • or compete while fighting Europe tooth and nail?
  • The policies are yet to be decided.
  • Before Canada can develop a firm policy,
  • it must know what advantages and disadvantages will
  • accrue to it after Britain's negotiations with the ECM
  • are completed.
  • In the United States, President Kennedy, the Congress,
  • and members of the business community
  • are at work right now developing points
  • of view, recommendations, policies, and alternative roads
  • to a solution of the problem.
  • When sifted and surveyed, these will be molded
  • into a definitive US policy.
  • It would appear that whatever policy our countries adopt,
  • there will be some short range pain, problems,
  • which will in the next five years, cause cries of anguish
  • from certain quarters.
  • What the long range future holds for Canada and the United
  • States generally, and what the next 10 years
  • holds for Washington State and British Columbia will
  • be determined, we believe, by whether we
  • choose to be partners or rivals of the Common Market.
  • Europe is certainly on the move.
  • Nothing we can do will stop it.
  • But upon how we react to it will depend
  • the final outcome of the European Common Markets
  • and you.
  • This program is produced and directed by Al Swift.
  • Editorial advisor was Dr. Gerald V. Egerer.
  • Your narrator was Andy Anderson.
  • This program was produced by the Channel 12
  • Department of Public Affairs.
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