The New Customs Unions

  • W. M. Scammell
Chapter

Abstract

In 1957 the signing of the Treaty of Rome by six European nations1 was probably the most important single economic event in the period spanned by this book. It marked a new stage in international co-operation. It redistributed economic power and influence, giving to the group a total industrial output matching that of the United States and exceeding that of the Soviet Union, and a foreign trade with other countries greater than any other power. It gave potential for growth to an area already registering at that time, in its constituent countries, the fastest economic growth in the world. It held remote but exciting promise of a single European super-power which would replace the national mercantilism of four centuries.

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References

  1. 2.
    An early approach to customs-union theory was to regard such unions as a step along the road to general free trade. A second-best approach is one in which free trade within country groups is at least superior to autarky but inferior to general free trade. A more modern view of customs-unions theory stresses the discrimination inherent in such an arrangement and concerns itself with the changes in economic relationships which result from discrimination, with, for example, changes in production and consumption patterns, the terms of trade, the balance of payments and the rate of growth. There are two types of discrimination in tariff theory: commodity discrimination, where different tariff rates are applied to different commodities, and country discrimination, where different tariff rates are applied to the same commodity according to its country of origin. Customs-union theory deals with problems raised by the latter type of discrimination. It is defined by Lipsey, a leading writer in the fiéld, as ‘that branch of tariff theory which deals with the effects of geographically discriminatory changes in trade barriers’. See R. G. Lipsey, ‘The Theory of Customs Unions: A General Survey’, Economic Journal (Sep 1960) pp. 498–513.Google Scholar
  2. 8.
    A huge literature already exists on this subject. Readers seeking a point of entry to this literature might consult: F. B. Jensen and I. Walter, The Common Market: Economic Integration in Europe ( Philadelphia: Lippincott, 1965 );Google Scholar
  3. L. B. Krause (ed.), The Common Market: Progress and Controversy (Englewood Cliffs, N.J.: Prentice-Hall, 1964); Treaty Establishing the European Atomic Energy Community [Euratom] and the Common Market ( Brussels: Interior Committee for the Common Market and Euratom, 1957 );Google Scholar
  4. Political and Economic Planning (PEP), European Organisations ( London: Allen & Unwin, 1959 ).Google Scholar
  5. A good general and up-to-date book is Dennis Swann’s The Economics of the Common Market (London: Penguin Books, 4th ed., 1978).Google Scholar

Copyright information

© W. M. Scammell 1983

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