V The United Europe Movement

V The United Europe Movement An Appeal to Winston Churchill. The numerous movements for European unification which, immediately after the war, arose all over Europe enjoyed lively public interest and support. But no real progress toward a European Union could be made as long as politicians and statesmen failed to support the movements and promote the plans of unification. In order, therefore, to force an actual realization of European unification, or at least of its initial steps, several leaders of the private movements appealed to Winston Churchill— the uncontested political leader in postwar Europe—to take part in the European movement. Having Churchill's support, they thought, would give the unification movement a real chance of success. Churchill Urges Europe to Unite. As long as Churchill was in power, he refrained from giving support to the unification movements. But at Fulton, Missouri, in March 1946, when he was no longer Prime Minister of Great Britain, for the first time he called the world's attention to the continuing expansion of Soviet Russia in Europe and to the spreading of communism all over the world.

He attacked Soviet Russia for enslaving the Eastern European countries and for making them satellites of communist Russia. A few months later, in September 1946, he made a famous speech at the University of Zurich, Switzerland, in which he appealed to the nations of Europe to unite against the rising threat from communist dictatorship. Churchill then declared that he himself would take part henceforth in the work for European unification. In May 1947, he repeated his call for unity before 40,000 listeners in London with the appeal to France and Germany to assume the initiative and leadership. "United Europe Movement" Organized. Following this, Churchill founded in Great Britain an organization, "the United Europe 114 THE UNITED EUROPE MOVEMENT 115 Movement," whose goal is to fight for a realization of European unification through mass education and create a popular unity movement. In this organization, members of all different political groups and walks of life—conservatives, liberals, socialists, Protestants, Catholics, etc.—are represented. Churchill himself assumed the presidency of the executive committee of the movement.

The Unification Desired. Although Churchill has never expressly stated which countries should unite, we may infer from remarks of eminent followers of the movement that France, Italy, Austria, Germany, Spain, Portugal, Belgium, Denmark, Holland, Switzerland, and the Scandinavian countries should unite. As compared with most other European movements which advocate "federalism" of some form or another, the Churchill movement advocates a "unitary" government with respect to essential government functions. Through a progressive creation of central organs, like those superficially designed and quickly established by the Allies during the war, a "United States of Europe" which is able to defend itself against communist Russia should be constructed. A uniform command with regard to national resources and energy and other essential functions of national life should be established and constitute the framework of an empiric union. It is in this sense that the United Europe Movement is unitary.

In all other respects unessential for European defense, the movement recommends the creation of a "Confederation" or a "European Commonwealth." The motives which may induce the European nations to join this confederation need not be identical. Some nations are urged to join for commercial reasons, such as the benefit of a tariff union or a system of commercial preferences; others may join for reasons of defense or for a combination of other reasons. The large area of economic collaboration would allow the greatest possible freedom of trade and enhance the economic prosperity of the nations. Cultural ties and an exchange of scientific information should also be developed. But above all, a consultation and discussion of all problems of mutual interest should reflect and constitute the fundamental solidarity and unity of the nations of Europe.1 The Organization. The work of the United Europe organization consists of propaganda through public rallies, publication of articles and reports, and, finally, study of the problems which the eventual 1 L. de Sainte-Lorette, L'Integration Economique de I'Europe, Paris, 1953, p. 302; E. Bonnefous, L'Europe face a son destin, Paris, 1952; O. Philip, Le Probleme de I'Union Europeenne, Paris, 1950; John Goormaghtigh, European Integration, Carnegie Endowment for International Peace, New York, 1953.

116 DOCTRINES AND PLANS OF UNIFICATION realization of the Union would create. It invites all eminent personalities who agree on the necessity of unification of Western Europe to organize and communicate with each other through the organization of the movement. The objective of the Churchill movement is clearly expressed in the first declaration of the executive committee. It reads: "This problem (of unification) is so urgent that if the governments find it impossible to undertake its realization at present, the people of good will in all countries should unite before it is too late. Europe must unite if she wants to preserve her civilization." Sir Samuel Hoare, an eminent adherent of the Movement, expressed a similar idea while pointing at the present state of European disunity. "The present position on the Continent," he says, "is indefensible—separate zones, impassable frontiers, exchange control, no freedom of movement, pernicious ideas of autarky and many more obstacles stifling European civilization. . . ." 2 The United Europe Movement constitutes the nucleus of the movement for European unification in Great Britain. It collaborates closely with other movements on the Continent, especially the "French Council for a United Europe," which was organized on the initiative of General de Gaulle who also appealed for European unity against the rising threat of communist Russia shortly after Churchill had taken his stand.

CRITIQUE British Commonwealth the Model of Unification. The United Europe Movement, in the opinion of this author, advocates a timely copy of the system of consultation and cooperation in the British Commonwealth. This pattern of cooperation, in the eyes of the fathers of the United Europe Movement and its British adherents, represents the most effective effort for the regulation of relations among numerous nations scattered over all parts of the world, comprising different ethnic groups, and having diverse interests. The machinery of Commonwealth consultation and cooperation is an empiric organization which has developed over a long time and which evidenced a striking absence of any planning. Because of its complex nature and its long process of development, statements about it are scattered and comprehensive evaluations are rare. In spite of the apparently haphazard and complex appearance which the Commonwealth pattern offers to the outside observer, there reappear continuously, however, three threads that bind the member 2 Quoted by Alexander Galin, "Europe: Split or United?" in Foreign Affairs, An American Quarterly Review, Vol. 25, No. 3, April 1947, p. 417.

THE UNITED EUROPE MOVEMENT 117 nations of the Commonwealth together. They are: (1) The Crown and the Common Law; (2) Sovereign Equality; (3) The Principle of Consent.3 The last two threads are obviously also those which the fathers of the "United Europe Movement" envisage for a unification of Europe. The belief in the realizability of European unification on grounds of these principles reflects the idea that these threads are sufficient for the creation of a "United States of Europe." Absence of Genuine Liberalism. However, another fundamental principle, as well as prerequisite, for interstate unification is consistently overlooked by the advocates of the United Europe Movement. The absence of this principle not only renders a realization of the ambitious plans of European unification unfeasible, but also assures the ultimate dissolution and destruction of the British Commonwealth. This prerequisite is the economic freedom of the individual to plan and act according to his own motive and purpose.

Negatively expressed, it is the absence of nationalist, socialist, or interventionist principles of central planning by the member states. The System of "Trade Preferences" Breaches International Unity and Cooperation. Modern policies, however, are policies of central planning for purposes of protection, national welfare, full employment, social and economic justice, and other collectivist principles. As has been shown repeatedly in other sections of this work,4 a unification—and especially a tariff union—under the conditions of the foregoing principles is unrealizable. We may, therefore, content ourselves with proving that the specific feature of Commonwealth economic cooperation, the "system of trade preferences," which the United Europe Movement is also recommending to the free nations of Europe, is a means of economic nationalism and as such is breaching international unity and cooperation. It is a system designed for the detriment of outside countries and the temporary advantage of privileged groups of producers which it protects from foreign competition. Furthermore, the very ideas which gave birth to the system of Commonwealth preference must ultimately bring about the destruction of the Commonwealth rather than the strength desired and intended.

On the History of Commonwealth Cooperation. We may illustrate our contentions by briefly outlining the development of the pattern of Commonwealth cooperation. The old mercantile system of preferential duties upon British goods imported by the Colonies, which had been in effect for more than two centuries, was aban3 Heather Joan Harvey, The British Commonwealth, New York, 1953, p. 4 et seq. 4 See especially p. 69 et seq.

118 DOCTRINES AND PLANS OF UNIFICATION doned in 1855 when Great Britain and her Colonies adopted an "open-door policy." That is to say, British and foreign traders henceforth were treated alike. This liberal policy was expressly stated in treaties with Germany and Belgium and was later extended to other countries by the operation of the "most-favored-nation clause." The first minor infringements of the open-door principle were committed by the Colonies in favor of Great Britain in the years before the First World War. Towards the end of the war some substantial export duties on certain raw materials were levied by the Colonies. These levies, from which Great Britain was exempt, were mainly directed at Germany which used to import those raw materials. In 1922, when most Colonies had full sovereignty as to foreign trade policies, a preferential tariff system was adopted by various Colonies. This tariff system followed the old objectives of "protecting infant industries" in the process of growth to avoid "excessive" and "unfair" competition by foreign producers.

In the Dominions the first practical step towards Empire preference was made by Canada in 1897. Products from Great Britain were admitted at reduced tariff rates. Later, goods from other Empire countries were also included in this preference. Several other Dominions soon followed the Canadian example and introduced preferential rates in their tariffs. New Zealand followed suit in 1903, South Africa in 1904, and Australia in 1907. The preference margin amounted to from 5 to 15 per cent. In a few cases no preference was given to Empire producers because of their bothersome competition.5 In the United Kingdom tariff preferences for Empire producers followed very tardily. In the Tariff Act of 1919 the Conservative government introduced preference provisions which provided for a preferential reduction of one-sixth from the full tariff rates. But this preference was still designed mainly for fiscal reasons, so that the most important imports remained duty-free, and the protective character of the preference provisions was relatively insignificant.

In 1921, the Safeguarding of Industries Act imposed new tariff duties from which Empire imports enjoyed a preferential reduction of one-third of the full rate. For a short period in the Mid-Twenties, the policy of preferential tariff duties was partially reversed by the Labour government in power, but was resumed by the Conservative government in 1926. Preferential reductions were then extended to all dutiable imports.6 5 E. B. McGuire, The British Tariff System, London, 1939, pp. 257, 258. 6 Ibid., pp. 258-261.

THE UNITED EUROPE MOVEMENT 119 The last remnants of the British liberal trade policy, finally, were systematically abandoned at the Ottawa Imperial Economic Conference, in August 1932. At this Conference preferential agreements were concluded among all members of the British Commonwealth. Such agreements were made possible by the preceding introduction of a general tariff by the United Kingdom. Its "Import Duties Act" of February 1932 imposed a duty of 10 per cent of value on all imported goods formerly duty-free but temporarily exempted Empire goods. Now, at Ottawa, the United Kingdom could bargain freely with Dominions and Colonies. The Conference resulted in a large extension of preferences in the Colonies for items produced in Great Britain and in the Dominions granting concessions to British and Colonial products. On the other hand, Great Britain promised to maintain her duty exemptions for Empire products.

The supreme preferential principle as manifested in the Ottawa Agreements was "home producers first protection, Empire producers second protection, foreign producers none at all!' The agreements confirmed the abolition of Empire free trade and the substitution of bilateral trade relations. Eleven bilateral trade agreements were concluded at Ottawa after bitter struggles and endless bickering among the various groups of producers seeking protection. The Dominions desired to maintain and develop their manufacturing industries and feared almost equally the competition of British and foreign producers. They were not prepared to yield and submit to a substantial reduction in their tariffs. On the other hand, English producers fought for a continuance of the preference policy with respect to the exportation of manufactured goods to the Commonwealth. In the final preference agreements Britain submitted to almost all wishes of the other members of the Commonwealth. She agreed to maintain or impose substantial duties on most foreign foodstuffs and raw materials in order to grant trade preferences and privileges to Empire producers. She bound herself to continue the exemption of Empire products from duties imposed under the Import Duties Act of 1932. The Dominions, on the other hand, agreed to protect by tariff only those domestic industries "which are reasonably assured of sound opportunities for success." Furthermore, they promised to "avoid excessive protection" against British producers and allow a "reasonable degree of competition on the basis of relative costs." All concluding parties agreed to a method of fixing minimum margins of preference for Commonwealth producers.7 7 See also J. Henry Richardson, British Economic Foreign Policy, London, 1936, p.

130 et seq.

120 DOCTRINES AND PLANS OF UNIFICATION The Destruction of the World Economy. Immediately after the Ottawa Conference, difficulties arose among the concluding parties regarding the interpretation of the preference agreements. British producers complained about the "excessive protection" of Dominion industries against British goods. On the other hand, the Dominions —especially Australia and Canada—increased the duties to the rate of 100 and more per cent of the product value, and they maintained that these rates were only moderately protective and allowed reasonable competition. While the markets for Dominion goods in Great Britain increased in subsequent years, those of foreign producers declined. Their complaints about unemployment and severe depression, of course, remained outside the sphere of Commonwealth interest. Since foreign producers were unable to sell to importers in Great Britain and thus earn British media of foreign exchange, they no longer bought goods produced in Great Britain.

A decline in British exports to foreign countries and a corresponding depression in the British export industries inevitably resulted. Inasmuch as the policy of Commonwealth preference discriminated against foreign goods and foreign citizens, their states naturally took similar or even further retaliatory steps to discriminate against goods and citizens from the Commonwealth. All over the world the principle "home producer first and last protection" became paramount, and the obstacles to international trade and relations increased manyfold. This system of Commonwealth cooperation would indeed be incomplete if it were limited to the use of tariff obstacles only. In the years following the Ottawa Agreements, modern and more efficient means of trade protection and preferences were developed such as the quota system with long-term guarantees of quantities and prices, the exchange control system with its priorities as to "essential" foreign trade, the system of monetary management, and sterling devaluations and manipulations supplementing or even replacing the tariff pattern of Commonwealth preference. It is this model of economic cooperation and unification which the fathers of the United Europe Movement are recommending to the free nations of Europe—a model of modern economic nationalism, a hindrance to international trade and reconciliation. It puts new duties on foreign products and imposes new taxes on goods consumed by the people; it closes the door towards freer world trade by binding the member nations to refrain from reducing tariffs without the consent of all other member nations; it limits the power to negotiate freer conditions of trade with other countries and perpetuates the THE UNITED EUROPE MOVEMENT 121 sway of protectionism and interventionism. This is the pattern of cooperation of the British Commonwealth.

Europe Enjoys Greater Freedom than the Commonwealth. The difference between the presentday state of affairs in Europe and the British Commonwealth is only a matter of degree. Although it is true that the member nations of the Commonwealth have imposed lighter restrictions on each other's trade allowing for minimum margins of preference, a European nation at least enjoys the right and freedom to abolish its total restrictions at a moment's notice. It can return to free trade and enjoy its advantages without its neighbors' consent. Whoever values the aspect of return to free world trade and world cooperation must prefer the European system of "autonomous" trade restrictions. Protectionism Must Destroy the Commonwealth. The very ideas that gave birth to the system of Commonwealth preference must ultimately bring about the destruction of the Commonwealth. The modern principle of government intervention in favor of domestic producers organized in political and economic pressure groups necessarily cannot differentiate as to the source of competition from which the domestic industry is to be protected. The objective of protective policies of intervention is protection, no matter with whom the industry is competing. The fact that government protection is granted gradually and discriminately does not refute this statement. The Commonwealth industry clamoring for protection from German, Japanese, or American competition is demanding protection. That the competition is German, Japanese, or American is irrelevant, although it is welcome since national, political and other considerations and feelings can be fully utilized in the advocation of protection. Once protection from foreign nations is secured, future desires for protection must necessarily be directed at other competition—Commonwealth competition.

There is no reason whatever stated for the elimination of foreign competition that cannot be cited in favor of elimination of Commonwealth competition. Once the Dominions have greatly eliminated foreign competition, they may begin to argue for protection from Commonwealth producers. They may raise their import restrictions to levels that are prohibitive not only for foreign importers, but for Commonwealth importers as well, even though they enjoy the minimum tariff preference. A prohibitive tariff may stay prohibitive even when the minimum preference is deducted. It is even conceivable that, under these conditions, the whole pattern of Com122 DOCTRINES AND PLANS OF UNIFICATION monwealth cooperation may become meaningless and the principle of national autarky paramount. The Economic Link of the Commonwealth. The significance of the British Commonwealth as a pattern of cooperation lies in the existence of greater freedom of trade than in other parts of the world. That is to say, the Commonwealth enjoys real meaning and significance as long as its member nations enjoy a margin of liberty over other nations. A "minimum preference" in tariff duties obviously constitutes an insignificant margin, or even no margin at all, in this era of multiplicity of trade obstacles.

This knowledge leads us to another important conclusion. We may infer that the continuation of the Commonwealth's pattern of cooperation depends either on the trade policies of the Commonwealth nations themselves or on those of other nations. If the Commonwealth nations should resort to trade policies that are as restrictive as the policies of other nations, the British Empire will cease to be an area of relatively free trade and economic integration, no matter how many other historical, ethnological and cultural threads continue to bind the British nations. The Commonwealth as a pattern of cooperation then simply ceases to exist even though the member nations may continue to call themselves "British" and "member of the Commonwealth." On the other hand, the same disintegration may result from the trade policies of other nations. If other nations should return to an unhampered market policy, the Commonwealth nations' margin of economic freedom would be eliminated. And the British Commonwealth would then constitute an area of national trade restrictions and economic nationalism.

That is to say, the British Commonwealth would cease to exist. Consider the following example. If the United States were to conduct a free market policy without tariffs, quotas, and the numerous other restrictions now existing towards Canada, a large part of the production of the Canadian export industries, including agriculture, would be sold on the American market. Many goods that are now exported to Great Britain and other Commonwealth countries would be exported to the United States. The Canadian producers would earn large balances of American exchange which ultimately would lead to a corresponding expansion of American exports to Canada. On the other hand, assume that the Commonwealth nations would continue to apply the multiplicity of government restrictions on imports, although they may grant an insignificant "minimum preference" as to tariff duties on imports from Canada. Now the question may be raised: "With what econTHE UNITED EUROPE MOVEMENT 123 omy will the Canadian economy be more closely integrated—the British, South African, or Australian national economies, or with the United States whose vast market is completely open to Canadians without any discrimination whatever?" It is obvious that, under these circumstances, the British Commonwealth, as far as Canada is concerned, would merely be a union in name, while the AmericanCanadian economic union would be a reality.

However, the latter road to destruction of the British Empire due to liberal policies by outside nations is unlikely under presentday ideological conditions. The United States, for example, is not likely to abolish its protection of grain, butter and egg producers and return to a system of free trade in the near future. But it is certain that the British Commonwealth must cease to exist, if and when the Commonwealth nations, animated by the ideas of protectionism and interventionism, resort to increasingly restrictive trade practices. Summary. The invitation by Sir Winston Churchill and his followers to the European nations to unite as the Commonwealth nations are united must be rejected on the following grounds: 1. The Commonwealth economic system merely constitutes one of the many aspects and stages of the destruction of world economy. 2. The Commonwealth economic system is based on the relinquishment of the right to return to freedom of trade and world integration.

3. The Commonwealth economic system with its minimum tariff concessions has become meaningless through the application of a multiplicity of more efficient trade restrictions. 4. The Commonwealth economic system is in the process of dissolution and liquidation due to government restrictions of foreign trade. 5. The Commonwealth economic system is a system of cooperation of interventionist governments in their endeavor to control and direct the individual, be he Britisher or foreigner.