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8Wolfram Kaisertion from the Federal Republic of Germany in the EEC could be economically disastrousfor France. In any case, the plan was unacceptable without far-reachingcompensations similar to those France had obtained in the Brussels negotiations,which included EEC funds to subsidise the French colonies and the decision inprinciple to develop a common agricultural policy by the end of 1969. 6 At least thegovernments of the Fourth Republic were still to some extent tempted by the ideathat Britain could provide a useful counterbalance to the Federal Republic in theemerging European structure and thus they showed some political interest in theFTA plan. After his return to power in spring 1958, however, de Gaulle moreclearly preferred the EEC – based on French political leadership – and close cooperationwith the Germans, and the reorganisation of the North Atlantic TreatyOrganisation (NATO) almost immediately became the primary focus of French foreignpolicy. 7After the breakdown of the FTA negotiations the non-Six OEEC states neededto redefine their European policies. They were confronted with the prospect ofgrowing discrimination in the EEC market by comparison with the Six. The EECTreaty provided for the abolition of all internal tariffs on industrial goods and theintroduction of a common external tariff over a period of twelve years, starting withthe first reduction of 10 per cent on 1 January 1959. In addition, the British governmentwas concerned about the EEC offering German industry every advantage inproduction and commercialisation of a larger internal market and thus also providingit with substantial competitive advantages over British industry in third markets.Moreover, as the only larger power among the non-Six OEEC states with continuingworld-wide political interests and responsibilities, the British also fearedthat the EEC without a wider FTA would reduce their political influence in WesternEurope and vis-à-vis the United States. In early 1956 Macmillan, who was thenChancellor of the Exchequer, already had warned that“perhaps Messina will come off after all and that will mean Western Europe dominatedin fact by Germany and used as an instrument for the revival of German powerthrough economic means. It is really giving them on a plate what we fought two warsto prevent.” 8Of the non-Six OEEC states, Britain, Sweden, Norway, Denmark, Switzerland,Austria and Portugal eventually decided in 1959 to create the European Free TradeAssociation (EFTA), with Portugal joining in the negotiations only after preparatorytalks among the other Six. The Stockholm Convention was initialled on 20November 1959, signed on 4 January 1960, and it entered into force on 3 May1960. Finland later became associated with the so-called outer Seven through FIN-EFTA, which was signed on 27 March 1961 and entered into force on 26 June6. S. BERNIER, Relations politiques franco-britanniques (1947-1958), Sherbrooke 1984, p.178.7. On de Gaulle and the reorganisation of NATO after 1958 see M. VAISSE, “Aux origines du mémorandumde septembre 1958”, in: Relations Internationales 58 (1989), pp.253-68; G.-H. SOUTOU,“Le général de Gaulle et le plan Fouchet”, in: Institut Charles de Gaulle (ed.), De Gaulle en son siècle.Vol. 5: L'Europe, Paris 1992, pp.126-43.8. PRO T 234/100 (1 February 1956).
Challenge to the Community 91961. The EFTA Treaty closely resembled the initial Plan G for strictly intergovernmentalmarket integration in the form of an industrial FTA with weak institutions.9 The treaty included limited provisions for majority voting to enforce treatyprovisions, a general consultation and complaints procedure, escape clausesintended mainly for balance-of-payments problems and a set of rules of origin, acontentious issue in the FTA negotiations. The EFTA Treaty defined industrialcommodities in a set of process lists and lists of basic materials. Commoditiescould claim EFTA treatment when containing more than 50 per cent value added inEFTA. 10In agriculture, the EFTA treaty merely included a general commitment to theremoval of agricultural export subsidies and to consultations about the expansion ofagricultural trade among member states. However, for the negotiations to succeedthe British had to make bilateral concessions in agriculture. In an agreement withDenmark they agreed first to reduce and then to eliminate customs duties on theimport of bacon, canned meat, blue veined cheese and canned cream. The Britishgovernment also declared in general terms its intention to refrain from any policieswhich would make it more difficult for Danish producers to maintain their marketshare in the United Kingdom. 11 The Anglo-Danish agreement, which both sidesnegotiated during bilateral talks in London in June 1959, was complemented bymore limited bilateral agreements with Denmark by Sweden, Switzerland and Austria.12 In the final stages of the negotiations the British also made concessions onthe import of fish from Norway. 13Initially conceived as an instrument to achieve a wider West European trade settlement,EFTA was able to consolidate itself after de Gaulle's veto against BritishEEC membership in January 1963 and continued to exist until after the enlargementof the Community by Sweden, Finland and Austria in 1994-5. In a longuedurée perspective, EFTA might appear as an episode in the history of Europeanintegration. Yet, the policies of EFTA and its member states during the first half ofthe 1960s significantly influenced the course of European integration in the longrun in two main respects. Firstly, EFTA was a test case for the practicality of industrialfree trade within a loose institutional and regulatory framework, which theFrench in particular had called into question during the FTA negotiations, and thusindirectly for the feasibility of a flexible system of variable geometry in Europeanintegration with an economically and politically more integrated core Europe and9. On the treaty provisions see in greater detail M. af MALMBORG and J. LAURSEN, “The Creationof EFTA”, in: T.B. OLESEN (ed.), Interdependence versus Integration. Denmark, Scandinavia andWestern Europe, 1945-1960, Odense 1995, pp.197-212.10. Cf. EFTA, Die Ursprungsregeln, Geneva 1965.11. “Agreement on Agriculture between the Government of the United Kingdom of Great Britain andNorthern Ireland and the Government of the Kingdom of Denmark”, in: EFTA, Agricultural Agreementsbetween the EFTA Countries, Geneva 1969, pp.19-26.12. Ibid., pp.7-18.13. The problem of fish is analysed in some detail in R. GRIFFITHS, “The importance of fish for thecreation of EFTA”, in: EFTA Bulletin 33/1 (1992), pp.34-40. See also Hankey (Stockholm) to ForeignOffice: PRO PREM 11/2827 (19/20 November 1959).
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Industrial Interest in West Germany
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