National Protectionism and Common Trade Policy

A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Koopmann, Georg Article — Digitized Version National protectionism and common trade policy Intereconomics Suggested Citation: Koopmann, Georg (1984) : National protectionism and common trade policy, Intereconomics, ISSN 0020-5346, Verlag Weltarchiv, Hamburg, Vol. 19, Iss. 3, pp. 103-110, http://dx.doi.org/10.1007/BF02928302 This Version is available at: http://hdl.handle.net/10419/139912 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. 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The following article demonstrates, among other things, that protectionism in the Community cannot offer a workable alternative to this course. he EC's trade policy, under the terms of Article 113 with measures which are not primarily trade policy T of the EEC Treaty, is intended to follow uniform measures. principles. The Treaty also cites the essential aims of Numerous initiatives and interventions, all this common trade policy: protectionist in their intent, have increasingly hampered [] The policy should contribute to the harmonious efforts within the Community to establish a common will development of world trade, to the progressive abolition on matters of trade policy. The greater difficulty in of restrictions on international exchanges and to the reaching a common trade policy line is a reflection of lowering of customs barriers (Art. 110, EEC Treaty). both national egoism, which lay hidden during the period of prosperity, and greater differences between member [] Simultaneously, an effort must be made "to ensure countries, or else differences which are accentuated by that competition between enterprises within the the Community's general economic weakness. Community shall not be distorted" (Art. 112). Considerable differences between members can be Thus the overall direction prescribed for the common ascertained particularly in the following respects: trade policy is a liberal one committed to fair [] the degree of economic interdependence with third competition, and protectionist behaviour must be seen countries; in principle as a contravention of the Treaty. 1 Individual countries may only take action in the field of trade policy [] the profile of sectoral specialisation and the pattern with the Community's express consent. 2 This would of regional trade; appear to tie the hands of national protectionists. [] flexibility in structural adjustment to external shocks However, common trade policy as it is practised in the or to changes in supply and demand conditions on world real world stands in sharp contrast to the norm markets; enshrined in the Treaty. There are essentially two ways [] the structure of the national "protectionism market"; in which national protectionism can establish itself, as it has on a considerable number of occasions in the past: [] the value placed on the risks and rewards of free trade in times of crisis. [] Firstly, member countries can exert pressure for a protectionist line in common trade policy at various According to the above criteria, a given member state levels in the Community's decision-making process. would be all the more likely to intervene in foreign trade [] Secondly, there is still a considerable amount of 1 For a legal .assessment, cf H.-P. Ipse n" Europaisches opportunity for individual countries to go their own way Gemeinschaftsrecht, TI3bingen 1979, p. 821; G. N i c o I a y s e n : Europalsches Gemeinschaftsrecht, Berlin etc 1979, p. 190. as regards trade policy. This opportunity stems from two 2 The European Court allayed any final doubts as to the Community sources: one is the dichotomy between Community bodtes' sole authonty in a judgement dated 15. 12. 76. Case 41/76 competence and national implementation in essential (Donckerwolcke v. Procureur de la R6publique) 1976, p. 1921 ff The Court at the same time recognlsed m the Donckerwolcke judgement that areas of trade policy; 3 the other is the possibility of common trade policy is still incomplete making use of "grey areas", intervening in foreign trade s Cf. M. B r o n c k e r s : A legal analysis of protectionist measures affecting Japanese imports into the European Community, in: E. V o I k e r (ed): Protectionism and the European Community, Deventer * HWWA-Institut fur Wirtschaftsforschung-Hamburg 1983, p. 60. INTERECONOMICS, May/June 1984 103 EC the less it depended on exports to third countries, the represent the Community in international talks with a more it depended on the competitive parameter, prices, limited mandate to negotiate. The inevitable result is a in order to maintain its position on the world market, the weakening of the Community's negotiating position. more adversely it were affected by structural and A well-tried means of pressure to enforce the putting regional changes in world trade, the less flexibly it were into practice of protectionist ideas is for individual able to adapt to such developments and to external countries to threaten to take measures of their own if shocks, the greater the influence exerted by the they are not satisfied. The liberal Community members protectionist lobby, and the more likely it were to take the are all the more likely to yield to this pressure as they view "that it is more important to preserve existing know there are still any number of ways in which incomes and therefore employment than to increase national trade policy can be pursued without regard for total income". 4 the Community. Even if the measures in question are Member countries are not ranked in the same order declared illegal, that does not necessarily mean they fail under each of the criteria. When looked at as a whole, to achieve the desired effect. 5 however, the criteria do offer a good explanation for the Independent national trade policy initiatives not only development of two opposing "camps" in the EC as serve to apply pressure in negotiations, but also act as a regards trade policy. The interventionist camp is led by substitute for Community policy wherever this is France and can count Italy, and presumably also insufficient to satisfy the national protective interest. The Greece and Eire as "permanent" members. On the most obvious illustration of the EC's disunity on trade other side of the fence West Germany together with policy is the variation in the extent to which different Denmark and, with some reservations, the Netherlands, members invoke Article 115 of the EEC Treaty; this form the liberal camp. The remaining members cannot article allows member countries to take certain goods be so unequivocally grouped, or else they change camp from third countries which move freely within the according to the particular matter being debated at the Community, and exclude them from Community time. However, on the whole they are more disposed to treatment if importing them threatens to create act in concert with the interventionist group of countries. economic difficulty. Table 1 shows that France and Eire It is clear, then, that the protagonists of liberal trade in particular have made frequent use of this provision policy are in a difficult position in the EC, both in terms of while West Germany and especially Denmark have numbers and, all the more markedly, in terms of voting seldom used it. The third countries most often involved strength. In the EC Council, for example, where were Hong Kong, South Korea, Taiwan and Japan. decisions must be backed by a qualified majority, West Three manifestations of national protectionism will be Germany, the Netherlands and Denmark have 18 votes dealt with below; they are as follows: 6 between them, whereas France and Italy alone have more than 20 votes. If they have the support of the [] autonomous quantitative restrictions on imports, United Kingdom, Eire, Belgium and Greece the number Table 1 of votes available to the member countries which are Use Made of Art. 115, EEC Treaty, 1977-1983 relatively defensive in approach rises to 43. BNL D DK F GB IRL IT EC It is often the case that the differences are not settled internally, but that theyalso come to light at an 1977 15 9 - 25 5 3 6 63 international level, or that the Commission must 1978 47 3 - 74 14 28 16 182 1979 49 6 3 113 28 25 12 236 1980 17 1 1 83 5 55 24 186 4 Cf. S. P a g e : The Increased UseofTradeControlsbythe Industrial 1981 22 2 - 78 17 44 27 190 Countries, in: INTERECONOMICS, No. 3 (May/June) 1980, p. 149 1982 19 2 - 52 11 26 28 138 France's behaviour in the negotiations on the first extension of the 1983 23 4 - 43 19 47 31 167 Multi-Fibre Arrangement provides an example of this.

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