Journal of European Integration History – Revue d'histoire de l'

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10Wolfram Kaiserother levels of integration. Secondly, EFTA provided a point of comparison for theEEC and its member states. By exerting considerable economic and political pressurefor a solution to the economic split of Western Europe into Sixes and Sevens,as it was then called, EFTA and its member states decisively influenced the controversyamong the Six – and particularly in the Federal Republic – over the EEC'sexternal economic policies and its political role in the world, and over the futuredirection of European integration.ISince the negotiations in the Maudling Committee had stalled in the spring of1958, there had been talk among the outer Seven – particularly in Britain, Norwayand Sweden – of possible retaliatory trade measures of the non-Six OEEC states,should France finally veto the FTA. When visiting London in March 1958, forexample, the Norwegian Trade Minister Arne Skaug was already “breathing fireand slaughter”, according to Norwegian officials, because of French obstruction ofthe FTA negotiations and gave the British the impression that “he was anxious topropose new alignments between the United Kingdom and the Scandinavian countriesshould the Free Trade Area fail”. 14 Macmillan, too, was extremely concernedabout possible British exclusion from a common market of the Six and frequentlyreferred to the possibility of retaliatory measures in a West European trade war. InJune 1958 Macmillan wrote in an internal memorandum for Lloyd and the Chancellorof the Exchequer, Derek Heathcoat-Amory:”If little Europe is formed without a parallel development of a Free Trade Area weshall have to reconsider the whole of our political and economic attitude towardsEurope. I doubt if we could remain in NATO. We should certainly put on highly protectivetariffs and quotas to counteract what little Europe was doing to us. In otherwords, we should not allow ourselves to be destroyed little by little. We would fightback with every weapon in our armoury. We would take our troops out of Europe.We would withdraw from NATO. We would adopt a policy of isolationism.” 15Three days later Macmillan told de Gaulle during their first encounter in Paristhat “if we were to be threatened by a trade war by the Six we would be driven backon ourselves and would have to seek our friends elsewhere. (...) [It] might evenspell the end of NATO.” 16 And in October Macmillan threatened the German Chan-14. As reported by Ellis-Rees to Bretherton: PRO BT 11/5648 (6 March 1958).15. Macmillan to Lloyd and Heathcoat-Amory: PRO PREM 11/2315 (24 June 1958).16. PRO PREM 11/2531 (29 June 1958).
Challenge to the Community 11cellor Konrad Adenauer in a personal letter that “we shall have to retaliate (...). Thereal danger is for the political unity of NATO. The collapse of the Free Trade Areacould lead to the break-up of NATO and of our defensive system (...).” 17While Macmillan was still contemplating a “fortress Britain” policy in October1958, 18 however, the political and administrative elites of the outer Seven realizedclearly that – particularly in view of strong United States support for the EEC –their political position was much too weak to start a trade war with the Six. Norwas it in their economic interest. The Deputy Secretary of State in the British ForeignOffice, Paul Gore-Booth, noted laconically on the margins of one of Macmillan'sinternal trade war memoranda:“A nation of shop-keepers living on international trade and finance and importing50% of its food-stuffs cannot turn itself into a self-supporting fortress except possiblyat a drastically reduced (and electorally unsaleable) standard of living.” 19Essentially, the same was true of all of the outer Seven, and particularly of theindustrial export nations Sweden and Switzerland. Thus, after a short period ofrecriminations over the final breakdown of the FTA negotiations the outer Seven inthe first instance concentrated on alleviating the adverse effects of discrimination inthe EEC market as of 1 January 1959. The British government, in bilateral talkswith the French, eventually managed to negotiate a transitional agreement wherebythe first EEC tariff cut of 10 per cent was extended on a most-favoured-nation basisand EEC quota increases were partially extended to the other OEEC states.Having secured these French concessions, the choice of a small peripheral FTAas a medium-term economic solution was not equally obvious to all among theouter Seven. As Table 1 shows, only Norway, Denmark and Sweden exported substantiallymore to the other EFTA states than to the EEC, and Sweden actuallyimported significantly more from the EEC than from the other EFTA states. Moreover,almost two-thirds of Danish exports were agricultural products. By 1958these exports were about equally divided between the other EFTA states, mainlyBritain, and the EEC, mainly the Federal Republic. 20 However, the agriculturalexports to the Federal Republic, which had risen by 12 per cent during 1953-7,while those to Britain had fallen by 17 per cent, 21 were in danger of at least partiallybeing replaced by intra-EEC trade as a result of the Common AgriculturalPolicy (CAP) which the Six were about to develop and the Danes could not hope toreceive substantial compensatory concessions in EFTA.17. Macmillan to Adenauer: PRO PREM 11/2706 (25 October 1958). See also the meeting betweenMacmillan and Adenauer and the German Foreign Minister, Heinrich von Brentano: PRO PREM11/2328 (8 October 1958).18. Macmillan to Lloyd: PRO FO 371/134545/3 (5 October 1958).19. Ibid. (17 October 1958).20. J. LAURSEN, The Great Challenge. Denmark and the First Attempt to Enlarge the European Community,1961-63, European University Institute DOC. IUE 30/94 (COL.12), Florence 1994, p.5.21. Cf. MINISTRY of FOREIGN AFFAIRS, Economic Survey of Denmark, Copenhagen 1961.
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