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

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12Wolfram KaiserTABLE 1: Foreign Trade of EFTA StatesExports of EFTA states as a percentage of total exports (1958)To EFTA To EEC To OEECAustria 10.5 49.7 62.6Denmark 40.3 31.7 73.4Norway 37.5 27.3 66.2Portugal 17.5 24.7 43.1Sweden 34.9 31.0 67.3Switzerland 15.5 39.2 55.8United Kingdom 10.1 13.1 27.4Imports of EFTA states as a percentage of total imports (1958)From EFTA From EEC From OEECAustria 11.2 55.6 66.8Denmark 39.6 36.1 76.0Norway 37.8 35.3 73.5Portugal 21.6 39.2 61.5Sweden 24.5 41.8 66.7Switzerland 10.8 58.8 70.0United Kingdom 9.7 14.1 27.2Source: “Sieben und EWG”, PA AA 353/Ref. 200-I A2 (18 June 1959)Of the other EFTA states, Austria and Switzerland were highly dependent onthe EEC market, with 49.7 per cent of Austrian exports and 39.2 per cent of Swissexports going to the EEC, although the more diversified, internationalized andcompetitive Swiss economy was less prone to suffer from rising tariff barriers.Most importantly, Britain, the dominant economic and political power among theouter Seven, had only a limited economic stake in a small FTA. In 1958, a mere10.1 per cent of Britain's exports went to its future EFTA partners and 13.1 per centto the EEC, mainly to the Federal Republic and Benelux. In November 1958 theBritish Treasury, which supported the EFTA option in the internal deliberations,predicted a modest increase in exports to Scandinavia as a result of the gradualreduction and eventual abolition of internal tariffs in EFTA “to the tune of some100 m. pounds a year” which, however, was unlikely to compensate fully for theexpected losses in the faster growing EEC market. 22 As a result, there was initially22. PRO FO 371/134419/50 (26 November 1958).
Challenge to the Community 13widespread scepticism among the political decision-makers during 1958-9 – especiallyin Britain, Denmark and Austria – as to the economic viability and the diplomaticusefulness of a small FTA. When this option – in the form of a Uniscan FTA 23 –was first mentioned at ministerial level in Britain in July 1958, for example, thePresident of the Board of Trade, David Eccles, complained:“I do not like this. It would be a climb-down – the engineer's daughter when the general-manager'ssaid no. Would we be trying to make the Six jealous and take us back,or would we seriously contemplate life in a Scandinavian group over against theSix?” 24At that stage the most appropriate reaction to de Gaulle's veto was still largelyseen as a matter of trade policy, and the issue was thus not yet as politicized as itwould be in the early 1960s. With little domestic or party political interest involvedin the EFTA option, the resulting lack of strong leadership allowed a political vacuumto develop over European policy in the absence of a wider settlement with theEEC. This vacuum was filled during 1958-9 by the industrial federations, especiallythose of Sweden, Norway and Britain, and by those officials who had beenintimately involved in the FTA negotiations and who had established close and regularcontacts during 1958. They strongly pressed for the adoption of the EFTAoption – not, as one British official report on the Uniscan FTA put it in December1958, “because of its intrinsic merits but because there is no alternative”. 25Representatives of the industrial federations of the developed non-Six OEECstates had forged closer contacts since January 1958, when Swedish industrialistsinitiated regular consultations during talks in London with two representatives ofthe Federation of British Industries (FBI), Director General Norman Kipping andOverseas Director Peter Tennant. 26 This bilateral meeting was followed by a summitof British, Norwegian, Swedish, Danish, Swiss and Austrian representatives inParis on 13/14 April 1958, 27 and another summit in autumn 1958, which took placeat the suggestion of British officials. 28 After the breakdown of the FTA negotiationsthe industrial federations opted for EFTA primarily as a means of putting politicalpressure on the EEC in order to reach a wider trade settlement between the twoblocs. On 17 December 1958, the FBI President, Hugh Beaver, demanded at a23. In 1950, Britain, Norway, Sweden and Denmark had established Uniscan which merely providedfor consultative meetings on the level of officials and, when necessary, between ministers on economicand financial questions.24. Eccles to Macmillan: PRO PREM 11/2531 (14 July 1958).25. PRO PREM 11/2532 (3 December 1958).26. Cf. W. PAUES, “Die Industrie und die EFTA. Wenig Bekanntes aus der Vorgeschichte der EFTA”,in: EFTA Bulletin 16/4 (1975), pp.13-16 (13-14). On the European policies of the Scandinavian federationsuntil the creation of EFTA see also B. STRÅTH, Nordic Industry and Nordic EconomicCooperation. The Nordic Industrial Federations and the Nordic Customs Union Negotiations 1947-1959, Stockholm 1978.27. Cf. Free Trade in Western Europe. A joint statement by the Industrial Federations and Employers'Organisations of Austria, Denmark, Norway, Sweden, Switzerland, the United Kingdom, Paris14.4.1958.28. On FBI policy see also N. KIPPING, Summing up, London 1972.
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