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

Industrial Interest in West Germany´s Decision 59visibility of these opportunity costs at that time. Apart from the fact that this studyis not mainly concerned with the question of trade creation and diversion, one hasto bear in mind that the very visible increase in exports to the EEC was not onlydue to the same growth in demand that was at work, with difference in degree, in allof Western Europe, but as far as France and Italy are concerned also to their highlevels of protection prior to the foundation of the EEC.Thus the highest rates of growth in German exports were to these two previouslyhighly protected markets, while the growth of exports to the smaller Europeaneconomies within or outside the EEC was, where it occurred, more moderatethan that. Hence, if one were to calculate the opportunity cost of individual sectorsor manufacturing exports as a whole, one would have to figure into the equation thedifferent levels of protection before and after the coming into effect of the EEC ineach individual EFTA market. It is hard to make a clear statement on the basis ofthe presented graphs as to what the opportunity cost was. Yet in view of these considerations,it is safe to assume that, had there been the free trade area, exports fromthe sectors of German industry which were potential gainers to the EFTA countrieswould most probably not have grown at a rate comparable to the average rate ofgrowth to the individual EEC countries and certainly not nearly as fast as exports toFrance and Italy grew in most industrial sectors analysed here.The export evidence for some of those sectors which saw themselves as thepotential losers from any enlargement of the EEC or any wider free trade area comprisingthe Seven or some of them, leads to conclusions which are very differentfrom those drawn in the case of the potentially winning sectors. This is mainly dueto the expectations in these sectors with which the trade figures were seen. Duringthe Maudling negotiations the assumption in these sectors was that the foundationof any free trade area would result in major damage or even catastrophe for therespective industry. The prime concern was serious competition in the home marketeither from Scandinavia and Austria (paper, non-ferrous metals) or from the UnitedKingdom (non-ferrous metal products). The trends for exports of these sectors toEFTA up to 1958 anyway were either only very moderately rising or indeed steeplyfalling, as in non-ferrous metals. If the free trade area came into existence, hugelosses in exports were taken for granted. Nothing could be done about that, giventhat German exports in some of these sectors already were losing out against theircompetitors among the Seven in the absence of the free trade area. Thus initially,the prime concern of the potential losers was the protection of the home market.Yet once the EEC had come into operation with the CET guaranteeing moreprofitable prices for the problem sectors, the concern with regard to the free tradearea was not only the danger of foreign competition in the domestic but also in thecommon market that was to evolve. Once the industries had become aware of thepotential for exports to France and Italy, they were fighting not only against potentiallosses on the home market but at the same time for profits they were sure toincur on the EEC markets.Thus for the potential losers from the free trade area and from British accession,both their likely losses and their opportunity costs were very visible indeed. This isparticularly clear in the case of the paper industry.