THE EUROPEAN ECONOMIC COMMUNITY' S. J. MEIJER

THIS PAPER WILL deal with the European Economic Community, its impact on the future political, economic and social development in Europe and the association of the overseas territories with the Community. This is not the first time that a lecturer in South Africa has expressed his views upon the European Economic Community,2 but meanwhile the Treaty has been ratified and it seems worth while to envisage the political and economic development of Europe to be expected from the implementation of this spectacular arrangement concluded by the so-called Six, i.e. Belgium, France, Germany, Italy, Luxemburg and the Netherlands. For this purpose a short outline, only, of the essential contents of the Treaty is made.

First and foremost it should be stressed that the Treaty, establishing the European Economic Community, is not identical with the European Common Market, the latter being only part of the Treaty though very essential.

The first chapter of the Treaty deals with the guiding principles. I t aims at fostering the harmonious development of the economic activity within the Community; at a gradual and well-balanced expansion; at a greater stability and increasing amelioration of the standard of living; and at closer relations between the countries taking part in the Community.

The second chapter deals with the free movement of merchandise and includes the rules governing the European Common Market.

The third chapter lays down common rules concerning competition between enterprises; the taxes on products passing from one member state to another; the adjustment of the different national legislations necessitated by the establish- ment and the operation of the Common Market; the harmonization of national economic policies ; the establishment of a common trade policy; the promotion and harmonization of social legislations, and the establishment of the European Social Fund and of the European Investment Bank.

The fourth chapter deals with the association of overseas countries and territories.

Chapter five determines the regulations with regard to the institutions of the Community, i.e. the Assembly, the Council of Ministers, the European Commission, the European Court, the Economic and Social Committee which acts in an advisory capacity.

The sixth chapter contains a number of final clauses dealing amongst others with the legal status of the Community; the position of the languages; the relations

I . An address sivcn under the auspices of the Extra-Mural Board, University of Cape Town, on 24th July 1958. 2. Lecture given by Mr. D. de Waal Meyer lo the Pretoria Branch of the Economic Society on 24th May 1957.

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of the Community with other international organizations, applications for membership of other European states and the conclusion of association-treaties with third countries or international organizations in general.

Finally four appendices, eleven protocols and the agreement on the application of the association of the overscas countries and territories with the Comniuity, form part of the Treaty.

I t is obvious that within the scope of this paper it is impossible to elaborate on all the provisions of the Treaty. I t may be crystal-clear, however, that if the Treaty is carried out to the letter and the spirit of what is stipulated therein, Europe, at the end of the transition-period of 12 to 15 years, will show quite a different face compared with that of to-day. There are still people who doubt the realization of this courageous and far-reaching project and one cannot deny that there are symptoms that entitle them to remain somcwhat sceptical. On the other hand it should be stressed that recent history and recent experiences have convinced the governments and peoples of the six countries constituting the Community, that they have no other choice. Since the war Western Europe has increasingly been faced with the neccssity to reorganize and to adapt its political and economic structure to the realities of the new world, which is emerging as a result of the great technological advancements, and of the growing power that is conccntrated in the great politico-economic units of the world.

The famous report, edited by a commission under the chairmanship of the former Belgian Prime Minister, Mr. Spaak, (to-day Secretary-General of NATO) served as a working-paper to the Conference of Foreign Ministers at Venice where the decision to establish a European Economic Community was taken, and elucidates the present-day position of Europe in a striking way.

Situated between the United States producing in almost every sector of industrial activity half of the world-production on the one side and the countries belonging to the Soviet-bloc extending their production at a rate of 10 to 15 :/, every year on the other side, there is Europe. Although Europe enjoyed in the pest the monopoly of industrial pro- duction, it is nolhing now sheerly through its own discord, the weakening of its position outside its geographical sphere and the loss of its capttcily to develop itself.

If Europe wishes to survive it will have to merge its diversity into Unity. Politically the aim is, and must be, to put an end to all strife and opposition, to create a lasting community of interests, and to bring into concordance what only too oftcn has been discordant. The whole world has suffered from the disastrous effects of Europe in discordance. By eliminating the political and economic rivalries of the past, the basic conditions are laid down for a new and greater productivity and prosperity.

The objective of the European Economic Community is to lay the economic foundations for such a political unity. Once the economic interests of the member- countries are indissolubly intertwined, the obstaclcs barring the way to political unity can be more easily removed.

As the history of the genesis of Benelux and the European Coal and Steel. Community has repeatedly shown, the first steps to realizing the objects of the treaties are the most difficult. National, industrial, commercial and shipping

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interests are confronted with an entirely new situation and they sometimes fear the often unknown consequences of the new pattern. I t is very human if those enterprises warn their governments and peoples of the expected dire outcome of implementing the provisions of the Treaty agreed upon. On the other hand private enterprise, once the decision has becn taken, is inclined to adapt itself to the new situation which has been created and frequently discovers that future prospects are not so dim as has been prophesied. In this connection attention is drawn to a few examples that support this point.

Before the Coal and Steel Community came into existence. French steel industrialists feared the consequences of this adventurous scheme. No one could blame them. Having for a long time been accustomed to a degree of protection, they could not d o otherwise than distrust their capabilities to encounter German competition in particular. As soon as they understood that nothing could change the course of events, they feverishly acted to adapt their industry to the demands of tomorrow. Partly with the help of the French Government they succeeded in attracting large amounts of capital, which were used for the rehabilitation and modernization of the industry. Before the five years of the transition period of the Treaty had elapsed, the French steel industry was able to compete with other steel industries within the Community and its attitude towards the Community as such had completely changed.

A better example may be drawn from the conflict between the German Government and the High Authority of the European Coal and Steel Community concerning a draft regulation of the latter on the restitution of the purchase tax in the case of products, falling within the jurisdiction of the Coal and Steel Community, being exported from one member-country to another. The German Government, acting on the advice of German fiscal and economic experts, was convinced that the system proposed by the High Authority would mean a deadly blow to the very existence of the German steel industry. As a member of the Netherlands delegation to the Council of Ministers, the author happened to take part in the drawn-out discussions on this subject in the Working Committee of the Council. At the decisive meeting of the Council the German delegation desperately tried again to convince the other delegations of the imminent disaster threatening the German steel industry if the proposals of the High Authority became law. A large majority of the Council, however, decided to recommend favourably on the draft of the High Authority. A year later nothing disastrous had happened, and on the contrary the German steel industry had prospered as never before. In fact, when the writer discussed with German colleagues and friends the prosperity of the German steel industry, and asked why they had fought the decision of the High Authority in such an embittered way the year before, they had honestly to admit that they had been in error.

These illustrations should not induce one to treat lightheartedly objections raised by industrialists, commercial people and technical experts. They only show that, if people are given some time to adapt their business to the new circumstances, their energy and adaptability will in most cases overcome the obstacles that

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uildoubtedly beset their paths. One must repeat-if they are given some time. Those who created the European Economic Community have understood this very well, and that is why the transition-period of the European Economic Community has been fixed at 12 to 15 years. Business and industrial circles will begin to feel the impact of the provisions of the Treaty gradually. They will have sufficient time to re-adapt their enterprises to the new realities and there seems little room for doubt that those enterprises, not working on the very brink of existence, will, notwithstanding the protection granted to them in the past, respond favourably to the challenge the Treaty has called them to. The same, to some extent, holds good foe the governments concerned, although their plight may sometimes not be enviable, dependent as they are 011 public opinion and liable to face very compli- cated problems in their efforts to adapt national policies and regulations to the rules imposed by the Treaty.

Although in principle most third countries have welcomed the birth of this new community as evidence of progressive statesmanship, many of them fear the consequences, evolving from the implementntion of the Treaty, to their pattern of trade, and still object to certain clauses of the Treaty which might harm their national trading interests. In tlie meetings of the General Agreement of Tariffs and Trade a t Geneva delegations of these countries have voiced their doubts on the compatibility of a number of articles of the Treaty with the provisions of GATT to which the Six had equally subscribed. The Six, however, have referred them to Article XXIV of the GATT, which favours the establishment of customs unions as having a trade-creating effect. The GATT, however, stipulates that a customs union should aim at facilitating trade between the countries belonging to such a union, provided that no barriers are raised to the trade of third countries with the member-states of that union. Therefore the Gencral Agreement on Tariffs and Trade demands amongst others that the duties and other commercial-rules, applying to a customs-union should not, on the whole, be higher or more restrictive than the general incidence ofthe duties and regulations applicable in the constituent territories prior to the formation of the union.

The Six believe they have complied with this prescription by establishing a general outer tariff, which will progressively replace the existing tariffs of the different member-states. They have chosen for the calculation of the new tariff a method, which, as a general rule, will be the arithmetical average between the existing tarifk in the different member-countries of the European Economic Community. In certain instances the common tariff will even be below this arith- metical average. For certain groups of products the Treaty provides a maximum duty which the comnion tariff is not allowcd to exceed. The national tarifl's will gradually be brought into line with the common tariff by means of three adjust- ments, to take place successively at the end of the three stages into which the transition-period has been divided.

Although the general incidence of the new common tariff seems to be in conformity with the provisions of the GATT Treaty, it must be admitted that the level of tlie common tariff with regard to certain specific items will be higher than

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those levied in a few participating countries to-day. This applies in particular to the Benelux tariff. On the other hand the level of the common tariff will in many cases be lower than the actual tariff in France and Itat). Moreover, the spokesmen of the Six have repeatedly asked the countries objecting to the system adopted by the contracting parties to the European Economic Community, to take into account the fact that the common tariff will only very gradually be put into effect over a period of 12 to 15 years and the initial changes will only be made after four years at the earliest. This leaves in their opinion, aniple time for all interested parties to adapt theniselves to the new situation.

The future will show whether the consequences certain third countries fear have any real basis. The establishment of the European Economic Community is not a purpose in itself but the means to realize the concerted aim of the six member-countries, i.e. to achieve a harmonious development of the economic activities within the Community, a steady expansion thereof and a gradual improvement of the standard of living. The general increase in prosperity, as the outcome of the European Economic Community will prove, is beneficial to world trade as a whole. The substance of the Treaty-provisions and the flexible nature of the institu1ion:il procedures, moreover, enable the interests of third countries to be taken into full account. Experience has proved that a customs union tends to have a trade- creative effect. A considerable rise in the standard of living of the population of the Comniunity will always lead to a greater purchasing power and C ~ U S C the development of new needs, the buying of more consumption goods, etc. The standardization of production, the modernization and readaptation of industry, the establishment of new undertakings, the introduction of new production methods demand large investments: all these factors contribute not only to a larger circulation of goods within the boundaries of the Community, but at the same time tend to increase the trade volume with third countries. The Benelux customs union, shortly to be converted into an economic union, undeniably proves the correctness of this theory. Compared with the situation existing before the Second World War, there has been a considerable increase in the exchange of trade between the member-countries of the Benelux. Although the percentage- share of third countries in the Benelux-import dropped, the volume of their export trade with the Benelux countries nevertheless showed a favourable development. The same is true for the European Coal and Steel Community, which has also caused an exceptional increase in trade between its member- countries. This example, however, is not so striking because only a few products are involved and because the boom of the recent past may have been p:irtly responsible for the expansion of trade. An analogous development niay be expected from the establishment of the European Economic Community.

What will be h e scope of developmenls in Western Europe stimulated by the gradual application of the provisions of the Treaty?

It may be expected that this phenomenon will provoke fundamental changes in its political, economic as well as its social pattern.

Personally the writer is inclined to believe the opposite.

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Although the transfer of national sovcreignty to the institutions of the Coniniunity is far less than agreed upon in the Trcaty establishing the European Coal and Steel Community, it is still spcctacular. It must be pointed out, however, that the European Economic Community covers practically the entire field Qf economic activitics, which means that the consequences of the rcstrictions on national cornpetencc are far g:cater. Furthermore, the Treaty contains a number of provisions which will have to be elaborated later i n order to realise their objects. The fact that in many cases valid decisions can only be taken if the Council of Ministers unanimously agrees to the proposals of thc European Commission, may seriously hamper the pace of European integration. Fortunately, after the conclusion of the second stage niost of the decisions concerned will be taken by a qualified majority i n each case where the European Commission puts a draft regulation bcfore the Council.

Notwithstanding this, one must trust to the good intentions of those responsible for the implementation of the Trcaty. The pressure exercised by the European Assembly, the national parliaments and private interests on the governments will also favour the realization of complete European integration within the timetable set by the Trcaty. Once change begins, it will be carried forward more and more by its own monicntum. For instance, as their expansion programmes need long- term planning and rcquirc certainty with regard to future developments, industrial concerns and large enterprises will, after all, press for a speedy and complete fulfilment of the Trcaty objects.

As the experience with the Coal and Steel parliamcnt has already proved, the Europcan Asscmbly, consisting of membcrs appointed by the national parliaments, will exert a large direct and indirect influence on tlie activitics of the European Commission, (responsible to the European parliament) and on the Council of Ministers. The process of growth of the Cod and Steel parliament entitles us to expect the formation of diffcrent party-alignments crossing national boundaries. It did not take long bcfore the Coal and Steel parliament witnessed the organization of parlianicritary groups according to ideology. So it frequently happened that members addrcsscd the Assembly as spokesmen of the political party alignments to which thcy belongcd without stating a national point of view. No doubt the same phcnomcnon will present itself i n the European Assembly, which will contribute to the dcvclopnient of European thinking and action. Although the Council of h4inisters is not responsible to the European Assembly, thc Ministers, individually, will be confronted in their national parliaments by the criticism levelled by parliamentary representatives, who possess the dual capacity of National Member of Parliamcnt and member of the European Assembly. As the National Parliaments usually nominate their prominent members to the European Assemblies, the influence of thcir views should not be underestimated. Like the High Authority and tlie other institutions of the European Coal and Steel Community, the distinguished persons invited to take their place in the institutions of the European Economic Community are bound to become imbued with a European notion and outlook almost from the beginning. The officialdom

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of the institutions of the Community, generally being drawn from the most able elements of the intellectual classes of the member-countries, will become thoroughly European in outlook and their activities will have a large influence on the implementation of the Treaty. I t is clear that all these factors will contribute to the cementation of European unity.

Finally the economic interdependence evolving from the implementation of the Treaty will undoubtedly constitute the precondition to political unity and to the ultimate creation of a Western European Federation. The more economic interests become intertwined, the louder will be the cry to clear the path to the realization of the most favourable climate for economic activities, i.e. the political federation of the member-countries.

In the economic field important changes are to be expected. The large industrial concerns, especially, are already feverishly making their preparations to meet the future, since the provisions of the Treaty have opened the way to a large expansion of their activities. Specialization and automation, with the large market in view, are now feasible; and in the same way standardization of production, the construc- tion of a smaller number of mass-produced types and the concentration Qf industries, particularly of those producing mass-goods, will also come within reach of practical possibility.

In the near future comparison of the cost per product will give a decisive answer to the question of where new investments will be made. Very important aspects of the Treaty are the freedom of the workers to move from one country to another, the freedom of private persons of one country to establish business undertakings or provide services in other member countries and the near freedom of capital to move from one country to another. These measures will stimulate competition much more effectively than any rules of free trade could do.

It is true that part of these facilities cannot become effective before the final stage of the transition-period has been reached, but this is only of temporary significance. The freedom of capital movement in particular will give the enter- prises of the member-countries equal access to the capital-markets and enable them to enlarge their finance-basis to a considerable extent. All this will undeniably lead to a rise in the standard of living of the population and cause a new upsurge of economic life.

In anticipation of the coming developments a number of American industria- lists, convinced of the new prospects offered by the Community, have already set up subsidiaries of their enterprises within the boundaries of the Community in order to profit from the large market which is nascent. Western European industrialists are already examining closely what changes in management, pro- duction methods, etc. have to be made in order to intercept the changes or overcome the dificulties they believe to be imminent.

With a view to the rapid expansion of Europe's economy expected to be further stimulated by the coming Community, the Municipal Council of Rotterdam, the world's second port today, has voted the first credits of E6.8 million for the construction of an entirely new port area, the Eurogate. Work has already started

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and the new harbour works will be completed by 1965 at an estimated cost to the city of more than El7 million. It will have docks and drydocks for %oO,OOO ton ships, a steel mill, oil refineries and a coal processing plant. There will also be storage areas for ore, coal, petroleum and other raw materials.

On the other hand, as the economic activities in the different countries will increasingly face competition from other countries within the Community, quite a number of factories existing only by the grace of protection offered to them so far, may not be able to continue to operate. The closing down of these factories will cause unemployment. From the outset of the negotiations it was clear that something had to be done to intercept these unwelcome consequences evolving from the merging of the different national economies. It will be the task of the European Social Fund to facilitate employment in the Community and to promote the geographical and professional mobility of the workers. The European Commission, assisted by a committee composed of representatives of the govern- ments, the trade unions and employers’ organizations will be in charge of that Fund. Its financial means will be used to provide workers with new employment by way of reschooling and by participation in the costs of replacement of the workers involved as well as by lending financial support to those workers who are wholly, or partly, unemployed as a result of their factory changing over to the production of other commodities.

The Association of Overseas Territories, which constitutes an essential part of the Treaty, forms the second part of my paper and may be of special interest to South Africa. France and Belgium, countries which are directly interested in the political and economic development of the territories under their administration, believed that the incorporation of these territories in the Treaty in some way or another was most essential. I t cannot be denied that in particular Germany and the Netherlands showed some apprehension with regard to this proposed extension of the territorial sphere of the future Community. They feared sharp attacks from former colonial countries on what the latter might call the development of neo- European colonialism.

The Netherlands and Germany, however, finally overcome their doubts as to whether or not it was wise to accept the French and Belgian point of view, and arrived at the conclusion that the exclusion of these territories from the Community would mean breaking off economic ties with their mother-countries. This undoubtedly would have the most serious repercussions on the economic and political development of these territories, for they are dependent to a great extent on assistance from the mother-country.

Such a course of action would also be contrary to the solidarity which links the mother-countries to their overseas territories and contrary to the responsibility which they have assumed for their wellrare and development. Germany and the Netherlands have now become staunch supporters of the Association of the Overseas Territories, convinced as they are that, from a political point of view, this tie with Western Europe offers the best chances for a speedy and sound political and economic emancipation of the backward countries involved.

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The fourth chapter of the Treaty is dedicated to this conception. Included are the French Overseas Territories in Africa, America, Australasia, the Pacific and Antarctic regions. Needless to say, Tunisia and Morocco, having become independent, are not included. As these two countries belong to the French franc zone the Six will invite the Tunisian and Moroccan Governments to negotiate a Treaty providing for their association with the Community. An analogous invitation will be sent to the autonomous parts of the Netherlands realm, i.e. the Netherlands Antilles and Surinam.

Algeria, RCunion, Guadeloupe, Martinique and French Guiana, are integral parts of France, and with a few restrictions, are considered to be within the boundaries of the Community. Furthermore, the autonomous republics of Togo, Netherlands New Guinea, the trust territories French Cameroons, Belgian Ruanda and Urundi and Italian Somaliland form part of the associated Territories.

The most simple-and for the Six the most advantageous-solution would have been their complete inclusion in the common market together with all its rules and regulations. This solution, however, could not be adopted, as it would have been contrary to the interests of their underdeveloped economies. Their industry will continue to need protection over a longer period than that provided for amongst the Six. The predominantly fiscal character of their tariKs had also to be taken into consideration. Therefore a solution has been chosen whereby the overseas territories can share in the prosperity which will result from the merging of the economies of the Six into a single unit.

In drawing up the rules which will apply to this association, the Six have had regard to no other consideration than the requirements of the economic and industrial development of these territories and of the international status which applies to some of them. The Trcaty explicitly states that the object of the association is first and foremost the promotion of the economic and social develop- ment of these countries and territories and the establishment of close economic relations between them and the Community as a whole. The member-states have agreed to open their markets to these overseas territories in the same manner as they have done towards each other. In return they will only receive the same commercial treatment as the territory applies to the mother-country concerned. Although the Six will gradually abolish their tariffs on imports from these overseas territories, the latter have only to lower theirs gradually until the level of the tarilfs on imports from the mother-country is reached. The Six have furthermore decided to give palpable and concrete evidence of their solidarity with the overseas territories by agreeing to contribute a collective sum of over half a milliard dollars to a specially created Development Fund, to be managed by the European Com- mission. These contributions are complementary to what the mother-countries accomplish themselves. The responsible national authorities will, in agreement with the local authorities or with the local representative bodies of the populations of the territories involved, present the social and economic projects for which financial aid is sought. The size and method of distribution of this aid is laid down in a special convention which contains the modalities of the Association for the

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first five years. At the end of this five-year period a new convention will have to be negot ia led.

i n making this important decision the member-states have agreed to merge their individual commitments as administering powers into a single European commitment. This progranimc of financial and technical assistance is not an end in itselr but a means to obtain political, economic and social progress of the territories involved. This programme will not only accelerate their economic development, but at the same time will be instrumental in the development of their political maturity and in obtaining their political autonomy or independence. I t must, however, be strongly stressed that the whole process of political development remains the exclusive and full responsibility of the mother-country concerned. The prcamble to the Treaty, however, re-affirms the solidarity, which binds Europe (the Treaty mentions only ‘ ‘ E u r ~ p e ~ ’ ~ not the European countries) to its overseas territories and the determination to assure the development of their prosperity in conformity with the principles of the U N Charter. Thus the European Economic Communiiy has made it clear that it intends to manage its programme of economic assistance in a manner which is consistent with the legiti- mate political aspirations of the territories concerned.

The writer personally believes that from a political point of view the Six have arrived at a very sound decision that might have an important influence on the way of life of the populations of these territories.

Regardless of the fact as to whether it is a good thing or not to accelerate the political emancipation of the peoples still living tinder European tuition, it cannot be denied that the intelligentsia at the head of political activity in the territories concerned are continuously pressing for independence and that the adniinhstering powers, as a rule arc inclined to meet their demands as far as possible. Since in most cases political independence is expected to precede economic and social maturity, there will be a constant danger that the backwardness of those countries is blamed upon the forrner colonial rule.

A concerted effort of Western Europe to assist the overseas territories to develop the economy of their countries will enable them, in a way corresponding with their own culture, to adapt their communities to the demands of world economics. This action seems to be the more essential since at present the Soviet Union is showing a keen interest in the destiny of Africa, and in the chances which the prevailing circumstances i n this continent offer the Soviet Union to strike a deadly blow to Western interests and influence, and to have the African peoples espouse the communist creed.

To those who fear that the European Economic Community is creating a privileged position for itself i n the markets of the overseas territories, it can be pointed out that the economics of most of these territories are only in an early stage of development and although their association and the financial aid involved will accelerate the present rhythm of development for a long time to come the production and consuming capacity of these countries will not be of sufficient importance to cause any serious disturbance in the pattern of world trade. And

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even in those territories where this might be the case, the general increase in prosperity which is to be the result of the European Economic Community and its extension to the overseas territories will prove beneficial to world trade as a whole. Furthermore, important territories belonging to tlie conventional Congo basin, will continue to apply a non-discriminatory tariff policy in accordance with tlie treaties of St. Germain and Berlin.

The Association of the Overseas Territories constitutes one of the points against which sharp criticism, mainly on juridical grounds, has been levelled in the successive meetings of GATT.

Many delegations condemned this part of the Treaty as being incompatible with the provisions of GATT. The real reasons were partly economic, partly political. Many third countries are convinced that the consequences of the association will have an unfavourable effect on their pattern of trade.

Although certain countries agree that the establishment of the Community will bring greater prosperity to each member-country, they believe that only the members and associated members will profit from the extension ofdhe market to the overseas territories. The writer again believes that those who speak in this way overlook the dynamic'perspectives of a large expanding market.

Apart from their fears concerning the economic disadvantages to their national trading interests which may result from the implementation of the Treaty, the countries which were colonies in the recent past, showed as could be expected, a deeply rooted suspicion in the idea of association. As the somewhat dogmatic convictions these countries cherish do not tally with the belief that the Six, within the framework of their planning honcstly took full account of the interests of the underdeveloped territories and really aim at a speedier political, economic and social emancipation of the peoples concerned, these countries are inclined to regard the structure as a renewed effort to keep the other still dependant territories under colonial control.

It is the opinion of the writer that an objective study of the opinions prevailing amongst the responsible leaders of the peoples living in these territories will convince those, who entertain the suspicions just mentioned, that the association has most heartily been welcomed and has raised the hope that the realization of the national aims they strive at will be achieved at a quicker pace. If the findings on the writer's recent journey to Madagascar do not constitute a solitary case and prove to be representative for the way of thinking in other territories, then one can not doubt the outcome of such a study. In Madagascar at least there is all evidence that the national leaders place their hopes on the Association of their country with the European Common Market and on the prospect of larger financial assistance resulting from the operation of the Development Fund. The Madagascar leaders seemed unanimous in their appreciation of the chances the association offered to their country. The same is true for the French officials and business-men residing on the island.

The European commitment appears to ofleer a unique chance indeed to convince the leaders in the overseas territories that the best interests of their countries

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arc scrved by thc association-idea embodied in the Treaty. Moreover, since the different countries constituting the Community are individually scarcely in a position to meet the increasing financial and technical needs of their overseas territories, the Developnient Fund will rcnder a significant contribution in this field. On the other hand, the frce access to the Common Market with its ever- increasing consumption-power may have an essential influence on the determination of the course the overseas tcrritories decidc to steer. At the same time nothing will stand in the way of thcir developing their economies and establishing domestic industries. Since these will initially be protected by customs barriers, even against European competition, it is in the economic interest of the overseas territories to accept the opportunities offered to them.

One must not be blind to the fact that sentimcnt may eventually draw these countrics in the opposite direction. It seems all the more necessary, therefore, to do the utmost to convince those who exercise political leadership in their countries of the advantages resulting from the association. It might be recommended that this work of convincing the leaders should be left to nationals who are not citizens of the mother-countries concerned. In Madagascar the writer gained the impression that arguments, concerning the advantages of the association for the social and economic development of that country, coming from him as a Netherlander, had more effect than if they had been proposed by a Frenchman.

Cape Town.

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