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11/12/1948 - Benelux (The Netherlands, Belgium & Luxenburg) by John R. McCarthy

INSTITUTE OF CURRENT VJORLD AFFAIRS JRcC Boulevard Raspail Paris France ovember Walter S Rogers Institute Current World Affairs Fifth Avenue New York N Y Dear Rogers This newsletter about development status today Benelux economic union Its status tomorrow I somewhat different because nature something which constantly advance In respect affair other respects Spaak Belgium pointed adverse critics union fearful making lasting commitments cannot enjoy advantages matrimony while retaining antages bachelorhood To happily married critics should answer enough Benelux divided three almost equal parts Netherlands Belgo Luxemburg nomic union operative Since other Full conomic union Benelux scheduled issue faint cries January conceived September become through three preparatory stages tariff community which existed since January customs community being established complete customs union result consolidating furthering gains first stages The physical oharacte ristics which distinguish three stages follows Tariff community substantially identical tariff import duties assuming stable relationship between Dutch florin Belgian Luxemburg francs which latte established pmrties applicati On against goods coming outside tariff community No import duties levied great majority goods traveling member community another But othe____r duties levied below Customs community uniform customs legislation regulations adopted parties Cus union duties other strict import duties excise duties transfer turnover taxes uniform application against goods coming outside customs union substantially eliminated intra union traffic Article ITO Havana Charter which defines regulates activities customs unions fully complied In addition hindrances intra union trade import licenses essential measures relating sanitation morality public order eliminated This three process considered vacuum looks logical vacuum removed realized States U S economic tightly represents years Belgo Luxemburg called economic union advanced beyond The obstacle excise duties uniform provided under internal excise taxes uniform Yet taxing units guard jealou their prerogative constant manipulating excise taxes secure maximum revenue minimum public resentment In Netherlands cigarettes instance expensive because excise person importing cigarettes import excise equal internal excise Belgium imposes excise corresponding excise The countries areed uniform import cigarettes blistering their palms trying hammer compromise excise Delaware New York would difficulty What tariff community which existence January practise It means somewhat cynical reactions Benelux importers somewhat oversimplification Benelux press releases would iadicate It means previous Belgian Luxemburg Dutch tariffs scrapped The common tariff based tariffs interested parties commodities average rates adjusted prevailing price level But important changes format administration neces there probably unprecedented amount cussing customs officials Duties computed al0rem basis although Belgium Luxemburg slways specific duties commodities listed tariff appear methodical order proceeding simple materials compound manufactured articles recommended League Nations although Netherlands always alphabetical order A promise worked regarding overseas territories since Belgium Luxemburg admit goods Congo while Netherlands preference goods coming Indies certain wares admitted overseas territories others dutiable Certain problems however allowed compromise result import duties products still differ tween parties Where tariff agreements third tries instance unilateral changing practical negotiations opened countries concerned meanwhile stands The Dutch Belgians eschewed perfectionist approach hazard exceptions uniformity destroy house building There little water cellar later If cannot reach accord agree disagree problem The effect abolition customs almost trade withir tariff community slighter outsider might expected partly because complicated export import licenses still force In additi certai restrictive prige agreements In theory example Belgium should flooded Dutch potatoes because Dutch surplus agricultural prices generally lower Belgian But practise Dutch potatoes Belgium minimum price which calculated protect Belgian famers Some these price agreements probably retained under economic union Since Luxemburg protected poduction breadstuff animals potatoes butter manner Finally different excise duties similar equivalent cha0ges internal taxes still effect country Benelux growing measurements ITO Charter The complexity problems revealed three preliminary stages reminder least prudence charity required success rebuke delegates among those groups convention Rome functioning United Europe tomorrow What final stage economic union In memorandum submitted first meeting Study Group European Customs Union November Brussels Benelux countries defined their ultimate rather inade quately follows Economic union which contracting countries merge their policies regulations economic financial social industrial agricultural matters order remove impediments exchange commodities methods payment capital labor territories within their econo control Such merger entail economic integration thorough going difficult corresponding political integration avoided In order prevent widespread migrations workers comparatively depressed areas paratively prosperous price levels higher Belgium Luxemburg social security provisions somewhat attractive Netherlands uniform In order facilitate movement goods across borders Dutch florin stabilized currency controls quantitative restrictions imports exports eliminated The aggregate burden direct taxation three countries annual level Dutch imports Belgium above without import duties Dutch would probably Belgian commodities franc credit equalized A common policy followed financial particularly investment matters including public works range partnership necessary control credit pooling statistics The complex differen duties charged Antwerp Rotterdam reconciled tolls effect rivers myriad canals common members union elimi nated uniform To accomplish these pieces political machinery already installed First illegal throughout Benelux expand existing facilities build about dozen chosen industries without permission three governments second important three cabinets granted power amend common tariff without consulting their national legislatures which would presumably ratify changes later Some provision latter essential event urgent tariff amendment necessary effect gives executive Benelux considerably discretion President Truman enjoys under Reciprocal Trade Agree ments Act As Benelux hacks deeper jungle technical problems discretion allowed technicians question whether govern which surrendered basic powers national economy international administrative boards remain government It reasonably asked three countries expect union which cmpensate concession sovereignty Their expected benefits economic political Economic union expanded inter markets Benelux productive enterprises clearing albeit painful process economic marginal enterprises shored restric tions still force rational organization production intensive division labor enormous which outstanding feature sovereign tallst economies eventually higher standard existence concerned In external relations Benelux comprising million people almost twice number nists world largest trading units bargain effectively tries alone She Will endowed large credit modern merchant marine world greatest ports other factors which rendered effective intramural competition Politically Benelux important because nalize effectively isolationism Low Countries The Netherlands Belgium Luxemburg convinced neutrality withdrawal world politics cause They every intention using their eagerly awaited improved economic status themselves political force reckoned What progress toward economic union determination compromising ability while still exile England signed controlling vention September stuck Benelux since Two these Spaak Belgium Bech Luxemburg still office still intimatel associated operations Benelux A protocul their convention signed order provide efficient ministrative machinery realiStic timetable A Cust Administrative Council Council Commercial Agreements Council Economic Union cmmon secretarlat general carry In addition called Benelux mittees three countries private enterprise liaison organizations between businessmen their governmeats unified undera central Benelux Committee which Sits Brussels meets regularly Dr E J E H Jaspar Secretary General currently termed inaccurately accor their definitions Netherlands Belgian Luxemburg Customs Union I haven Dr Jaspar I I those initials stand How extent Benelux realized great importance stern Europe which putting trade barriers storage duration arshall Plan again Benelux fails It generally accepted Belgium Luxemburg Netherlands their history political cultural their equality domestic populations their economic similarity cannot economic union other countries either And businessman world which international cooperation perhaps unfor tunately first economic perish Economic problems solved devote important perhaps after hundred yearsproduce Atlantic culture which place sunlight alongside great cultures Sincerely Received New York II I