Spain towards an integrated Europe: adoption of the EEC's commercial policy and its effects on main exports from Latin America
Date
1984-01
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
The emergence of the European Community as an economic cooperation between countries, leaving aside the political aspects, to promote the harmonious development of economic activities and a progressive approximation of the economic policies of the member states, constituted the central purpose of the first draft of the Treaty of Rome. To accomplish this, the treaty contained provisions for the establishment of a European Common Market which at first meant the abolition of trade tariffs among members or a free trade area, a further bargaining of customs union policy, unifying tariffs against outsiders and finally the abolition of restraints on the internal movement of capital, labour and services characterizing a common market.
In 1977, twenty years after the first step towards economic and political union was taken by the six founder members, Spain presented a formal solicitude for its adhesion to the EEC. With the prospect of this integration, Spain and Europe entered in a new stage in its relations, but of the multiple aspects that this adhesion embarrasses this study intends to take into consideration only the commercial aspects.
Although the objective that the EEC intends to achieve at the end of the integration process is that of a United Europe playing an important role in the whole of the world's political groups, at the time being, and in a strict sense, it is nearer to a Custom Union and a Common Market than it is to an Economic Union.
A Custom Union necessarily implies the immediate adoption of a common commercial policy as it requires the setting of a Common External Tariff (TEC), the abolition of national tariffs and the disappearance of a national custom policy conduct.
From the commercial viewpoint, and facing other countries, the Community has an identity perfectly delimited/which in turn brings logical consequences derived from its importance in the world commerce and of the weight of its communitary decisions in international forums. We should not forget, that commercial policy is having an increasing major role in countries external policies.
The peculiarity of Spain in the international context is characterized by its entailment to two continents - Europe and America - • This fact makes her stand as a European country with special interests in Latin America.
Spain politically, culturally and for its geographic location is a country that intends to take part in the project of unifying and constructing Europe through its adhesion to the Common Market. In this respect, it can be said that Spain's entry in the EEC is a generalized aspiration. All social, political and union forces agree in the taking of this step.
In the other hand, another determining aspect of the Spanish identity is the special attention given to the American south continent being this the most outstanding feature of the country in the European context.
Spain and Latin America's bilateral relations are economically significant showing important beneficial achievements for both areas, that could and should develop further. Through these exchanges, Spain contributes - economically, financially and technologically, - within its possibilities, to the advancement of the continents development, yielding at the same time its intermediate position in the productive and technological levels of the world's scene.
In the commercial aspect, the proportionate share that the Latin America block represents in our exports amounts to almost double of what the Regions proportionate share has within the extracommunity exports. The same accounts for imports.
Furthermore the expansive trend undergone by these relations in the past years becomes more significant as it reflects the opposite movement between the economic relations of the European Community with Latin America which have fallen into a clear recessional situation.
The financial relations show in the same way the favourable attitude towards the continent. Since 1977, two- thirds of the Spanish external direct investment have gone to Latin America, and also to this area more than half of the granted credits for exports.
With regards to technological improvements, Spain conveys and yields in its relations with Latin America a supply of its own technology, breaking therefore in this sense with the traditional technology-demander position that Spain has in the world market.
Although all this does not mean that the EEC does not continue to be our main counterpart in our commercial exchanges, with what has been said, the relevance of the effects that, in the relations of the three communities, would come about with the entrance of Spain in the EEC, will be an important aspect worth looking into.
The necessary changes needed to adapt the Spanish custom union structure and commercial policy to the one prevailing in the EEC countries, and the acceptance of the <<.<l9'nere. communitaire>)~ in which, a regional agreement policy, which may not be favourable to Latin America, is to be included, will certainly affect in more than one ways the present state of affairs.
Our major concern will therefore be the static effects of establishing a Common Market with the Community but with regard to third countries, in this case, the Latin American block.
Viner establishes the key concepts for the analysis of these effects: A Custom Union does introduce free trade but limited to the members concerned, for the rest it involves a discrimination since it allows members to displace from their market, imports from outsiders.
The direct effects, leaving aside the consumption effects, would be two, those resulting from the trade creation, increasing efficiency of world production and those of' trade diversion, reducing efficiency of' world production.
On the basis that the dynamic effects are found in the existing imperfect competitive conditions of the national markets, two possibilities emerge: competition may be intensified and unrealized economies of scale may occur.
Although these effects may be far more significant and important than the static and ex-ante study of the effects, the fact that a number of further implications would arise, external economies, technological stimulus, greater investments - increase the difficulty of the measures.
Taking into consideration that the EEC's economic integration would yield substantial benefits, a number of studies of the static effects were made proving how, on balance, it had been a favourable movement towards world efficiency.
The crucial issue becomes therefore in determining, how far in excess are trade creation and trade diversion from each other in the integration process we will consider, becoming this the central purpose of this study.
Description
Keywords
Commercial policy, Export, International trade, Trade, Latin America, Trade policy