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Political Implications of US‐EC Economic Conflicts (II): Atlantic Trade: Problems and Prospects

Published online by Cambridge University Press:  28 March 2014

Wolfgang Hager
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THE 1960s APPEAR IN RETROSPECT AS THE BELLE ÉPOQUE of the postwar era. The IMF— a Cinderella while convertibility remained limited to the EPU-area—came into its own, as did the GATT with the Dillon and Kennedy Rounds. There were plenty of storm clouds, however. The monetary system, for one, was built on the shakiest of foundations. The gold/dollar parity had been fixed by an Act of Congress at $35 in 1933, a quarter century before convertibility became a reality. Four years after convertibility, in 1962, the gold pool had to be set up: a massive commodity agreement between the six richest countries, with the Bank of England as the buffer stock manager. That agreement limped on to the mid-1960s by the grace of the Russians, whose bad harvests forced them into substantial gold sales. After that, the combined effects of American arm twisting and the hubris of highly dirigiste central bankers shored up the system, until its final collapse in 1971.

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Articles
Information
Government and Opposition , Volume 22 , Issue 1 , 01 January 1987 , pp. 49 - 63
Copyright
Copyright © Government and Opposition Ltd 1987

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References

1 Strange, Susan, International Monetary Relations 1959–1971, London, 1976, p.77ff.Google Scholar

2 See e.g. Cable, Vincent, Protectionism and Industrial Decline, London, 1983, p.240ff. and passim.Google Scholar

3 See e.g. Beigie, Carl, The US-Canadian Autmotive Agreement: An Evaluation, Montreal, 1970; and, more positively, Strange, op.cit., p. 268.Google Scholar

4 Evans, john W., The Kennedy Round in American Trade Policy: The Twilight of the GATT?, Cambridge, Mass., 1971, p.299ff.CrossRefGoogle Scholar

5 Cf. Susan Strange: ‘The basic premise that state policy should, or even can, be based on the single criterion of maximizing efFicency is demonstrably false. . . Efficiency can be given priority only if the provision of security, internally and externally, is taken for granted — as indeed it is by many if not most liberal economists’, op.cit., p. 236.

6 See e.g. Balassa, Bela, Trade Liberalisation among Industrial Countries: Objectives and Alternatives, London, 1967, p.73ff.Google Scholar

7 GATT, International Trade 1983/84, Geneva, 1984, p. 91.Google ScholarPubMed

8 OECD,The Case for Positive Adjustment Policies, Paris, 1979.Google Scholar

9 ‘For a larger discussion see Wolfgang Hager, ‘Competitive Modernization: Industrial Policy as a Key Area of EC Development’, CEPS Working Documents (Economic), no 14, Brussels, Centre for European Studies, 1985.

10 For a brilliant summary of a European view see Konrad Seitz, ‘SDI — die technische Herausfor-derung fuer Europa’, Europa Archil), 40/13, 1985, pp. 381–390.

11 A good example is in the European Commission’s ‘Vth medium-term economic policy programme’, European Economy, no. 9, July 1981, and subsequent Annual Reports in the same journal.