Hostname: page-component-586b7cd67f-l7hp2 Total loading time: 0 Render date: 2024-11-25T14:32:34.453Z Has data issue: false hasContentIssue false

Agriculture, Manufacturing and the terms of trade effect of European Integration 1

Published online by Cambridge University Press:  17 August 2016

Get access

Extract

The purpose of the present paper is to argue that terms of trade changes may have been one of the major causes of the disparate nature of agricultural and industrial integration in Western Europe. During the construction of Benelux, EFTA and the EEC, the integration of trade in manufactures was favourably greeted by all interested parties and the mutual lowering of tariffs proceeded smoothly and generally ahead of schedule. In striking contrast to this, the integration of agriculture was blocked in two projects out of three by the determined opposition of the farmers of the high tariff countries and only was accomplished by the EEC at the risk of destroying the entire customs union. The model presented here opposes the differentiated product character of manufactured goods to the standardized nature of most agricultural products. It shows that this distinction leads to the presumption that the integration of manufacturing will be mutually beneficial and that the integration of agriculture will be detrimental to the farmers of the high tariff country, a pattern which is in close harmony with the observed events.

Type
Research Article
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 1976 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

1

This paper was begun while the author was a visitor at the Universite Catholique de Louvain and finished while he was a visitor at the Institute for International Economic Studies, Stockholm. He would like to thank both institutions for financial support and the referees for helpful comments.

References

REFERENCES

Armington, P.S., (1969), «The Theory of Demand for Products Distinguished by Place of Production». IMF Staffs Papers. March, pp. 159–76.10.2307/3866403Google Scholar
Arndt, S.W., (1968), « On Discriminatory vs. Non-Preferential Tariff Policies, « Economie Journal », December, pp. 971–79.Google Scholar
Arndt, S.W., (1969), Customs Unions and the Theory of Tariffs, American Economic Review, March pp. 108–18.Google Scholar
Camps, M., (1964), Britain and the European Communit 1955–1963, Oxford University Press London.Google Scholar
Deaton, A.S., (1974), « The Analysis of Consumer Demand in the United Kingdom 1900–1970 », Econometrica, March, pp. 341368.10.2307/1911983Google Scholar
Ghosh, S.K., (1974), « Toward a Theory of Multiple Customs Unions », American Economic Review, March, pp. 91102.Google Scholar
Josling, T., (1973), « The Common Agricultural Policy of the European Community », in The Economics of Integration, Krauss, Melvyn B. (ed.) George Allen and Unvvin Ltd., London.Google Scholar
Kemp, M.C., (1969), The General Equilibrium Theory of Preferential Trading, North Holland Publishing Co., Amsterdam.Google Scholar
Meade, J.E., Leisner, H.H., and Wells, S.J. (1962), Case Studies in European Economic Union, the mechanics of Integration, Oxford University Press, London.Google Scholar
Miller, M.H., and Spencer, J., (1976), « The Static Economic Effects of the UK Jointing the EEC and their Welfare Significance », Review of Economic Studies, forthcoming.Google Scholar
Mundell, r.a., (1964), Tariff Preferences and the Terms of Trade », Manchester School of Economic and Social Studies, January pp. 113. Reprinted in R.A. Mundell (1968), International Economics, Collier’Macmillan Ltd., London, pp. 54-64.10.1111/j.1467-9957.1964.tb01029.xGoogle Scholar
Negishi, T., (1969) « Customs Union and the Theory of the Second Best », International Economic Review, October, pp. 391398.10.2307/2525650Google Scholar
Patterson, G., (1966), Discrimination in International Trade — The Policy Issues 1945–1965, Princeton University Press, Princeton.10.1515/9781400875993Google Scholar
Petith, H.C., (1976), « European Integration and the Terms of Trade », Working Paper.Google Scholar