Hallstein, Walter.

English

Archive of European Integration

Speech by Professor Walter Hallstein, President of the Commission of the European Economic Community, at a dinner given by Mr. Robert Lovett. New York, 24 May 1961

'Ua",aallH.i$4' speech  by Professor l1lalter lrarrsteinrFresidentComrnission  of  the European  Dconomic  Community, 'dinner  g,iven by Mt'.Robert LovETr at  Nevr  yorkMay  24,1951As a Law  professor  and president  of  the cornnrisoj.on  ofEconomic Conmunity,  I  feel  Lonle  trepidation  about  putting  a  set  of  factsbefore  rnembers  of  the  investrnent  wor1d.  You have such an impressivereputation  for  cool,  detached sj-tuation  analyses.  I  recall  the  storyof, the  investment  me.n  trying.  to  concentrate  on his  itjal-l Street  Journalas he roCe into  f'lew:*orit on the  morning  train.  He was rather  annoyecl:i:n'son .'the  Europeanbecause ecross  the  aisl-e  three  professional  meneach other  in  rather  ]oucl and paesionate  tones.a doctor  and a priest.  The psychia.trist  saicl:  ilICave bad advice  yesterday,  and a minrl vlas lostil.Perhaps,  within  this  tale  lies  a  6,reat mora]  forworJd.  one of  the  incontrovertibre  facts  of  the  lg6ordence of  the  nations  of  the  V/estern worlcl:nothingr  I8s've  bad aclvj-ce  Jesterclay  antl a life  vras  lost.rrThen  the  priestsaid  solemn1yi"My  frlends,  I  6ave bad acivlce yesterday  and a  soul  waslost. trLowerj-n5 his  journel  slightly,  the  investment  man fixecl  them with  anicy  glare  and saidltrGentlemen,  I  Eave bao advj-ce  yesterclay -  and todayyou  will  all  have new customersr.r$rere commiserating  withThey were a psychiatrist,feel  sc depressed. fThe cloc  bor  said lttThat f  sus  of  the  i'rlestutr,.s is  the  interdepen-;.'e  have  ,  of  course,  been forgin6,  instruments  of  coll-aborationthrou&hout  all  the  post-war  periocl ,  which  in  total  rnake up what .we oall  .the  Atlantj'c  alliance.  I  refer  to  euch things  as  the  Marshall- Flan  pro'ranrwhich  helpecl Europe so that  eventua.lly  Europe could  help  hersel-f ;  the0r6anization  for  l;uropean Econornic  Cooperation  and certainLy  NATC.But  vrhile  we have  been creating  instrunents  c,f collaboration  for  .strength,theforceswhi.chrvou1c1sp1itUr5asunderhavemagnifi.ec}i.,,tremenclously.  [Jhat shal]-  be our  1.'o]icy to  ccpfront  them? I  think  we sha1l:find  our  answer in  our  recent  hi-story  which  showeci  us  early  that  we cannot.face  a  tyrannical',  sing,le-minded  gar6antua  rrat  oclds and  split  asun$errt  --  i'as Presiilent:Kennedy  has  saicl.  !,hat'lve nust  clo i-s tlraw on the  5reatresources  of  creativity  that  have always  characterlzed  our  !'.;est'erni ia:i: ".:t':f,ry.1,,./  r'..,2civilization.  ltie  rnust meet the  challenge  creat j.ve1y,  ciynamically  ancl inunison.  The instruments  of  the  past  must be refurbj-shed  for  the  future,and new instrunents  -  more sophi.stlcated  ones -  must be evolvecl.'Are  we meetj-ng the  chal1en5e?  I  arn  c,anvincecl pe.rticularly  from  myvisittotheUnitedStates,thatweare.YourGovernmenti-smakin5a￿￿searchin6  reappraj-sal  of  the  strength  ancl  resources  of  the  ;rtlantica].1iancelanilyoura]-1ies.inEuropeareresponc1ingJ-rr]<ini.l.Ibe1ievethatwe can now begi-n  to  discern  the  nel./  ivave  cf  crcativity  that,,  as I  eaylis  necessary for  the  n€'/ charllen5es that  ccnfrcnt  '$.  :0neofthenewresourceswhichyle3rfeca1}ingintobein5'oneofthesources  of  strength  for  t'he liesi,ern allianee  ,  is  uncloubteclly the  EuropeanCommunity. I  say  this  not  only  be  cause r  am j.ts  aclvocate,  so to  speakbut  aLso because f  srnce'rely  believe  that  it  is  of  capital  irnportarrce.Le5'a11y speaking r  as  you Lrr.,,v  1 Li,.  -urope€1i'r  Co,:u:':u:tity  comprises  threeffCornmunltiesrr  the  European Coal  ancl.  Steel  Cornrnunity, set  u.p in  Ig1.A, andtwo others,  set  up in  1958:  Errratotn, the  European .'tomic  Energ,y  Cornmunity,and the  Comtiton  Market ,  the  Europe  an  Econoclc  Cor:rmr:nity,  of  ryhose executive  ,Commission I  have the  honor- t<; be President,  Let  n:e  rapicly  try  tc  giveyou  what  rnight  be  terrned  tlie  rrprospectusn  of  thcse  t,hree  -  r,vhich  arereally  only  ]'rseparate  aspects  of  a  single  Eucpean  comnurrity.  ,,,The creatlon  of  the  E\tropean Conmuni-ty  was plainly  a response  io 'i'.:tdeficiencie  s  lvhich hi-stc'r'y hacl  :':acle  'emi::e  ntly  c1e  ar.  In  both  econornics  .,,: anJpo1itics,thestrrrcturec.rft,heinc.[ivii'rua1ttation"a1statehadprovecl￿￿￿￿￿￿inadequate  to  secure  us  the  necessary  ma.6-nitucle  of  economic pro{iress  ancl i: po1itica1stabi1ity,asindeecihac1internabicna1cooI'€rationofthetraciitional  kinc.  'Ihat  is  why the  Treatj-es  oi' Paris  and R<.rme,  establishin6the  European  Comtnunity,  6ranf;  Lc  :ts  instj-tutions  a  forrrr of  inclepenclent u -.authorityt  that  is  to  say that  in  a  srrrpr.isrni  ranLe  of  actj-vities  the  ',.,,conntuni-ty is  einpowere'c1  tc  act  lrithorrt  necesseri-ly  har-ing  thc  agreernentof  all  the  natj-onal  statec.  ,rhe Cc::ir:ion  }ia::l<et  T'rc.aty, fc,:  instance,  Ie,avesus  Sreat  leewety for  prallttatic  inncvabicit  es rre observe  the  evc,lution  ofa  comlnon  market  fcr  all  goods;ir:<i  se:vices.  But  aclcij-ticnal-Iy  it  glogrg_eg ,'onustheestal.].ishmentofcoll?!l:.r;:c1ie:.esinsr:chfie1t]sasinterna].￿tra.de,  external  trade ltranportation  rancl.  alr.iculture.  ,, -,,/ '  r, i  t-3The Buropean Economic Communlty isMalketr',  which  hi6hlights  the  fact  thatas well  as quota restrictions  for  tracie.between  a  custons  union,  which  1:rinrarilythe  member  states,  and an economic unionnuch  further  to  coorclinate  and unite  toeconomj-c  policies  of  the  member  st,ates,popularly  known a6  the  trOomnronwe will  eliminate  customs dutlesI  must  enphasize  the  distinctionpropag,ates  trade  advanLages arnong,  which  may do the  6arne  but  €;oesthe  greatest  extent  possible  ther;e are  an economic union.I  do not  need to  telI  you that,  for  better  otr for  worae,  econoniceand politics  are  inevitably  intertwinecl.  In  our  case,  it  certainly  hasbeen for  the  better'  Never before  in  peacetirne,  have European nationsengaged in  such an exercise  of  intricate  politLca1  fusion.  *hen  you considerthedifficu1tyliithwhich1e5is1ertionissometimesfj-ttedtothevariousregions  of  your  own Unitecl States,  you can envision  the  cooperation  ancl5oodli11  required  of  six  European statee  to  act  in  concert.  our  economicintegration  has already  caIlecl  for  close  policicel  co-orclinfrtiot  in  mattersthat  range  from  harrnoni-zin6 paid. holiclays  for  workers  in  the  varj-ous  statesto  the  methods of  negotiatin6.  internaticnal  tracle agreernents. This  j-s trulythe  beginninl  of  the  political  integration  of  Europe.  Our Trea,ty directsus  tc  establish  ever  tiE,hter  lines  of  political  co-ordinertion  anong thenember states.  In  tlie  ultinate  cver  the  yearsr, we believe  that  you witlsee the  homoCene  of  somethin5.  like  a unitect  states  of  Europe.We have  5reat  reacurces  on whj-ch to  builcl.  Our Cornmunity has  apopulation  of  sone  1/O million  persons  -  not  far  behincl the  population  ofthe  United  States.  Our active  worki-n5 population  ls  scmeurhat  lar6er  thanyours  about  73 rnillion  compared with  en  averaEe  of  abcut  lO  millionreported  fol  the  United  States.  These people  live  in  an area  of  approxinate-1y  55OrO0C  aguare rniles,  roughly  one eigirth  of  area  of  the  Unitecl States.We  are  the  worl.drs  largest  trader,  and the  worlclfs  lar6est  merrket for  rawmaterials.In  the  paetr  our  ecunonty  strug6;1ec1  against  the  disa.dvantages such as warand the  fragmentation  of  merrkets.  ThrouE,h integration  we have movecl  aheaJirnpressively.  our  internal  bredr,'ro6e  in  1$5C to  li 10 billion,  an increaseof  287i' over  1959.  Our imports  total]ed  $  19.?  bilIion,  an i.ncrease  of  ZO  %.,/  ,,, ':1'.-i::.ii:it  i.:;:-4Exports  fron  tha  Comrrion  Market  in  196r  were  ve.lued at  $  19.6  bi.I1ion,n 14 % jump over  the  fgjg  valuation.The contrast  between our  sta5e  of  develcpnrent and.  that  of  the  UnitedStates  shows up,  howevcr,  whcn we compare our  Erosg national  procluctwi'th  yours  -  keepin€  in  mind  that  our  pcpulaticns  are  not  widely  clisparate.Our Lross  national  prociuct  Last, ye&r was aroun.-r  $ l8o  billion,  an increascof  7 /'  ovet  1959.  But  it  r,rust Lre  measurccl against  your  tross  nat1ona1product  whj-ch the  Conmerce  Lepartmeni  reportecl  at  i:,  ,O3.?  biL]ion  for196c.The si-gnificiince  of  these  business  inrlicators  is  the  fcllowj-ng:Eurcpe  has  left  behincl  that  pcriocl  vrhen  cur  wellbeing  clependecl  directlyon  /'inerican  aid.  In  thc  Cornmon  Market,  vle h--ve founcl the  ins.trument  toassure  economic progress  and,  tci a 1:rge  extent,  political  unificatj-on.Ne  vertheless'  our  standard  of  livi-ng  remains  nuch lower  than  yours,  cles-pite  startlinL  proLresE -  a fact which  io  cur  heritage  from  the  pcriod  ofinsula.r  ne.tlcnalism,  frustrate  cl cornpetitj,on anC tbe  recurrent  injury  ofwa-r.I  ernphasizc thet  we nc  longer  ne  eri ..lirect  ..me,rican  aic1, brit  I  shoulclnot  l-ike  this  tc  bc  interi.retecl  in  any  sen6e as a rcjectic.,n  of  Americaninvestltent,  lvj-th r.11 that  it  i-mplies.  v,  u kncw,  as  I  tlc,  that  Americaninvestment  in  Eurupe  is  tninuscul-e  rouLhly  about  t  ;d -  when comparecl withour  cwn annual  Ercss  investr,rent.  But  this  j-nvestment is  extremei1y  importantto  ur  when counted in  terms of  the,technclogical  stimulus  it  brings  tc,u6rOf  courser  the  United  States; must do lvhat it  has  tc.r  clo in  the  tax  andmcnetary  fields,  but  we would  be  greatly  concerneC if  the  flow  of  t,echnolo-5ica1  innovation,  knowhow  and patent  licences  vrere tc  be climinishecl.  i-nany  substantial  rlegree by  clornestic tax  imperatives,My ttpros,-  ectustr  on  the  Buropean  Eccnomic Comnrunity so  f ar  hesemphasizecl  the  mors' conventlonal  lnclustrj-al- indices.  There is  utill  anotherneasure  of  our  prcEress  and econcmic self-confidence  which  I  shoulcl citeand  which  vie fake  as  prccf  that  the  Common  lvlarket is  here  to  stay:  lVehave speeded up the  ope'ration  of  the' Rorne  Treaty  by reducinl  internaltrade  barrj-ers  aheacl  of  scheduJe.  I  think  rt  si5nificant  that  bhj-s was,t../  ,  r.: -2-i'not  mer,ely'an  adninistratLve  declsion  butprivate  bueiness,Thc European  businessman,  runnin6.  aheacl  of  the politiclans,  wantsto  enjoy as qulckly  as'possible  the acivantages  of  an unreetricted  comruonanarket.  !'iihen  the  Trea'Ly of  Rome  was writtenl  there  was 5reat  npprehensionabout  the  danS.er  of  lowering  tariff  barriers.  Thankfu1ly,  mo6t pecplenbw look  at  this  nct  j.n the  lieht  of  cj-scarclin6,  safeguards  but  of  seizingnew opportunities.'  We  hope that  our  liberal  action,s  create  a wave cf  fcrce  that  rollsbeyond the  boundaries  of  our  own Community, You will  reoa]l  that  theEEC  was the  first  to  accept  now Secretary  of  the  Treasury  Di1lonrsproposal  for  tariff  negotiations  to  be6in  soon in'Geneva.  lVe  furtherproposed  that  these  negotiations  be fcllowecl  by yet  another  rouncl to .: lower  world  tariff  barriers  to  the  ful-rest  extent  poseible.  ,  ,.' .,You may well  say  that  up  to  now I  have  been  showin5  you  oniy  the'  ' .  -rosy  side  of  this  new creat-ure  i  the  Iiuropean  Economj.c Communiiy,,  I  ,ltnow  ,fthat  there  are  some in  this  pcruntry who stilr  feay  that'th"',,88c,ma..,l ,r,'1'.',.operate  to  the  clisadvantage of  the,Unifecl  ,States.  i  Jab'e:l,the.se  as;{hs.  ",,econotnica11ytirnid.Theyareover-aI.prehens1veaboutthede5reeofconpetition.they  will  face  frotn a resur.gent  Europe:unitingtfo*-economi",,,i.a.responsg ,to  the  deslres  ofprogress.,lVe  e'an only  ask  them to  acgnowl-eclge  the .{mbrovement  'n  - ;,",.-tt'. -:.  --  r'*.--c  *",tJ1,expoft  re:eord'tast  year  anel cite  tuch  thines  as.the.cverseas  ealcs  o:f:':.,.i' '  :  :  I  i  j :  '  :'-  -''  "lt"  :  '  :t';t  l'':t:t.your. compaot oars  as  evj-dence that  the  Unite4  Etat*ut,ir,tq>,,r*,Sb  .r,ce'fuJ-'  ,,,,.:  . .tetructural  probletns  not  only  for  the Unitecl States but  fo"  uif  r,on-*urU*"'countrieB,  io*'as  we nay establish.our  ccmmon  exteriiai  t"iift'rui,tirira  'nations,  they:still  will  be',confrontecl  by a.  tariff  which rnemiber -  -  ' ','iwill  '€scape. 0n the  other  .liancl,.I have pointed  out  lbat  eur  economitc.  .,  .union,  founded on princj.ple6  cf  internal.  and external  tariff  recluctions, ..4-is  the  very  soulce  of  our  economic  ac-hieve.ment. It  is  our' means of :  ; ' : 1' ;e:stablishing  a  conmon markel  of  t?O  million  persons  which  will  6"o*  into.  -::  ,  .  i.'..an ever more profitable  outlet  for  the  goocls  of  aLl  nations.  ULtimaltetryr.:.?. ,t/ ,.. ii..f  ...  'r:'i:  nore consultatj-on  on a broacl  front  by the Western  nations'in  oruur to' lt't',',r'..',:  I  .tt'  : .. ','.l ,nake  national  economic poricj-es  rnore responsive  to  the  "rqui"**ents,lof.  the  :  ,tt.l.'1. . :.-':, ' ,:.:....:.l.'lr.t..rs.'foc1hardytothinkofAmer1ca|sb+1ange].ofpaynrents￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿as a purely  American probleit.  The clollar  unc'er6ircis our  lvest,ern  monetary  :.: ,..,.,;,system ancl the  dollar  cculil  onry  be wcakened with  Erave "unuuouuncea'fgr,  ,1" ,.t,  are  nanv thi-ngs which  we can anct  must cr,ntribute  f or  ;";;";  ;;";;;;r;;;'"  , ' ''t.  in  internationat  pn^yntents.  Fersistin6  rnstancee  cf  tracle  cliscrj-nrj-nation :  ,, ,'lt-'."  t,"  m,rst bq  efeminated.  vrle  rnust take  a  Liberal  approach  to  imli:orta,  neiri-n*'" t.='1Jipayment must be accelerate'd,  e.nc1  this  is  alreetcly occurrinl.  ,ie ruust finct ',',.'  ": j'' "'l ,,,  :::,*eans of  better  coordinati  ng  este'rn aicl tc  rievelapr-nE.  rrutton"  rro "'l'.-r,,,r,.].......i..1tha.t-we:e]cpendourrescurcesinthtititcstprude￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿:n:..':u:t han,j ^n:.:"  :":"l"u.y what rhe.  r*rt  is  ,.r.in6  ,  w; ;;;;  ;r;;;;  . . -i.  , a llon level  of  industrial  activity  in  Duropc throuih  wise ,busrneu" "ycu'  ,,,-,=,,:Aniericars  exports  ancl ease hcr  balance  of  rlayments problem.  The same  ,  ltlencleavourvli11improve.marketsforbasicrnater1a1sfrornthenon-￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿:iatinetria],izecl  countries,  wbo need our  aii  but  whc,  in  the  1on6 run  neecl '1,,''iimost to  sell  their  proclucts to  have the  revenues to  develcp  thelr  economieui,,lt.l'' . rn,oonnexion  wrth  businclss.  cyctre yolicy*  r  raight Fc"use  here  to  mention,'  r..,isonrethinS  that  may be  of  j-nterest  to  you,  lle  ha.ve a. coiiimittee  of  Expe.rts  .r'=lon the  iiusiness'cyclc.  rt  opcra.tes on  the  premise  that  prudent  a4alylsis ':  :.''-1i'nay'permit  us  to  avoltl  drastic  fluctuations  that  in  the  past  nu*** loo  .,,]..,',|.,,.jnay permit  us  tc  avolcl drastic  fluctuations  that  in  the  past  lvere f;;-- ' ,'.1ctocilely  e.cceptec as  a matter  of  ccurse.  As an exarriple.cf this  epproach,  ..l.''';.ijtl:.  totts  conmittee  of  Experts  helcl a rneeting re.cently  in  collabora-tion  ,,i ,, ti.llvrith  experts  froin the  Mlnistrieo  of  LAbcr in  the  six  member  states.  They "orr_.',i,i1aidered  a draft  report  fron  c;ur Oorrrrnissionrs  staff on the manpower  '  i.,,-i,v..v  u.L(rr}Jvtrsl :  ...,...:  ;.,::;::t'  r'ti.-  ^--!'!  -  -r  h  ' :'ti.:,.,,i, situation  end  t'he outLook  for  the'la.bor  nrarket  j-n the  comrnunity in  196].  ..'',,.:.,,t;rhe s,oal  or  the report  is't.  proposc  vrays  or  achievinr;;";;;;;t;;;;"-'  , '"'riour  labor'marketi  A final  rei:ort  on -!his  subject  is  ,ro* being  prepared. ro", 'l -i.iiour contmission  ancl  r  hope that  eventually  the  cr,ntents wil-l  be evailab1" 't-.i,  t'j ,  1':  : -..,, ''..., r  r/, jr.l  li/.,|  ?  ,i  ,.,j...,'l.....l,  :.,.,-  .  :'.',  :  ;,,.il.:',.1'.i:':..:r-:.,i:..:.'fi..:r.i.;;:r,i.=,_.,.  .:,,::l.rj;,j,;ii.:9-as .you',rknohl  despite  seme  &reas of  uneurploymentheavy labor,'surplus rot  :,auo1 pupply in  the  lVest-European  countries.  fo  a }arge  **tuntrl  ou"productive  capacity  depends  on the  avail"ability  of  adequot" *uo:power,',  fhis-r  of  eourse,  is  onry  an exaniFre  of  the  fierds  inbe6innin6  to  face  our  difficultLes  by coJ.laboration  -  toas :lt  were,  and tc  pool  the  resourses  for. solving  then.othersi  and above arl  we ar.e  becominE  mer.e  &nd more awareso lre must by  the  nature  of, thinSs  consider  our  problertrsin  Enuope in  conJunction  qrith  yours.  Tlretl  in  a wercl, J.sso much importance  to  the  neru  OiEeD  *  rvhat rny fricncr, .Jeanilthe  econc'nic conscience of  the  free  lugpldrr.isWe.bo.

Speech by Professor Walter Hallstein, President of the Commission of the European Economic Community, at a dinner given by Mr. Robert Lovett. New York, 24 May 1961

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