Whatever its evolution beyond a mere free trade zone, the European Union is nonetheless the product of decades of trade liberalization, today uniting 500 million people in a common market. The trade liberalization seen in 19th century Europe, though it sharply reduced barriers to trade, did not go nearly as far. While the EU is often spoken of by its strongest supporters as primarily a product of internationalism and a shunning of nationalism after the Second World War, the history of its organization paints a different picture. Especially at its founding, as the European Coal and Steel Community, the process of European ‘unification’ comes across as the story of nations only reluctantly coming to terms with the economic and security potential of a free trade union, often interpreted in terms of national interest.
Post-War Europe
Following the Second World War, much of Europe was in shambles, including France and the Low Countries (Belgium, the Netherlands, and Luxembourg). It might not be obvious that these areas would see their industry and infrastructure destroyed; after all, they were overrun so early in the war that one might think they would be spared its most severe destruction, just as happened in Denmark. However, the liberation of these regions in 1944-45 and the intentional destruction of ports and railways by the retreating Germans left its mark.
In France, civil servants in power after the war set about planning an economic recovery but always returned to the challenges facing the coal and steel industries. Much of this industry and the coal fields which supplied it with energy were located in the Ruhr, a heavily industrialized region on the German side of the Rhine. Following the war and the creation of four separate German occupation zones by the Allies, much of this industry and natural resource wealth was incorporated into the French occupation zone.
The French planners, including the diplomat and former banker Jean Monnet, pictured above, had two objectives regarding these resources. First, they should be readily and freely accessible to French industry and second, they should not be available as weapons to be used against France by Germany in any future war. The first objective was seen as crucial for getting French industry back on its feet and competitive internationally and in practical terms it meant the detachment of the resources of the Ruhr from Germany. To the French, it was imperative that these resources be on the French side of any tariff barrier. Also acceptable to the French was the separation of the whole of the Ruhr from the rest of Germany and its placement under some form of international control with the crucial caveat that French industry must have free access to its resources and industry.
Thus, the “Monnet Plan” for French economic recovery consisted of a focus on rebuilding the competitiveness of French heavy industry by guaranteeing free access to resources previously under German control. To see the plan in action, one only needed to look farther south, at a region called the Saar. This resource rich area adjacent to France was actually made a French protectorate and did not reunify with the rest of West Germany until 1957.
Nonetheless, in 1947, the British and Americans united their German occupation zones and the creation of West Germany was just two years away. The Anglo-Americans were quickly coming to the conclusion that a reconstituted and independent Germany could serve as an ally against communism and a bulwark against the rapidly falling Iron Curtain. Thus, the prospects for internationalization of the Ruhr, or some form of soft French control over these resource rich regions, as existed in the Saar, was fading.
“The United States will not support any encroachment on territory which is indisputably German or any division of Germany which is not genuinely desired by the people concerned” – James F. Byrnes, United States Secretary of State, 1946
To the French, the best alternative to control of the Ruhr was a free trade zone encompassing the countries along the Rhine. If the French could not guarantee that the resources and industrial products of the Rhine, especially coal and steel, would be on their side of any tariff barrier, giving their industry an advantage, the next best thing was no trade barriers at all. As such, entry of the new West German state into such a free trade zone was seen as essential to French acceptance of that new state.
Schuman Declaration and the Treaty of Paris
There was support in Germany for this alternative, as many, including its new chancellor Konrad Adenauer, saw it as a means of reintegrating Germany into the rest of Europe. It gave them a way to align themselves with the Western Allies against communism, which he abhorred, all while saving face and giving the German state regained independence. They found a like-minded man in the French foreign minister Robert Schuman.
“The first period of European integration has ended. Its purpose was to ensure that a war may never break out between the European people… The objective of the second period of European integration is to ensure that Europe and the European countries retain their value, relevance and their standing in the world.” – Konrad Adenauer, 1956
A key moment in bringing about this “second period of European integration” was the “Schuman Declaration,” as it became known. In 1950, the Schuman Declaration called for the pooling of Western Europe’s coal and steel production into an entity that would guarantee free access among its member states. The Declaration essentially called for a free trade zone in coal and steel and was the catalyst for the creation of the European Coal and Steel Community (ECSC), formally established by the Treaty of Paris in 1951. The regions most fought over in Europe’s history would be the birthplace of its economic integration.
“The pooling of coal and steel production… will change the destinies of those regions which have long been devoted to the manufacture of munitions of war, of which they have been the most constant victims.” – Robert Schuman, 1950
Rome, Maastricht, and Beyond
The abolition of tariffs on coal and steel at the borders was a notable success of the ECSC, however the institution also had an aim of preventing the rise of oligopolistic cartels which had run these industries in the past. In this area, the ECSC was less successful. However, perhaps the most remarkable success of the institution was its evolution into the European Economic Community (EEC), initially founded as a separate institution with the Treaty of Rome in 1957. The EEC extended free trade to virtually all goods. It also, for better and for worse, kickstarted the process of transforming the European project into something more than a free trade union.
Since then, the EU has transformed itself into a customs union, with a common set of external tariffs, as well as a common market with free movement in both goods and people. It has also become a currency union, following the Maastricht Treaty, which established the Exchange Rate Mechanism which fixed exchange rates as a precursor to the euro. This evolution has furthered the economic integration of Europe but also raised questions around the appropriateness of a single set of economic institutions for very different nations. However, the lessons of the ECSC show that economic integration can be done with regard for varying national interests, rather than as an abandonment of those interests.
Lesson
The history of the European Union is often told as the story of the abandonment of national interests following the Second World War. However, if the preeminence of a European identity and set of interests over national ones was the lesson of the war, it was initially lost on some of the men who are today considered the fathers of the EU. The creation of the ECSC in particular revolved around mere national interests. It was produced out of the realization that free trade was critical to security and prosperity in a continent whose borders leave important industries and resources consolidated in its most fought over regions. Thus, expanding free trade needn’t be in opposition to national identity and interests as many believe; the history of free trade is often at odds with the ways in which trade liberalization is interpreted today.
Further Reading
1. Full Text: The Schuman Declaration – 9 May 1950. Publications Office of the European Union, 24 Oct. 2017.
2. Brinkley, Douglas, and Clifford Hackett. Jean Monnet: the Path to European Unity. MacMillan, 1991.
3. “From the Schuman Plan to the Paris Treaty (1950–1952).” CVCE.EU by UNI.LU, The University of Luxembourg.
4. “Jean Monnet.” New World Encyclopedia, 19 Dec. 2018.
5. Steinberg, Jonathan. “Full Circle & Jonathan Steinberg: Why the British Don’t Get the EU.” Full Circle Brussels. Full Circle Brussels, Brussels.
