The Trade and Aid Policy of the European Union: A Historical Perspective

While in recent years the origins of the European Union have been shown to be multifaceted and not simply a matter of collaboration with the purpose of avoiding war, what cannot be gainsaid is that economic priorities and the need to facilitate and liberalize trade have lain very much at the heart of the European project from the first. This was not merely a post-war phenomenon, for during the latter half of the 1930s the governments of Britain, France and the United States did exhibit an inclination to collaborate in facilitating and liberalizing trade in the confident expectation that the principal dividend would be peace. As Cordell Hull, the American Secretary of State, put it: ‘unhampered trade dovetailed with peace. High tariffs, trade barriers and unfair economic competition with war’ (Carr, 1985, p. 11). Within the 1930s Roosevelt administration Hull was not a lone voice. Henry Morgenthau, the Secretary of the Treasury, emphatically endorsed his views. He believed that the Three Power Currency Declaration of September 1936, which aimed at promoting stability between the dollar, sterling and the franc, would aid the liberalization of trade. For Morgenthau, it was possibly ‘the greatest move taken for peace in the world since the World War’ and might ‘be the turning point for again resuming rational thinking in Europe’ (Blum, 1959, p. 171). For their part, the British and French governments endeavoured to build upon the Three Power Currency Declaration by appointing Paul van Zeeland, the Belgian banker and politician, to conduct an enquiry into the possibilities of dismantling the economic nationalism of the European dictatorships. The Van Zeeland Report when it was published on 26 January 1938 stated that the autarchic economic policies pursued in the wake of the depression could do nothing other than lower the standard of living for all. It was confidently asserted that only the fostering of international trade could ensure prosperity within national frontiers. It would be otiose here to go into further detail. Suffice it to say that the thrust of the Van Zeeland report was in the direction of freer or free trade by the elimination of tariffs and quotas and the encouragement of bilateral trading treaties containing the most-favoured-nation clause.