Economic and Marketing Information
FOR INDIANA   FARMERS
Prepared by the Agricultural Staff of Purdue University, Lafayette, Indiana
April 30,  1962
Agriculture and the Common Market
by J. Carroll Bottum, Agricultural Economics
Development of the European Economic Community
(the Common Market) through the ratification of the
Treaty of Rome in December, 1957, by six countries is
one of the most significant world events of this generation. The six countries in the Common Market are Belgium, Netherlands, Luxembourg, France, West Germany,
and Italy. These countries in 1960 had an estimated
population of 172 million people living in an area of
451,026 square miles. This is compared to a total U. S.
population of 181 million and an area of 3,082,809
square miles. The Gross National Product (GNP) of the
EEC countries during this period was $179.1 billion
compared to $505.2 billion for the United States.
Three steps were taken following World War II which
had much to do in bringing about the Common Market.
The first was the Marshall Plan passed by Congress in
1948. Under this plan over a period of 9 years, $19
billion was provided to promote the economic development and reconstruction of 18 countries in Western
Europe. The second was the formation of the Organization for European Cooperation to allocate financial aid
made available by the United States. The third was the
European Coal and Steel Community formed in 1952
to establish a unified market for coal and steel in Belgium, France, Italy, Luxembourg, Netherlands, and West
Germany. Since 1953, tariff and quota restrictions on
these products among the six countries have been
abolished.
Objectives of Common Market
Objectives of the Common Market countries approach,
economically, a United States of Europe. Some of the
basic objectives are as follows:
Elimination of Customs Duties Between Countries of
the EEC: At the end of 12 years, protective duties among
EEC countries would be eliminated.
Establishment of a Common Customs Tariff: With certain exceptions, there will be a single common tariff for
each commodity for all EEC countries. In most cases it
will equal the average of their tariffs at the beginning of
EEC.
Elimination of all Quantitative Import and Export Restrictions Within the EEC Area.
A Common Agricultural Policy: This policy will have
the following objectives: (1) increase agricultural produc
tivity, (2) assure equitable standard of living to the
agricultural population, (3) stabilize markets, (4) guarantee supplies, and (5) assure reasonable consumer prices.
Free Movement of Persons, Services, and Capital:
There will be free movement of workers throughout the
Community and all discrimination based on nationality
as regards employment and wages will be eliminated.
Any person or firm in one country of the EEC may set
up a business or service in any other country of the EEC.
No Restriction on Capital Movements Between Countries: A common policy will be adopted concerning capital
movements from countries outside the EEC.
A Common Policy Toward Rail, Highway, and Water
Transportation: This will include (1) common regulations for interstate traffic, and (2) conditions under
which a carrier from one country will be permitted to
operate in another member country.
The treaty establishing the Common Market also recognizes the rise of certain overseas countries and territories, most of them in Africa, with which Common Market countries have special links. The Treaty provides for
expansion. The United Kingdom, Ireland, and Denmark
have appled for full membership. An agreement between
Greece and the Common Market is in process of ratification. Turkey, Austria, Sweden, Switzerland, and Spain
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