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European Union and the 'Third World'

Part 1 - Post World War II arrangements
by Ron Dorman

In western Europe the economic system of capitalism emerged from World War II in a very much weakened condition and a desire of its peoples that their continent should never again be the cause and seat of armed conflict. These factors did much to determine future events.

Another factor which helped to shape the continent of Europe and world after World War II was the Soviet Union. This country had emerged from the war with 20 million dead and a devastated industry, but was seen at the time by many to be a main force in the allied victory over fascism and a friend of peoples in the `Third World' struggling for national independence.

Demand for independence

Outside the continent of Europe, peoples living in colonial territories not only began to demand national independence but gradually acquire capacity to achieve their aims in a changed post-war world. Some colonial powers preventing their independence were among countries which signed the Treaty of Rome (France, Belgium and Netherlands) when the European Economic Community (EEC) was founded in 1957. This treaty represented a new grouping of sections of European capitalism to save itself and combat what it perceived as a threat from the Soviet Union and national liberation movements in the colonies.

It should come as no surprise therefore to find provisions were made in Articles 131-136 of Part 4 of the Treaty of Rome for non-European countries and territories which had special relations with a Treaty member state to have association status with the EEC. Although all 26 countries which acquired association with the EEC at this stage were dependencies or trustee territories of EEC states, Article 238 provides for a special association with reciprocal rights and obligations between the EEC and any third country.

Tarriffs avoided

Another reason why special provisions in the Treaty were to be expected was France, a key founder member of the EEC, treated her overseas territories as part of France and was not prepared to apply external tariffs to them. To have done so would have meant imposing a tax on French investment profits from these territories which mainly went to France. Conversely, French exports enjoyed preferential treatment in these territories.

In the first five years of the Rome Treaty, provision was made for any reductions in tariffs on trade between EEC countries to be extended to 26 associated territories - 22 of which were French possessions in Africa. In return these countries extended `Most Favoured Nation' treatment to imports from all Community countries.

A European Development Fund (EDF) to finance investment projects in associated territories 1958-62 was provided for in a Treaty annex. Germany and France were to provide two thirds of finance in equal shares with about 90% of expenditure in French dependent territories.

Penetration of markets

Thus a way was cleared for export of goods, services and capital by all other EEC states, as well as France, to penetrate markets of associated countries and purchase cheap imports and raw materials from them in a deal disadvantagous to these developing countries.

In the light of experience of the initial five years of operation of the Treaty, provision was made for the EEC Council to determine what future action should take place which included most overseas territories becoming independent states.

Part 2 - European Union and 'Third world'