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On the basis of the results of a series of investigations into individual parts of the new standard installation, practical measurements, and the experience gained during these activities, we may state the following: The installation satisfies the main demands and principles of the project; as regards its parameters the installation stands on the same level as the best foreign installations of the same type; the installation will be able to be used, not only for the needs of the Czechoslovakian SSR, but also cooperatively by the member countries of the Socialist Economic Union — for example, in development of the theme set out in [5], in which the Czechoslovakian SSR is a coauthor.

IN these days when there is much discussion of the so-called imperial preferences it may be worth while to recall what was agreed at the Ottawa Conference of July-August I932. The tone of the Conference was quite unlike what is now suggested in the Press; it was notably more liberal and outward-looking than anything you may read in the bulletin of the European Economic Union. In his opening address, Stanley Baldwin said bluntly: 'No one suggests that complete Free Trade within the Commonwealth is possible. . . . We cannot isolate ourselves from the world.... Let us aim at the lowering rather than the raising of barriers.' The intention, he said, was to make the preferences a first step to 'arrangements with other groups of nations.' Accordingly no general system of tariffs emerged, but twelve distinct bilateral agreements were signed between pairs of Commonwealth countries. In seven of them, to which the United Kingdom was a party, her government gave a solemn pledge to maintain the right of free entry for Commonwealth products, and it is important to remember that this was not a 'preference' but a survival of the historic principle of free imports for essential foodstuffs, the rule which made Britain rich and founded the economies of the other Dominions. It is this right of free entry that the European 'Six' are determined to destroy. In addition various specific preferences were negotiated. All were variable at six months notice and many have been varied during the last thirty years, or for one reason or another are no longer significant. The specific preferences are the only inducements we can offer (at the expense of the Commonwealth) when we make our humble appeal to enter Europe. To give away Commonwealth Free Entry without an equivalent would be a gross breach of faith. The Ottawa preferences have been subject to critical attacks from many quarters over the thirty years of their existence, and it is perhaps to the credit of these preferences that each partner in these bilateral agreements has at one time or another supposed himself to be getting the worst of the deal. They have permitted the growth of secondary industries in the Dominions under tariff protection, and the quota systems with which they have been sometimes reinforced have steadied the market in primary products. They have at all times aroused the envious hostility of foreign 449

I view international political integration as a distinctive aspect of the more inclusive process (international integration, generally) whereby larger groupings emerge or are created among nations without the use of violence. Such groupings can be said to exist at a variety of different analytical levels. At each level we can conceive of a number of nations linked to each other in certain salient ways. For example, their populations may be linked byfeelingsof mutual amity, confidence, and identification. Or their leaders may hold more or less reliableexpectations, which may or may not be shared by the populations, that common problems will be resolved without recourse to large-scale violence. Or a grouping might be defined as an area which is characterized by intense concentrations of economicexchangeor the freecirculationof productive factors (labor, capital, services). In describing these phenomena we speak of social community, security community, and of economic union. Political integration can be said to occur when the linkage consists of joint participation in regularized, ongoing decisionmaking. The perspective taken here is that international political integration involves a group of nations coming to regularly make and implement binding public decisions by means of collective institutions and/or processes rather than by formally autonomous national means. Political integration implies that a number of governments begin to create and to use common resources to be committed in the pursuit of certain common objectives and that they do so by foregoing some of the factual attributes of sovereignty and decisionmaking autonomy, in contrast to more classical modes of cooperation such as alliances or international organizations.

Summary The current debate on expanded economic cooperation in the Nordic countries has been going on for more than two years. The Prime Ministers of the four countries have met on at least ten occasions. The government officials have presented three extensive reports with concrete proposals. The Nordic Council has devoted the bulk of its last three sessions to this question. The Nordic daily press has produced thousands of editorials and a substantially larger number of news articles on the subject. The interest organizations have examined the concrete proposals and have criticized or commended them from their point of view. The political parties have list ell to and participated in the debate, made tactical moves, aggregated conflicting views and on the basis of these have formulated new standpoints. Less is known, however, about public opinion concerning the Nordek plans, but a couple of opinion polls in Denmark and Finland provide some indication. According to a Danish poll published in February 1969, 61 % of the respondents in a representative sample of the Danish population were positive toward an expanded economic cooperation among the Nordic countries, while only 5% were against it. In another poll presented in September the Same year, 43% of the respondents preferred Danish membership in the EEC along with Great Britain to a Nordic economic union. 26 % answered positively to the question of whether Denmark ought to join the EEC even if Great Britain did not. A larger proportion or 33% preferred a Nordic economic union under the condition that Britain did not join the EEC. Over half of the respondents in a Finnish opinion poll conducted at the end of January 1970 believed that Nordek would have predominantly positive effects, while 25% were of the opinion that the advantages and disadvantages were equal. Classifying the respondents according to party sympathies, the results were that 74% of the supporters of the Liberal People's party believed that the advantages were greater than the disadvantages. For the remaining parties, the figures were: 72% for the Swedish People's party, 69% for the coalition party, 55% for the Social Democrats, 49% for the Center party and 32% for the People's Democrats. The Nordic parliaments have debated the Nordek issue to a varying extent. The Danish Folketing and the Norwegian Starting have held several debates devoted especially to the market questions; the debates have opened with accounts given by government representatives concerning the negotiations. In the Finnish parliament and the Swedish Riksdag on the other hand, the Nordek plan has not been discussed to any great extent. So far in Finland, it has been discussed in parliament once (in December 1969), while in Sweden it has been dealt with on intermittent occasions but a special Nordek debate has not been arranged. The manner in which the governments have kept themselves informed of the view of the interest organizations has also varied in the four countries. In Denmark, Norway and Sweden the organizations have been urged to submit official comments. In Finland a formal procedure has been avoided and instead frequent informal contacts between the negotiating officials and representatives of the organizations have been relied upon. A system - similar to that in Finland - has also existed in the other three countries in addition to the official channels. The interest organizations strongly supporting Nordek have been a united Nordic trade union movement and the Federation of Swedish Industries. Criticism or outright rejections have been conveyed by the Danish Council of Industry, the Federation of Norwegian Industries, and the farmers' organizations in Denmark, Norway and Sweden. Information about the attitudes of the Finnish organizations is not available. The majority of the political parties in the Nordic countries have backed Nordek. Among the clearly positive parties are the four Social Democratic parties, all the Liberal parties (except the Danish Liberals), the Conservative parties in Finland and Sweden, the Christian People's party in Norway and the Center party in Sweden. The Norwegian Center party and the Danish Conservatives have been more hesitant, although increasingly more positive with the passing of time. The Center party in Finland and rhe Liberals in Denmark have mainly expressed negative points of view. The People's Democrats/Communists and the Social Democratic League in Finland and the Conservative party in Norway have been the most vigorous critics of Nordek. The Swedish government, as far as one can tell, has been united in its support of Nordek. In the remaining three countries, however, clear differences in opinions have been discernible between the Prime Ministers, who have been mainly positive, and individual ministers who have been negative. The Danish Prime Minister Baunsgaard has not always shared the views of the Minister of Market Affairs, Nyboe Andersen, on Nordek; and on several occasions statements by Foreign Minister Karjalainen have differed from the views expressed by the Finnish Prime Minister Koivisto. In Norway differences in opinion between Prime Minister Borten and Minister of Trade Willoch have been markedly noticeable. The Nordek debate has centered around five issues: (1) the Nordic customs union and the relations to the EEC, (2) agriculture, (3) fishery policy, (4) institutional arrangements, (5) the construction and size of the funds and the investment bank. The four countries have attached varying weight to specific problems. The Danes have often emphasized the importance of extensive cooperation in agriculture, have desired strong and nationally independent organs of cooperation, have advocated suspension of tariffs on certain industrial goods for an unlimited period of time, and have demanded as an absolute prerequisite for participating in the Nordek cooperation that it be compatible with future membership in the EEC. The Finns have wanted to retain their extensive trade with Eastern Europe and have demanded that consideration be given to their special agricultural problems, and have underlined their lack of interest in both EEC membership and association. The Norwegians have also demanded tariff suspensions for an unlimited period for certain goods, have put forward special requests concerning fisheries, and have stressed the importance of compatibility between the Nordic cooperation and EEC membership. The customs union has been the major Swedish demand during the negotiations. The Nordek plans were brought up quite unexpectedly by Denmark, but even subsequently the negotiations have not been void of dramatic incidents. Most frequently the unexpected moves have come from Finland. Mr. Koivisto unexpectedly pleased the other Nordic Prime Ministers through his surprisingly positive statement in Oslo in October 1968 on the plan:; for economic cooperation between the Nordic countries. But four months later, President Keklionen during a talk with Prime Minister Erlander in Helsinki expressed the Finnish opinion as being that the tempo of the negotiations had become too fast, The real surprise did not occur, however, until the beginning of December 1969 when Mr. Koivisto announced that the planned Prime Minister meeting in Turku was called off. A month and a half later the Finnish government gave the go ahead sign to continue the substantive negotiations aiming at a settlement at the session of the Nordic Council in Reykjavik. The Finnish conditions for proceeding with the negotiations included clear reservations concerning the EEC. The Nordic Prime Ministers agreed in Reykjavik on a time table for signing the Treaty, which meant that this would occur around 7 March 1970. Subsequently the Nordic parliaments were to ratify the Treaty during the spring session the same year. On 24 March the Finnish government, however, announced that it could not sign the Treaty because of the other three countries' active interest in the EEC. Instead the matter was passed on to the new government to be formed after the election. The following day Foreign Minister Karjalainen expressed doubts as to whether Nordek could at all be carried out before the end of 1970. Once again external forces have played a decisive role in formulating the market policy of the four countries. Danish and Norwegian hopes of starting negotiations soon with the EEC combined with the Finnish reservations made in January and March 1970 make it difficult to judge the prospects of Nordek being implemented. Nordek cannot be said with certainty to be a fact until the ratification documents are safely- in the custody of the Foreign Ministries of the four countries. March 25, 1970

One argument for the enlargement of economic communities is that freedom of access to a larger market provides a favourable economy of scale for the introduction of innovations arising from current research and development. This opportunity is enhanced by the possibility of improved cooperation and coordination of technological aspirations. Since an enlargement of the European Economic Community is probably imminent, some readjustment in national attitudes towards new technology appears to be necessary. Managers of industrial marketing, for instance, would ideally hope to be conversant with R & D policies, and project selection procedures, used by member governments before economic union; and be able to make a prognosis on how these policies could change after economic union. This article by J. Richards, of the Department of Trade and Industry, deals with U.K. techno-economic studies of possible R & D programmes on fuel cells, internal combustion steam turbines, and civil marine nuclear propulsion. It should give our readers some useful insight into R & D project selection procedures currently used in the United Kingdom.

The present paper, based on experience in remote countries, might be considered of limited general interest, unless it is seen as a case study of the application of exchange controls in underdeveloped countries. As such, it has the advantage of bringing out the basic problems encountered under this approach, as well as the philosophy usually guiding it, with particular clarity, almost as if it were a laboratory experiment. This is true because of the very simple nature of the economy in which the system was applied in the case at hand, and also because of the lack of sophistication in its conception, as well as in its execution. In other countries where similar systems are in force, the results also are unsatisfactory, but the causal relationships, because of the more complicated setting, may not be quite so evident. The current importance of the question of exchange controls cannot be denied: underdeveloped countries that do not apply this system in one form or another are the exception. And it could probably be argued that, among the purely economic causes that may be identified as responsible where there is unsatisfactory progress in underdeveloped countries, the application of exchange controls is the most important.

A Far Eastern Republic appeared on the Pacific coast of Siberia when the Russians began to organize themselves after their Revolution. This new Republic, vvith its capital at Chita, was recognized by the Russian Soviet Federated Socialist Republic on May 14,1920. Its life was short. At the time of its recognition by its large Western neighbor it asked for military aid. Two years later, on February 17, 1922, it concluded a Treaty of Economic Union with that neighbor.1 On February 22 of the same year it joined with the R.S.F.S.R. and the other Republics which had emerged from the Russian Empire in a protocol.2 This Protocol conferred on the R.S.F.S.R. the task of representing all of the Republics, including the Far Eastern Republic, at the first meeting with the Western World at Genoa in 1922. On November 13, 1922, the National Assembly of the Far Eastern Republic went further. It voted to transfer all power to a revolutionary Committee appointed by the R.S.F.S.R. The Far Eastern Republic ceased to exist.8 Since the dissolution of the Far Eastern Republic, the Soviet Far East has had no government of its own or policy distinct from that existing in the U.S.S.R. as a whole. A study of the Soviet Far East has become a study of the U.S.S.R., with special reference to the administrative structure of the eastern regions of Siberias and to Soviet policy as ithas been manifested bythe U.S.S.R. in its relations with other powers in the Far East.

Pan-slavism is one of the elusive idea-concepts which can be easily defined. But the historian can hardly say how far they correspond to a political reality which exercises a decisive impact on the course of history. A similar contemporary ideaconcept is Pan-Africanism, propagated and commended by most Africans. So far it has failed to create a political or economic union. The only example of that kind, and that on a very minor scale, the Mali Federation, dissolved after a short existence. The same holds true of another similar concept, Pan-Scandinavianism, which is approximately as old as Pan-Slavism but better based on a much closer cultural and religious affinity.

The welfare implications of a customs union for potential partners and third countries has been the subject of a number of theoretical and empirical studies.1 In the empirical work, welfare gains and losses from entering into a customs union are usually estimated in terms of whether the union brings individual economies closer to or farther from the optimal division of labor. Both Johnson's and Denison's estimates, which concentrate on the resource allocation effects of reducing trade barriers, show the increase in growth rates as a result of such gains to be relatively small. This treatment of customs-union theory necessarily assumes constant or increasing costs of production. Because of the perfect competition conditions of the model, it fails to deal with decreasing costs of production within the customs union. By reducing the cost of products in member countries, tariff reductions may increase long-run economic growth (and aggregate demand) even though prices of manufactured goods in the union do not immediately fall to world market prices.2 In the case of estimates made for the European Economic Community, it may well be that the market expansion created by European integration in addition to national market expansion since 1950 did not increase growth rates significantly in

A revaluation of the German Mark has been hindered by the effects that this would have on German farm prices, given the E.E.C. agricultural policy. The article therefore examines the implications of (a) a common agricultural price level, and (b) fixed or adjustable exchange rates within a customs union such as the E.E.C. It concludes that a change in relative price levels between countries couldbe tackled by means of exchange rate changes, while retaining a common agricultural price level; but even with adjustable exchange rates, a common price level may give rise to diBculties unless agricultural productivity in the member countries grows in a particular way. It finally suggests that a wider European economic union would require niorejexible arrangements than those at present in force in the E. E.C.

most unanimous in this country among those who hold that the United States must or should take the responsibility for the international order after this war. This belief rests partly on economic theory and partly on the view that economic considerations are decisive in international politics. But, above all, the belief in free trade rests on an analysis of United States international economic policy during the last twenty years. It has become widely accepted, both here and in Europe, that because the United States "refused to act the part of a creditor nation," because she increased tariff duties twice during the postwar period instead of decreasing them, because she thus acted against the natural laws of economic life, the United States is largely to blame for the collapse of the postwar economic order. And this belief in the guilt and responsibility of the United States is largely responsible for the ascendancy of proposals for international economic union.

* About the Authors. Stanley V. Malcuit is a staff economist with the Aluminum Company of America. He received his A.B. from Wittenberg College in 1943, his M.Litt. from the University of Pittsburgh in 1957, and is currently working on his doctorate degree. He has written more than fifty trade-journal articles on various phases of the aluminum industry and is the author of an educational monograph entitled The Aluminum Industry (Bellman, 1946). Reuben E. Slesinger, Professor of Economics at the University of Pittsburgh, received his B.S., M.A. and Ph.D. degrees from that school in 1936, 1938, and 1940 respectively. He has had numerous articles published in professional and business journals and is co-author with F. R. Fairchild and N. S. Buck of Principles of Economics (Macmillan, 1954), with A. Isaacs and C. W. McKee of Readings in Modern Economics (Dryden, 1951), and with A. Isaacs of Business and Government (University of Pittsburgh, 1958). nomically weak nations. Through its various aid and assistance programs the United States was instrumental in generating economic reconstruction in most of the free nations of Europe. Soon it became apparent that some type of economic union on the Continent would be essential if these nations were to raise

A. study of interregional trade in Pakistan affords an interesting case V of the working of an economic union as well as of the development ade relations between a relatively more and a relatively less developed in. The central purpose of this paper is to construct a number of basic ;tical series bearing on interregional trade in Pakistan and to attempt tical tests, insofar a~it is feasible on the basis of available data, of a per of hypothees relating to the pattern of interwing trade as well as iovemt",.a.W"in the terms of trade of East and West Pakistan vis-a-vis ;utside world and between each other.

IT has become a commonplace to say that the British missed the bus in the early fifties by misjudging the European pressure for unity, and that had the Government of the day taken an initiative it could have constructed the kind of Europe that was most in the British interest. For the last eight years British governments of both parties have been trying, thus far without success, to find a satisfactory relationship with a Europe cut to a French pattern. It is always hard to be sure at the time, as indeed it was in the early fifties, but the signs today are that the first six months of 1966 is likely to be a critical period in the construction of Europe, a time when a British government that really wanted to help unite Europe might be able to play a decisive part, might be able to help shape events rather than simply to react to situations created by others as it has done for most of the last decade. Spokesmen for the British Government have thus far treated the crisis in the European Community as a matter for settlement by the Six. This was quite clearly the right position to adopt last summer while the French Government maintained that the crisis arose simply from the fact that its partners had not lived up to their commitment to agree, by midnight on June 30, on the financial regulation governing payments into, and disbursements from, the EEC Agricultural Fund. But after General de Gaulle confirmed what everyone suspected, and made it plain in his press conference on September 9, that the real points at issue were ' certain mistakes or ambiguities in the Treaties setting up the economic union of the Six', the argument among the Six became-openly and clearly-an argument about the kind of European union that should be built. It must be recognised that, given the situation in Europe today, and the positions taken in the past by Labour Party spokesmen, sitting still and saying nothing, like other Neutrality Acts in the past, is a policy in itself with consequences that are not too difficult to predict: it strengthens the likelihood that any compromise which is found between the Five and the French will lie near the Gaullist end, rather than the European end, of the spectrum. Does this matter? Will the European wine, as some people argue, become more potable if it is watered down a little, and does the road to Europe still, and inevitably, run through Paris? In order to try to

Economic integration in East Africa has been discussed throughout the past 50 years or more, although—until recently—only in terms of Kenya, Tanzania, and Uganda. Almost as soon as Kenya and Uganda became established as political entities, close economic links were established between them, and when British administration was extended to Tanganyika after 1918 that country was brought into close relationship with its two northern neighbours. Thus a customs union between Kenya and Uganda was established in 1917, and Tanganyika was gradually incorporated within it between 1922 and 1927. The links were strengthened as economic development advanced, and were formalised under the East Africa High Commission from 1948 onwards: so they became an important part of the inheritance of the three states as they gained political independence in the years 1961–1963.1

power and of resources in the world after the war. What will the United States do with this power and treasure? Once upon a time an investigator died and went to heaven. Before settling down he asked to be allowed to satisfy his curiosity by visiting hell. He found a circle of hungry-looking, cadaverous individuals around a banquet table spread with a great feast. Each man had a long metal spoon strapped to the inside of his arm, like a splint, so that he could not bend his elbow. No one could feed himself. There they sat, hungry and disconsolate. On his return to heaven he found another delicious banquet spread, surrounded by a circle of fat and happy people. Each man had the same kind of spoon, strapped in the same way. Each was feeding his opposite neighbor. In this parable you, the reader, are the investigator. The great empires are the hungry, cadaverous people. The people of the United States would like to be the fat and happy ones.

UT HE five States commonly called the Northern countries of Europe -Denmark, Finland, Iceland, Norway, and Sweden-are often looked upon, from outside, as a collective entity. Within the international community the Northern peoples undoubtedly feel akin, and give the impression of being more or less a distinct family group. They may thus themselves be to blame if the result has sometimes been an oversimplified picture, standing in the way of a realistic appraisal of existing conditions in this region and of the numerous and important national distinctions actually found. Geographical proximity, common history, and cultural ties, including the similarity of tongues, have bound the Northern countries and their peoples together by firm bonds. The same democratic form of government and the great similarity in economic and social structure, where, to quote the Danish poet Grundtvig: 'Few have too much, fewer too little', have all tended to shape a common way of life as well as a largely common outlook on life. It should be kept in mind, however, that the Northern countries do not form a political or economic union of any sort. Nor do they constitute a bloc in the modern sense of this word. They remain five independent States, which on a regional basis try to solve common problems by mutual co-operation. It is true that in earlier times attempts have been made to unite the Northern countries, and political unions of varying duration were also established between two or more of the five. These unions were, however, mainly a result of dynastic power politics with little or no popular backing. During the first part of the last century the ideas of the so-called Scandinavian Movement met with response among university students and in literary circles at that time influenced by German romantic philosophy. The political reality behind this movement for greater Scandinavian unity was fear of Russian aggression against Sweden and of Prussian aggression against Denmark. The romantic Scandinavian ideology created by enthusiastic intellectuals had, however, no foundation in the world of realities and the movement collapsed when Denmark was left alone to withstand the Prussian attack in i864. These experiences and other lessons of history have developed among Northern peoples a rather sceptical attitude towards all unrealistic plans for Scandinavian unity. The same scepticism colours their reaction to the more ambitious plans for European Union. Rather than plunge into 285

If a country imposes a 10 percent duty on all imports and a 10 percent susbsidy on all exports, this is equivalent to a 10 percent devaluation of its currency insofar as its commodity trade is concerned. This will have an effect on the balance of trade unless and until it is offset by a 10 percent revaluation of the currency or a general 10 percent inflation of all its domestic money prices and costs. It will then have no effect upon the quantities of production, consumption, import, or export of any commodity. Its only effect will be a monetary one on the rate of exchange between the domestic currency and foreign currencies or on the general level of prices and costs in terms of the domestic currency. This well-known proposition can be extended to cover a group of countries. Consider three countries-A, B, and C. Suppose that A and B (having perhaps formed an economic union) agree to impose a 10 percent duty on imports from C and a 10 percent subsidy on exports to C without taxing or subsidizing their imports from and exports to each other. If A's and B's currency both appreciate by 10 percent in terms of C's currency, or if A's and B's domestic money price and cost levels both go up by 10 percent relatively to C's domestic money prices and costs, there will be no real effect on any quantity of any commodity produced, consumed, or traded. The proposition can then be further extended by combining the two ideas expressed in the preceding two paragraphs. Imagine the following sequence of events. 1. First A imposes a border-tax adjustment of tbc on its trade with B

When the writer was asked to prepare a definitive statement regarding the sizes of presently-known and prospectively-available world resources, he actially was asked three questions, namely: What are the dimensions of the world’s known material-resource-reserves? What expansions of such reserves are reasonably possible and expectable under present exploratory and developmental practices? and What implications do the answers to (1) and (2) have in terms of the world’s capacity to support enlarged populations for an indefinitely-long period? — (this latter question being implicit within the topic “Population Crisis — And the Use of World Resources”)?

One of the most important results of the Paris Summit of the nine EEC-members was the decision taken to establish a European Monetary Union until April 1, 1973. Will the Economic Union be now approached more rapidly than in the past?

In this paper, attention is paid to the development of a simple fiscal policy model which could be used to examine the influence of economic relations between regions on stabilisation policy. While the model embodies institutional assumptions which are appropriate only for regions within a country, these could easily be adapted so as to facilitate study of stabilisation problems within an economic union of separate sovereign states.

Publisher Summary This chapter reviews the first decade of EFTAs's realization. When the exploratory meetings, still confined to officials, moved to Oslo on 21 February 1959, the name European Free Trade Association (EFTA) was mentioned for the first time. Delegations from all seven countries met officially for the first time in Saltsjobaden, near Stockholm, on 1 June 1959. It took them just 13 days to agree on the framework within which EFTA was to be established. Some of the best negotiators in Europe took part. At the end of 1966, EFTA's original seven member countries and Finland, which became an associate member in 1961, were enjoying a higher average per capita income than the European Economic Community (EEC) countries. In the decade that followed the Saltsjobaden conference, EFTA had shown that a free trade area can provide a workable approach to economic integration, while the common market approach, as pursued by the EEC and aiming at an economic union, had predictably proved more difficult to work. But EFTA has also been a political triumph.

The original programme of this conference provided for papers on policy issues in small developed countries and in Western Europe. However, for many purposes this is not a very useful distinction. Developed countries with less than 15 million people are small relative to Britain, France and Germany, but they in turn are small relative to the United States. A special problem in Western Europe is whether economic union will make it possible to bridge the gap between the scale of their research and development expenditure, and that of the United States, and if so whether this would bridge the technology gap.

In the first ten years after the Second World War Dutch organised agriculture was not very active on international issues. On the two major issues of European economic integration in these years, the ideas of a Benelux Economic Union and of a European organisation of agricultural markets, organised agriculture was often stimulated into activity by the then Minister of Agriculture, S. L. Mansholt, a man with wide experience of agricultural problems and farming, and possessing the ability to make up his own mind. He adopted the practice of constant consultation with organised agriculture on most issues of policy, both national and international. An impelling motive for this consultation was possibly the fact that the Minister was a Labour Party member of a Cabinet which comprised a number of members who belonged to one or other of the confessional parties; these parties have always been highly dependent on rural support. To obtain, then, the support of organised agriculture for his policies was to place himself in a stronger position within the Cabinet.

Whether or not Britain joins a rival economic union, increasing competition from the European Economic Community is a factor to be reckoned with. Effective rationalisation of industry in the EEC countries implies some measure of rationalisation of their varied systems of technical education, and Mr Warren considers the discussions which have been held recently on this subject within EEC.

January 1st of this year, the members of the European Economic Community France, Italy, West Germany, Holland, Belgium and Luxembourg reduced their tariffs against each other on industrial goods by 10 per cent, in the first stage of a series of tariff reductions which, over the course of the next 15 to 20 years, will lead to the creation of a "common market" in Europe. Observing their action, the remaining European nations have redoubled their efforts to find a formula under which they too can enter the economic partnership. All of them have reasons for not wanting to join an absolute customs union and have been endeavouring to obtain agreement to the formation of an associated free trade area, as suggested by the United Kingdom, but this solution has thus far proved unacceptable to the members of the Community. The British espousal of free trade has also been extended in another direction. At a conference of Commonwealth finance ministers at Mont Tremblant in the fall of 1957, Mr. Peter Thorneycroft, then Chancellor of the Exchequer in the United Kingdom government, made a dramatic proposal for an AngloCanadian free trade area. The proposal caused a howl of dismay in Canada, and was hurriedly swept under the carpet by the Canadian government. There was no mention of it at the Commonwealth economic conference in Montreal last September, and the idea now seems to have been forgotten. Elsewhere, however, economic association seems to have become all the rage, with further suggestions for such schemes being heard in South and Central America, the Middle East and South-east Asia. And 1958 brought a further example of the

The Rome Treaty establishing the European Economic Community (E.E.C.) provides for a number of measures designed to establish an economic union between the signatory countries and make possible a more economic allocation of resources within the Community. This, in turn, would, it was hoped, increase the over-all productivity within the region comprised by the six participating countries-including certain overseas areas. The establishment of a customs union was envisaged as only one of the measures to be employed for these purposes; but, so far,' this is the only task of "harmonization" that has reached the first stages of realization. On January I, I96i, tariffs on a large group of imports from member countries were reduced by a further ten per cent, after two previous reductions of the same proportion. At the same time a first step towards a common external tariff went into effect-i.e., each one of the four customs areas of the unionla began to apply on imports from nonmember countries a tariff which is thirty per cent closer to the common tariff provided for in the Rome Treaty. This change in the tariff structure of the world's most intensive trading area is often regarded as an event which will have the most direct and obvious effect upon the relationship between the E.E.C. and the rest of the world. Any prediction as to the scope of this effect, however, is based largely on static models-ie., on the analysis of cost-price-quantity relationships under extremely limiting assumptions as to market structure and income changes. Therefore, whatever tendencies or effects such models may indicate are meaningful only in the context of an extremely special case. At best, they give an indication of the direction of change to be expected from changes in tariffs; but the "tendencies" revealed by static models lack the significance of those which in reality connect different stages of economic processes over a period of time. In short, these models have only logical, rather than realtime dimensions. Apart from the problem of prediction, one might wonder at the comparative ease with which the treaty countries have found agreement on the bulk of tariff items. If it could be argued that the establishment of the customs union was easier than the implementation of other features of economic union, one might well suggest that apparently less powerful economic obstacles were encountered in its course. Turning this argument around, this would suggest that the economic effects of