Sovereignty and the Common Market
Sir: Criticising Sir Harry Legge- Bourke's fine article, The re- assertion of sovereignty', Mr Gordon Evans shows misunder- standing of inter-war history in such phrases as 'a mutually impov- erishing anarchy of reasserted sovereignties and fiscal freedoms'.
Sovereignty and fiscal freedom mean the right and ability of national governments to enter into preferential arrangements with 'states or groups of states. After World War i European and other countries needed food, raw mat- erials or capital from the United States to revive or rebuild their national life. The restnred gold standard and the most-favoured- nation clause, the effects of which Sir Harry explains, denied them the power of bargaining. Discrimin- ation was prescribed, but discrimin- ation alone could have opened alternative markets and sources of supply. So the gold of Europe crossed the Atlantic and Wall Street replaced the City of London; but whereas Britain when world financial centre had been a great importer, the United States rel- atively was not and Europeans, already saddled with war debt, could not meet their obligations by exports.
One may concede to Mr Evans that Wilsonian self-determination and the errors of Versailles intro- duced an 'anarchy' of new states not adapted to economic realities. But the victors of 1918 professed the liberal ideas which still cap- tivate internationalists, nothing came of a suggestion in the Treaty of Saint-Germain of a customs union between Austria, Hungary and Czechoslovakia and truncated Austria was forbidden to enter a customs union with the Germany not of Hitler but of Weimar. The Ottawa Agreements showed a world in depression a way out but the British and other governments scotched a preferential arrange- ment entered into by Belgium and Holland at the Ouchy Conference and another planned by the Oslo Powers.-
Promiscuous economic inter- nationalism provoked extremes of economic nationalism and total- itarian methods of control. It denied British industry and agriculture the security necessary for research and modernisation. It was dis- astrous for the us.
In 1934 Britain waived her MFN rights in order to allow preferential arrangements to be made between Italy and Austria, Italy and Hun- gary, Austria and Hungary. But Hitler was already in power and it was late to establish a system of states able to stand upright between Germany and Russia.
MFN was enshrined in the war- time and post-war aid agreements and in GATT etc. It wrecked. what was begun at Ottawa and has forced upon unifiers of Western Europe an 'all or nothing' structure harmful to the national principle which is the great European political reality.
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