Abstract
This group covers the Continental European member countries of the Organization for European Economic Cooperation and their overseas dependent territories and related areas.1
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Austria, Belgium-Luxemburg, Denmark, France, Germany (Fed. Republic), Greece, Italy, the Netherlands, Norway, Portugal, Sweden, Switzerland, Turkey, Algeria, Morocco, Tunisia, French Cameroons, French Equatorial Africa, French West Africa, Madagascar, Belgian Congo, Netherlands Antilles, Angola, Mozambique.
Intratrade is defined as the sum of the value of the trade of each member with the group as a whole. Total area trade is the sum of the total trade of each member country or territory.
These measures are, of course, interrelated in the sense that the ratio of intratrade to world trade is directly proportional to the ratio of intratrade to total area trade and to the percentage of total area trade to world trade. Including dependent overseas territories and related areas (See footnote 1, p. 95). It should be noted that source 2 above did not include Jordan and the minor overseas territories of France and of the United Kingdom as reporting areas, whereas source 3 did include them. Consequently the total trade of these areas was subtracted from the D.I.T. World Trade figures given in the latter source to make the new series consistent and comparable with the previous one.
Two different statistical sources were used for 1938: 1) the League of Nations, Network of World Trade, and 2) D. I. T. statistics. The second source shows for this bloc slightly lower figures for intratrade because of different valuation criteria. Consequently the postwar figures which are derived from this same source tend to underestimate intratrade as compared to the prewar years. In other words it is likely that the tendency towards regionalization would be even more pronounced if the criteria used by the League of Nations were applied to the postwar data.
See A. Hirschman, National Power and the Structure of Foreign Trade, (Berkeley, University of California Press, 1945.)
See Table 42.
It should be noted that it is simple to measure exactly the net effect (positive or negative) of shifts in the trade distribution of individual member countries or territories on the ratio of bloc trade. The product of a country’s share of bloc trade and of its share of trade with a partner gives the proportion of total bloc trade accounted for by the first country in its exchange of goods with the second. By computing this product for the second country and adding these two products one gets the share of bloc trade representing trade between this pair of countries. This procedure is not limited to two countries. A simple example might clarify this concept. Suppose the purpose is to find out the extent to which the intensification of Germany’s trade with Turkey and Greece, and vice-versa, was responsible for the rise of intratrade with the Continental O. E. E. C. Bloc between 1928 and 1938. The first step is to determine Germany’s share of the bloc’s total imports and exports in both years (Table 41). The next step consists of calculating the proportion of German exports and imports which are respectively accounted for by Greece and Turkey in the same years (Table 42). Finally the desired measure is reached by multiplying these two ratios for both exports and imports and in both years. This same procedure is repeated for these last two countries. A comparison of the sum of these ratios indicates the net effect on intrabloc trade resulting from the shifts in these countries’ trade patterns. A short-cut way of comparing the same ratios involves adding the total intratrade of each country with the group, and dividing it by the total trade of the group for both imports and exports.
A. Hirschman, op. cit., p. 113.
Algeria, Tunisia, Fr. Morocco; Portuguese dependencies; Belgium Congo; Netherlands Antilles; Rest of French dependent overseas territories.
This point has been discussed at length in Part I. The implications of this shift on the intrabloc’s balance of trade network are covered in a subsequent section.
Also of great importance was the rise of France’s share of bloc exports from 12.2 to 17.2 per cent between 1938 and 1954.
This is based on the procedure explained in footnote 2, p. 100. The closer trade relationships between France and her overseas territories accounted for about 3.5 and 4 per cent, respectively, of the increase in bloc imports and exports over the same period.
This represents 37 per cent of the increase in the share of intratrade imports between 1938 and 1954 and 42 per cent of the rise in intratrade exports.
The balance of trade pattern of France in 1956 was greatly influenced by the Suez crisis and other factors. Her import surplus with the world rose from 27 million dollars in 1954 to more than 1 billion dollars in 1956.
League of Nations, Network of World Trade, p. 81.
The procedure followed to arrive at the percentage of multilateral trade settled within the bloc was based on a fairly simple method used by Philip W. Bell in The Sterling Area in the Postwar World, (Oxford, 1956) p. 309. Columns 1 and 2 of Table 46 give the value of total trade (sum of exports and imports) for each member with the Continental O. E. E. C. countries and with that group combined with their dependent overseas territories. Columns 3 and 4 indicate the net trade balance of each member vis-à-vis the two groups. Columns 5 and 6, showing the value of trade not bilaterally settled within the two groups, are arrived at by the summation of all the bilateral balances for each member country irrespective of signs. This means that a passive balance is in this case given a positive sign. Columns 7 and 8 are arrived at by computing the proportion, respectively, of the figure in column 5 as a percentage of column 1 and of column 6 as a percentage of column 2. Finally in order to obtain the amount of a region’s bloc trade which was actually multilaterally offset, a surplus with one region against a deficit with another, the net surplus or deficit with the Continental O. E. E. C. group, or this group combined with the dependent overseas territories (shown in columns 3 and 4), was subtracted from the sum of surpluses and deficits (columns 5 and 6). These values are shown in columns 9 and 10 and the proportion of total bloc trade multilaterally settled in columns 11 and 12.
Turkey’s corresponding figure was 11.3 per cent. It should be noted that this proportion dropped considerably in 1954, which explains the non-incorporation of this country in group 2 on the basis of the 1954 pattern.
A. O. Hirschman, op. cit., p. 112.
For definition of that index and empirical evidence see A. Hirschman, op. cit., Chapter VI.
Ibid., p. 14.
H. B. Woolley considers international cartels to have been an important determinant of the present trading structure. See Senate Hearings, op. cit., pp. 215–216.
Ibid. See footnote p. 216.
See Clarence Randall, “European Steel, Monopoly in the Making,” Atlantic Monthly, (October, 1951).
See among others S. R. Dennison, “The European Coal and Steel Community,” Lloyds Bank Review, (July, 1955) pp. 1–18, and University of Maryland, Studies in Business and Economics, “The European Coal and Steel Community,” Parts I and II, (December, 1955 and June, 1956).
Dennison, op. cit., p. 8.
For production figures see University of Maryland, “European Coal and Steel Community,” Part II, p. 5.
See I. Svennilson, op. cit., pp. 178–180.
Ibid., p. 181.
In the sense meant by Lerner: “Complementarities can be positive... where the possession or consumption of one good enhances the satisfaction yielded by another.” Abba Lerner, The Economics of Control, (New York, 1946), p. 33.
In August, 1955, the ratio of net balances to be settled in gold was changed to 75 per cent.
Robert Triffin, Europe and the Money Muddle, (New Haven, Yale University Press, 1957), p. 207.
Discussing the rise in intra-European trade in the fifties, an official publication concluded on the basis of a statistical analysis that: It is an important fact that, however “discriminatory,” the intra-European trade liberalization programme has, at least between the years 1951 and 1955, not been accompanied by a systematic tendency for imports of given commodities (or commodity classes) from European sources to rise faster than imports from outside sources.(See G. A. T. T., International Trade, 1956, p. 42.) A critical evaluation of the economic desirability (in terms of “trade creation” and “trade diversion”) of the trend toward trade regionalization within the various blocs is attempted in the last chapter.
See M. M. Kristein, “The Effect of Benelux on Belgium-Dutch Trade,” Economisch-Statistische Berichten, (18 July 1956).
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Thorbecke, E. (1959). The Tendency towards Regionalization in Continental Europe. In: The Tendency towards Regionalization in International Trade 1928–1956. Springer, Dordrecht. https://doi.org/10.1007/978-94-015-1053-0_4
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