Common Market: Taking Shape

The world's most formidable new economic community is rapidly and inexorably taking shape.

On New Year's Day, besides carrying out their third round of internal tariff reductions in a year, the European Economic Community's six members made their scheduled first move toward building a common tariff wall against the rest of the world. France and Italy, both high-tariff countries, lowered their duties the first agreed notch, Germany and the Benelux countries raised theirs a bit. By 1966 the Community, more familiarly known as the Common Market, should be fully operative. Then Italian Fiats and German Volkswagens, for instance, will be able to enter France duty-free, but the tariff on U.S. and British cars will remain a stiff 29%.

Besides looming as a great new market almost as vast (pop. 170 million) as the U.S., the European Economic Community is already on its way to becoming a powerful competitor in international trade. Already, the Six do 24.5% of world trade. Last year U.S. firms poured a record $300 million into branch plants inside its walls, partly to get in on the ground floor of the European market itself, but also to get the benefit of the Community's advantages in competing for export markets elsewhere. Chief advantage is wage costs, which are less than a third of the U.S.'s. Average hourly wage rates in manufacturing industries (as tabulated for 1959 by the French economic journal Etudes et Conjoncture):

U.S. $2.68 West Germany .78 Belgium .74 France .72 Italy .61 The Netherlands .57