Evening star., 1949-09-25
By Flora Lewis

from each of the three countries
had met together and found their
aims conflicting. Agricultural ex-
perts. trade experts, financial ex-
perts and others had met in their
separate groups and come up
against the same obstacles.
Farmers of Belgium and Lux
embourg would suffer from open
competition with highly ration
allied, extremely efficient Dutch
farmers. Some Dutch manufac-
turers would be forced out of busi-
ness by unrestricted imports from
Belgium where large-scale produc-
ton. cheaper costs and the ability
to buy raw materials in the dollar
markets instead of from more ex-
pensive soft currency areas rc-
suit in lower prices.
Two Main Problems
At the present meeting of dele
gates from the three countries,
all the branches of national econ
omy are represented in an effort
to settle some of the dilemmas
in spirit of give and take.
The second spur to renewed
activity was the recent Paris de-
ciSion that Belgium would grant
the Netherlands $139,000,000 III
Marshall Plan drawing rights
this year. The Dutch estimate
that sum to be $4,000, 900 short
of their anticipated trading deficit
with Belgium during this Mar
shall aid year. and current nego-
tiations will seek to find some way
to settle the difference.
The present task is to work out
Ia union schedule for the re-
moval of trade restrictions, which
is to have, effect for approximate
ly one year in anticipation of
formal economic union. sCustoms
have already. disappeared among
the three countries, but import
and export licensing. particularly
on the Dutch side, remain: an @ef !.
fective barrier to trade.
The two main problems are
money and agriculture. At pres
ent. Belgium has an almost hard
currency. The Netherlands has
Europe's largest dollar deficit, in
terms of the proportion of dollar
imports paid for with dollars
earned.
On the other hand, the Dutch
have a quite comfortable position
in the sterling area. One possible
way out of their trouble. they
say. would be to pool their ster-
ling resources with those of Bel
gium. which would mean that
Britain and other sterling coun-
tries would have to cover most of
their trade deficit with Benelux
in dollars. But Britain, of course,
would not agree to this, and even
if the plan could be forced
through it would probably mean
great drop in Hollands sales
to the sterling area, which now
takes three-quarters of her ex-
ports.
New Difficulties
There can be no immediate and
thorough-going solution of this
obstacle to union short of return
to the prewar state Of universal
currency 'convertibility, but the
Dutch hope that some increase in
convertibility. some progress to-
ward multilateral trade, some
rise in their dollar earnings and
some special tolerance from Bel
gium, If added all together, might
bridge the gap.
Nor can the lower productivity
of the Belgian farmer be redressed
Immediately. officials here admit
that the only way to settle the
agricultural problem in a reason
able period is to admit frankly
that some section Of each nations
economy will suffer dislocation
from the generally beneficial ef-
fects Of union, and to balance
them out, one against the other.
This, OF course, means trouble for
each government with special in
tereStS at home.
Some progress has been made.
The Benelux countries are pre-
pairing to negotiate their first
joint trade agreement with third
country. The Dutch have lifted
many Of their ration and price
controls, and still state their in
tention Of completing the agreed
removal Of such restrictions, ex-
cept those on coal, by the end
LOT this year.
As for the long-arranged bal
ancing and specialization of econ
omies which will bring the real
fruit Of union. a start has been
made. For example, a Dutch
man who. thinking Of Hollands
large CONSTITUTIONAL requirements,
wanted to open a plate-glass fac
tory. was told to think of another
line Of business instead. ECO
nomic union Is coming" he was
told, land the Belgians make
enough plate glass for our needs
and more cheaply than you can"
Z On the other hand, new prob
llens keep cropping up. One is the
beer gin controversy. Holland
wants to export gin and apple
Juice, which the Belgians consider
too strong and too insipid, respec-
lively. Belgium wants to sell beer,
which the Dutch don't care for.
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