Evening star., 1961-12-05

6tCooSo, AZ 40 AASPSN, VAAS 'SSS
ern alliance will become more
unified and its members will
have the economic strength to
meet RuSSia's challenge.
Help for Neutrals
Prosperity for Europe's neu-
trails and their economic link
to the alliance should help
them withstand Soviet pres
sure.
Although these political
factors are considered over
riding, the Kennedy admins
tration also sees potential
economic advantages for the
United States. But the key to
cashing in on these benefits
is to keep the Common Mar
ket's external tariffs low.
The Common Market has
pledged to follow liberal trade
policies if the United States
goes along. Thus, admins
tration policy-makers main
tain, it is essential for the
United States to offer deep
reductions in its tariffs in re-
turn for reciprocal concessions
by the Common Market.
Since European tariffs gen.
orally are higher than Ameri-
can duties, the administration
hopes the Common Market
will offer bigger percentage
cuts than it demands from the
United States.
Law Called Inadequate
Peril points and other pro-
tectionist safeguards in the
existing reciprocal trade law
make it impossible for the
United States to offer the kind
of sharp tariff reductions re-
quired to win meaningful con-
cessions, according to the ad-
ministration.
And since the Common Mar
ket reduces tariffs by broad
categories. it is considered
necessary for the United
States to negotiate on an
"across-the board" basis in
stead of item by item.
If the Common Market
keeps its external tariffs low.
the administration maintains,
the United States will be able
to increase its exports to Eu-
rope sharply.
AS Europe expands and pros
pers, it will need machinery
and other capital goods to
equip its factories. And pros
perity should increase Euro
pean demand for American
consumer goods.
Some Will Suffer
This happy outlook depends,
of course. on American ability
to compete vigorously on the
basis of price. quality and
service. And some American
industries are bound to suffer.
The trade record since the
Common Market was estab-
lished offers some evidence to
support optimism. Common
Market imports from the
United States increased 36 per
cent from 1858 to 1860. In
the same period, imports with
in the Common Market in
creased about so per cent.
If the United States fails to
compete in the Common Mar
ket, the administration warns,
the damage will go beyond loss
of export sales. American
companies would leap over the
tariff wall by building factories
inside the Common Market
in effect exporting both jobs
and capital.
United States investment in
Europe has been increasing for
some time. The administration
proposes to slow down the
trend by withdrawing some of
the tax concessions enjoyed
by foreign subsidiaries.
PrOtectionists Skeptical
Protectionists contend the
United States usually gives
away more than it receives in
tariff bargaining, and are
skeptical about chances that
the Common Market will offer
/ the United States really help
full concessions.
Besides, they maintain, the
Common Market will have to
buy from the United States no
matter how American tariff
policy shakes down.
Some conservatives also fear
that liberal trade between the
United States and the Com
mon Market would lead even
tually to complete merger.
They note that some hackers
of the administration have
been talking about trade
, partnership" and extension
of the Common Market
, throughout the Free World.
Although the President has
said the United States has no
intention of joining the Com
mon Market, concern persists
| that the liberal trade campaign
is step in the drive for world
, federalism. Senator Goldwater.
Republican of Arizona, has
warned that Europeans might
stream into the United States
seeking work.
Problems in Commonwealth
Britain's application for
, Common Market membership
has created c0Fnnlicatpd