Our failure to press ahead with European integration in the late 1940s still haunts British politics nowby Paul Wallace / April 12, 2019 / Leave a comment
Now that Britain has now got a breathing-space until the end of October and following Theresa May’s adoption of cross-party talks with Labour, a compromise through a permanent customs union with the European Union appears the mostfeasible way out of the Brexit maze. Among the four options considered in MPs’ indicative votes on 1st April it was this proposal that came closest to gaining a majority. Michel Barnier, the EU’s chief negotiator, said on Tuesday that a customs union could be added “within a few hours or days” to the political declaration setting out the framework for Britain’s future trading arrangement with Europe.
If a customs union does indeed become the way to secure Brexit, there will be a bitter historical irony. The story of the original failure to become a founder member of the common market in the late 1950s has often been told, not least since it helps to explain why latecomer Britain found the European club uncongenial. Less familiar is the episode soon after the end of the second world war when Britain came close to leading the way in forming a European customs union and thus directing the course of integration on its own terms. The story helps us to understand Britain’s fractious relationship with the EU today.
The overwhelming priority after the war ended in 1945 was to restore economies brought low in the conflict and crippled by protectionist barriers erected in the 1930s. Freeing trade within a Europe blocked by high tariffs and quotas was an obvious remedy. Already some countries in western Europe were taking the medicine. Belgium, the Netherlands and Luxembourg pressed ahead with the Benelux customs union, which their leaders had already mapped out while in exile in London during the war.
A wider international push for freer trade did not preclude customs unions. The General Agreement on Tariffs and Trade (GATT), signed by 23 countries in Geneva in October 1947, permitted customs unions even though these contravened the principle of opening up markets on equal terms to all trading partners covered by the GATT. Most important of all, America backed closer integration within Europe and expected concrete results in response to its historic offer of aid, set out by George Marshall, the secretary of state, in June 1947.
Under pressure from America the Labour government thought long and hard about adopting a customs…