Model Answer
0 min readIntroduction
The journey from the European Economic Community (EEC) to the European Union (EU) is a testament to the power of progressive integration, with the concept of free trade serving as its foundational bedrock. Established by the Treaty of Rome in 1957, the EEC's primary objective was to foster economic interdependence among its six founding members—Belgium, France, West Germany, Italy, Luxembourg, and the Netherlands—thereby preventing future conflicts. This economic cooperation, particularly through the gradual dismantling of trade barriers, created a shared interest and a sense of collective prosperity that proved instrumental in paving the way for the more comprehensive political and economic union embodied by the European Union. The evolution of free trade from a mere customs union to a full-fledged single market fundamentally reshaped the European landscape.
The Genesis of Free Trade: European Economic Community (EEC)
The European Economic Community (EEC), often referred to as the Common Market, was founded on the principle that economic integration would lead to political stability. The core mechanism for achieving this was the establishment of a customs union and a common market. The Treaty of Rome, signed in 1957, laid the groundwork for this by:
- Abolishing Customs Duties and Quotas: It mandated the progressive reduction and eventual elimination of tariffs and quantitative restrictions on goods traded between member states. This was a direct move towards a free trade area.
- Establishing a Common External Tariff (CET): Unlike a simple free trade area, the EEC established a common external tariff on imports from outside the Community, creating a unified trading bloc. This customs union was a crucial step in distinguishing the EEC from a mere free-trade association.
- Laying the Foundation for "Four Freedoms": While initially focused on goods, the Treaty of Rome also envisioned the free movement of people, services, and capital, which would eventually become the cornerstone of the single market.
Deepening Integration: The Single European Act (SEA)
By the mid-1980s, despite the progress made, significant non-tariff barriers still impeded true free trade. The Single European Act (SEA), signed in 1986 and entering into force in 1987, was a pivotal moment in accelerating economic integration.
- Commitment to a Single Market: The SEA explicitly set the goal of creating an internal market by December 31, 1992, "comprising an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured."
- Removal of Non-Tariff Barriers: The Act focused on tackling the myriad of technical, legal, and bureaucratic barriers that still hindered cross-border trade and investment. This involved harmonizing standards and regulations across member states.
- Enhanced Decision-Making: To facilitate the legislative process required to achieve the single market, the SEA introduced Qualified Majority Voting (QMV) in certain areas, reducing the need for unanimous consent and speeding up reforms.
The Culmination: Maastricht Treaty and the European Union
The completion of the single market under the impetus of the SEA created an environment ripe for deeper political and monetary integration. The Maastricht Treaty (officially the Treaty on European Union), signed in 1992 and effective from November 1, 1993, formally established the European Union, building directly upon the foundations laid by free trade and economic cooperation.
- Transformation from EEC to EC: The European Economic Community (EEC) was renamed the European Community (EC) and became the first of the EU's three "pillars," signifying a broader scope beyond purely economic matters.
- Economic and Monetary Union (EMU): The treaty laid the foundation for an Economic and Monetary Union, ultimately leading to the adoption of a single currency, the Euro. This was a direct outgrowth of the economic interdependence fostered by free trade. The free movement of capital, in particular, was a precursor to this monetary union.
- Broader Objectives: While maintaining economic integration, the Maastricht Treaty introduced common foreign and security policies and cooperation in justice and home affairs, demonstrating how economic success facilitated political ambition.
Extent of Contribution: A Multifaceted Role
The concept of free trade undeniably played a central, almost indispensable, role in the formation of the European Union. Its contribution can be examined through several lenses:
Economic Prosperity and Interdependence
The abolition of trade barriers led to significant economic growth, increased competition, and greater efficiency within the EEC. This shared prosperity fostered a vested interest in continued cooperation, making political integration a logical next step.
- Trade Growth: Between 1958 and 1968, trade among the EEC's members quadrupled in value, demonstrating the direct impact of free trade.
- Consumer Benefits: Lower prices and greater choice for consumers resulted from the removal of tariffs and trade barriers, building public support for the integration project.
Building Institutional Frameworks
The mechanisms and institutions created to manage the free movement of goods (e.g., European Commission, European Court of Justice) subsequently formed the backbone of the broader European Union's governance structure.
| Treaty/Act | Key Free Trade Provisions | Contribution to EU Formation |
|---|---|---|
| Treaty of Rome (1957) | Customs union, abolition of internal tariffs, common external tariff, foundation for "four freedoms" | Established the core economic integration model, created initial interdependence. |
| Single European Act (1986) | Completion of the Single Market, removal of non-tariff barriers, enhanced QMV | Accelerated the realization of full internal market, provided impetus for deeper political union by demonstrating economic benefits of deeper integration. |
| Maastricht Treaty (1992) | Formal establishment of EMU (leading to Euro), broadened scope beyond economics (CFSP, JHA) | Culminated the economic integration by establishing monetary union, directly leading to the political entity of the European Union. |
Facilitating Political Will
The economic successes of the EEC provided the political momentum and confidence for member states to pursue deeper, more ambitious forms of integration, culminating in the creation of the EU. The shared economic goals often served as a less contentious entry point for cooperation, which then expanded into political and social spheres.
- "Ever Closer Union": The initial treaties contained the ambition of an "ever closer union," and economic integration was seen as the primary vehicle for achieving this.
However, it is also important to acknowledge that while free trade was paramount, other factors also contributed significantly. These include the desire for peace and stability post-WWII, the need for a stronger European voice on the global stage, and shared democratic values. Free trade acted as the primary engine, creating the necessary conditions and incentives for these broader political aspirations to be realized.
Conclusion
The concept of free trade within the European Economic Community served as the indispensable driving force behind the eventual formation of the European Union. From the abolition of customs duties and the creation of a common market under the Treaty of Rome, to the ambitious completion of the Single Market through the Single European Act, free trade fostered an unprecedented level of economic interdependence and prosperity. This economic integration not only dismantled trade barriers but also laid the institutional and psychological groundwork for deeper political cooperation. While other factors like the pursuit of peace and a stronger geopolitical standing were crucial, it was the tangible benefits and shared interests generated by free trade that provided the continuous momentum and political will necessary to transform a loose economic bloc into the comprehensive European Union.
Answer Length
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