Sons of the Common Market

If you can't join Europe's Common Market, maybe you can lick it by forming one of your own--or so goes the thinking these days among nations from Chile to the Congo. In Cairo alone over the past fortnight, the groundwork was laid for two new common markets; one would link five Arab nations, and another six African countries (Egypt judiciously proposes to join both). Africa, in fact, is building three common markets. Two more have been launched in Latin America, and an Asian market has been proposed by Malaya, Thailand and the Philippines.

Prime movers in this proliferation of trade blocs are the underdeveloped nations, which live by exporting raw materials, and fear that the common tariff wall being built by Europe's Six will freeze their products out of traditional markets. By developing their own customs unions--each with monopolies on materials that Europe needs and consumers that Europe wants--the outsiders figure that they can deal from strength against Europe, or the U.S. As yet, however, most of the "little common markets" consist largely of ambitious names.

Yes, We Have Bananas. Most of the proposed customs unions lack the homogeneity of the European Six; often their members belong to different currency blocs and lack common boundaries. The members of the "Casablanca bloc" that met last week in Cairo--Egypt. Morocco, Algeria, Ghana, Guinea and Mali--found that transportation among them is so primitive that Ghana still finds it easier to import cotton from Europe than from Egypt. Hoping to change this, the Casablanca powers agreed to expand their shipping, create an airline cooperative, and start a joint payments union. But, like nearly all the little common markets, the Casablanca-bloc nations produce much the same things and have little to sell to one another. Mused an economist from Morocco, which still does two-thirds of its foreign trade with Europe's Common Market: "No matter how much good will we have toward Ghana and Guinea, there's only so much cocoa and bananas we can absorb." Similar hurdles also confront Africa's two other common markets. One of them is a loose, twelve-nation union largely consisting of former French West African colonies. It is hampered by the reluctance of richer members such as Cameroun and Gabon to get too involved with such poorer sisters as Chad. The other African common market is a bloc of four East African states--Tanganyika, Kenya, Uganda and Zanzibar--that are in various stages of emerging from British colonialism.

Leaders of these two common markets talk grandly of forming a single black African market in the future. But to create a working common market takes more than a customs union: coordination of fiscal, agricultural and transport policy is also necessary--and so far, the newly independent nations of Africa show scant readiness to surrender any sovereignty.

In the Soup. Most promising of the new common markets is the two-year-old Free Trade Zone of nine Latin American nations--Argentina, Brazil, Chile, Mexico, Colombia, Uruguay, Peru, Ecuador and Paraguay. Mexico's President Adolfo Lopez Mateos and Brazil's President Joao Goulart are already laying plans to freeze out all imports of autos and auto parts by arranging for each zone member to specialize in particular auto components. (In practice, U.S. and European automakers will simply make cars inside the Latin zone.) The Latin Americans have shown unexpected readiness to compromise their differences, last January agreed to 2,500 mutual tariff cuts averaging 27% each.

Even in Latin America, however, the road to economic union is still potholed. In their own Central American common market, Guatemala, Nicaragua, El Salvador and Honduras have agreed to erase tariffs on 200 items within the past two years, aim for fully free trade with one another and a single external tariff within a decade. A scheme to grant each member a monopoly on producing certain goods has led mostly to shoddier products. Grumped one Guatemalan housewife last week: "I used to pay 35-c-for a can of imported soup. Now I have to pay 45-c- for Central American soup and risk ptomaine poisoning to boot." But already, trade among the Central American partners has increased substantially, and the future of the union looks bright enough that Costa Rica is considering joining.

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