Common Market: Breakthrough in Brussels

IT was a long night at the Common Market's Charlemagne Building in Brussels. On the top floor of the glass-sheathed, 15-story headquarters, the Foreign Ministers of the six member nations struggled to define the conditions for British entry on London's third attempt to gain admission to the European Economic Community. One floor below, the British team, headed by Chief Negotiator Geoffrey Rippon, passed the time playing bridge and working on position papers. On the ground floor, some 200 newsmen waited amid a litter of empty beer bottles, empty coffee cups and sandwich crusts for an end to the tough bargaining session.

At 4:30 a.m., as a gray dawn broke over Brussels, the newsmen were invited to go upstairs. "A major breakthrough?" inquired one reporter. "D'accord" replied Rippon, speaking fittingly in French. "The dialogue of the deaf is over." French Foreign Minister Maurice Schumann also seemed pleased. "The results," he said, "need no commentary." Schumann added that the entire negotiations could be completed by the end of June. Since Ireland, Denmark and Norway seek to join at the same time as Britain, the Six could become the Ten by 1973--with a larger population than either Russia or the U.S. and a gross national product second only to America's ($1 trillion-plus v. $660 billion).

Measurably Mellowed. The sudden surprising burst of progress established a favorable climate for the summit meeting in Paris this week between France's President Georges Pompidou and Britain's Prime Minister Edward Heath. The breakthrough came on the second evening of the two-day bargaining session in Brussels. The first day had ended poorly. Rippon was adamant in his demands for assurances that Commonwealth sugar-producing countries, such as Jamaica, Mauritius and Fiji, be granted special preferences to sell their commodity to the Common Market. The Six refused. "They tried to hustle us as if we were a little girl on whom they had designs," the French press quoted Schumann as saying. "Well, the little girl isn't so little. The Common Market is 14 years old and won't allow itself to be treated like that."

The next day Schumann went to Paris for the weekly Cabinet meeting. When he returned that evening, France's position had measurably mellowed. To a large degree, the Germans were responsible for that. Earlier in the week Bonn decided to cope with its nagging inflation by allowing the mark to float in relation to other currencies. In terms of national interest, the decision was perfectly defensible, for nothing upsets the West German voter so much as monetary instability. In the context of the Common Market, however, the decision was highhanded, for it upset the parity rates among the currencies of the Six (see BUSINESS). But the German action helped to convince Pompidou that the British were needed in the EEC to serve as a counterweight to the Germans. Moreover, Pompidou apparently felt that France could not afford the stigma of once more blocking progress toward a united Western Europe. Consequently, as the ministers took their places around a hollow square of teak tables in the Charlemagne Building, the French were prepared to soften their positions on three major items:

COMMONWEALTH SUGAR. Under the guidance of Schumann, who is presently serving as chairman of the EEC ministerial council, the Six drafted a pledge to protect the Commonwealth's sugar islands. It said that members of the "enlarged community" would join to "safeguard the interests of countries whose economies depend to a large degree on primary products, particularly sugar." Rippon felt that the wording was sufficiently strong. After all, if there were any inclination to welsh on that promise once Britain was inside the Market, London could threaten to make things difficult for the one-crop French African countries that are protected by special trading arrangements.

AGRICULTURAL TARIFFS. Britain wants several years to adjust from the import of lower-priced U.S. and Commonwealth foodstuffs to the Common Market's high-priced produce, which is protected by tariffs. The switch will mean a rise of as much as 28% in British food costs. The Six agreed to a timetable that allows Britain five crop years after entry to make the change. As a result, price markups on foodstuffs in Britain will come gradually, and the full impact on the British cost of living will not be felt until the late 1970s. The Benelux representatives, whose farmers grow mainly fruits and vegetables, were the last holdouts against such generous terms. Said Dutch Foreign Minister Joseph Luns when the compromise was presented to him: "My tomato heart bleeds, but I accept."

BRITISH DUES. The French have long insisted that Britain, from the start, should pay a large share of the EEC budget. Over a five-year transitional period, Britain's dues could total 25% of the budget, which is expected to reach $4.4 billion by 1973. The British initially offered to start at 3% and work up to 15% in five years--a proposal that Pompidou rejected as ludicrously low. Now the French have agreed in principle to a plan that would keep Britain's eventual dues in line with its share of the Common Market's G.N.P.--about 20%. More importantly, the plan would provide extra time for "correctives" if Britain's budget payments to the EEC overtax the Exchequer. The British can probably live with that arrangement.

That leaves two major issues still unsolved. One is the role of British sterling. Among other things, the French fear that the Common Market would inherit the responsibility for sterling which, as a reserve currency, is subject to the stresses of the sort that have recently beset the dollar. As a result, the French want London to discourage foreign countries from holding sterling balances. The other issue is New Zealand, whose entire economy depends on exports of lamb, butter and other agricultural products to Britain. Last month New Zealand's Premier Sir Keith Holyoake presented his country's case to Pompidou, who acknowledged New Zealand's ties of "emotion, sympathy, culture and blood" to Europe. But Pompidou also told Sir Keith that the New Zealand issue was so difficult that it would probably be the last one to be resolved.

Severe Setback. The swift and unexpected progress in Brussels alarmed antiMarket forces in Britain. In the House of Commons, one Labor M.P. called the agreement "a sellout advertised as a breakthrough." Another cried: "There has been a climb-down!" Though 100 Labor M.P.s last week signed an open declaration in favor of British entry into the EEC, most of the other 184 Laborites in Commons are strongly antiMarket. So, too, are Britain's trade unions, the major source of Labor's power. Labor Party Leader Harold Wilson, who left 10 Downing Street in 1970 as a nominal advocate of Common Market membership for Britain, is striking an ambivalent note. Recently he has been muttering about the danger of "blackleg" laborers from the Continent who might take away good jobs from good Englishmen if Britain joined the Market without sufficient safeguards against the influx of foreign labor.

There is little doubt that if Wilson found Heath in a vulnerable parliamentary position over the Market issue, he would strike at once--to kill. Moreover, the British public, which overwhelmingly favored seeking admission only five years ago, has turned heavily against joining. The reasons range from anxiety about higher food costs to an abiding fear that membership would extinguish the British way of life.

Meanwhile, Heath is under heavy attack at home for a variety of reasons. Last week's British local elections were a disaster for Heath and his Conservatives--even more than is normally the case in off-year balloting. Though only city and country council seats were at stake, the campaign was fought largely on national issues. The main one was Heath's anti-inflationary economic policy, which has allowed unemployment to climb to 3.4%, an alarmingly high figure by British standards. The Labor Party gained a grand total of 2,083 new council seats and lost only eight. By contrast, the Tories lost 1,982 seats and won only 39.

When Heath and Pompidou meet in Paris, their most difficult task will be to raise the level of negotiations from the grocery basket to the international political sphere. That may be easier said than done. Heath does not want to become the posthumous hero, politically speaking, of a future united Europe--despite his 20-year devotion to that ideal. Pompidou is still torn between his visceral Gallic fear of the Germans and his more intellectual fear of Britain as a Trojan horse for U.S. interests on the Continent. Yet both are also aware that unless Britain joins the Six, Western Europe is never likely to achieve the size and power to counterbalance the growing Soviet pressures on Europe and to deal as an equal with the U.S.

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