free ebooks ==> www.ebook777.com www.ebook777.com free ebooks ==> www.ebook777.com FM.indd ii 11/25/2013 10:28:36 PM free ebooks ==> www.ebook777.com THE CUSTOMS UNION IS SUE www.ebook777.com FM.indd i 11/25/2013 10:28:35 PM free ebooks ==> www.ebook777.com FM.indd ii 11/25/2013 10:28:36 PM free ebooks ==> www.ebook777.com THE C U S T OMS U NION IS SUE Jacob Viner EDITED AND WITH AN INTRODUCTION BY Paul Oslington www.ebook777.com FM.indd iii 11/25/2013 10:28:36 PM free ebooks ==> www.ebook777.com Oxford University Press is a department of the University of Oxford It furthers the University’s objective of excellence in research, scholarship, and education by publishing worldwide Oxford New York Auckland Cape Town Dar es Salaam Hong Kong Karachi Kuala Lumpur Madrid Melbourne Mexico City Nairobi New Delhi Shanghai Taipei Toronto With offices in Argentina Austria Brazil Chile Czech Republic France Greece Guatemala Hungary Italy Japan Poland Portugal Singapore South Korea Switzerland Thailand Turkey Ukraine Vietnam Oxford is a registered trademark of Oxford University Press in the UK and certain other countries Published in the United States of America by Oxford University Press 198 Madison Avenue, New York, NY 10016 © Oxford University Press 2014 All rights reserved No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of Oxford University Press, or as expressly permitted by law, by license, or under terms agreed with the appropriate reproduction rights organization Inquiries concerning reproduction outside the scope of the above should be sent to the Rights Department, Oxford University Press, at the address above You must not circulate this work in any other form and you must impose this same condition on any acquirer Library of Congress Cataloging-in-Publication Data Viner, Jacob, 1892–1970 The customs union issue / Jacob Viner ; edited, with an Introduction by Paul Oslington pages cm Includes bibliographical references and index ISBN 978–0–19–975612–4 (alk paper) Customs unions I Oslington, Paul II Title HF1713.V52 2013 382’.91—dc23 2013010509 Printed in the United States of America on acid-free paper FM.indd iv 11/25/2013 10:28:36 PM free ebooks ==> www.ebook777.com CONTENTS Foreword to the 1950 Edition by George A. Finch | vii Preface by Gene Grossman | ix Acknowledgments | xi Introduction by Paul Oslington | xiii I Introduction | II The Compatibility of Customs Union with the Most-Favored-Nation Principle | The Criteria of a “Customs Union” | Diplomatic Controversies Arising out of Most-Favored-Nation Obligations of Members of Customs Unions | The Most-Favored-Nation Principle Not a Serious Barrier to Customs Unions | 13 III Exemption from Most-Favored-Nation Obligations of Preferential Arrangements other than Customs Union | 17 Imperial Preference | 18 Regional Agreements | 21 Plurilateral Agreements | 25 IV The Economics of Customs Unions | 51 Customs Union as an Approach to Free Trade | 51 v www.ebook777.com FM.indd v 11/25/2013 10:28:36 PM free ebooks ==> www.ebook777.com vi Contents Customs Union and the “Terms of Trade” | 69 Administrative Economies of Customs Union | 73 Revenue Duties | 81 The “Level” of the Customs Union Tariff | 82 Increased Tariff Protection as the Major Economic Objective of Customs Unions | 85 Cartels in Relation to Customs Unions | 94 The Allocation of Customs Revenues | 98 V Political Aspects of Customs Union | 103 The Location of Administrative Authority in Customs Unions | 103 Customs Union and Neutrality Obligations | 107 Customs Union and Political Unification | 115 The Austro-German Treaty of 1918 | 132 VI The Havana Charter and Customs Union | 136 The Most-Favored-Nation Principle | 136 Exemptions from Most-Favored-Nations Obligations of Customs Unions, Free-Trade Areas, and Interim Agreements | 140 Exemptions from Most-Favored-Nation Obligations of Agreements in the Interest of Economic Development, Including Regional Agreements | 145 Relations with Non-Members | 151 Significance of the Havana Charter for the Customs Union Question | 152 VII Prospects for Customs Unions | 162 Customs Unions Now in Operation or in Active Process of Negotiation | 162 Customs Union in Western Europe | 164 Obstacles to the Formation of Customs Unions | 171 B I B L IO G R A PH Y I NDEX FM.indd vi | 177 | 187 11/25/2013 10:28:37 PM free ebooks ==> www.ebook777.com FOREWORD TO THE 1950 EDITION GEORGE A. FINCH Carnegie Endowment for International Peace Among the projects undertaken by the Carnegie Endowment during the war years under its program of providing materials which would be helpful in the solution of postwar problems was that of making available information regarding the arrangements and experience of customs unions A collection of some 250 or more documents, beginning with the Germans’ Zollverein and including some proposals for customs unions which did not materialize, was assembled in original English texts or in English translation Dr. Jacob Viner, outstanding economist and author, on the basis of a critical examination and study of the texts thus made available and experience in connection with past unions, offers the present study as an attempt to throw some light on the possibilities and the limitations of customs unions as a method of regulating international commercial relations Formerly Professor of Economics of the University of Chicago, Dr. Viner is now with the Department of Economics and Social Institutions of Princeton University He has also been associated with the United States Tariff Commission, the United States Shipping vii www.ebook777.com FM.indd vii 11/25/2013 10:28:37 PM free ebooks ==> www.ebook777.com viii Foreword to the 1950 Edition Board, and the Treasury Department, and since 1943 has served as consultant to the Department of State He speaks with authority, and his study is a challenging contribution to the discussion of this timely subject In view of the unique value of the collection of documents, the present study is supplemented by a list of the customs union treaties, conventions, and decrees included in the collection, with source references A comprehensive bibliography completes the work The collection, in typewritten form, is available for consultation in the Library of the Endowment The present volume constitutes the tenth and concluding number of the Endowment’s series of “Studies in the Administration of International Law and Organization.” George A. Finch Former Director of the Division of International Law Washington DC January 3, 1950 FM.indd viii 11/25/2013 10:28:37 PM free ebooks ==> www.ebook777.com 194 Index Macfie, Alec, xvi Manitoba, xx Mantoux, Etienne, on removal of trade barriers, 77n Marshall Plan, 1, 164–8 McCulloch, JR, xvii Meade, James, xxxi Meardon, Stephen, xviii Mecklenburg-Schwerin, 15 Merlin, M., on allocation of customs revenue, 100 Metternich, on Franco-Belgian customs union project, 110n Michaely, Michael, xxxvi Ministers of Foreign Affairs of the American Republics, Third Meeting, resolutions, 46; First and Second Meetings, 47n “Mitteleuropa,” 132 Modena, 7–9, 101, 107 Moldavia and Wallachia, 121 Molinari, G de on excise taxes, 76n on transit duties, 80n Monaco, 13, 104–5, 130, 162, 163 Monetary and Economic Conference (London, 1933), 39–45 Montevideo Conference of the American States (1933), on multilateral agreements, 45 Most-favored-nation principle, xvii, xviii, xix, xxiii compatibility with customs union, 4–16 conditional interpretation of, 15n., 26, 37–8, 72, 158 Viner_Index.indd 194 controversies arising out of m.f.n obligations, 6–13, 112 Draft Agenda of London Monetary and Economic Conference, text of m.f.n clause, 40–1 exemptions from m.f.n obligations in re preferential arrangements short of customs union, 17–50; Havana provisions re exemptions, 140–51 See also Economic development; Free-trade areas; Imperial preference; Interim agreements; Plurilateral agreements; Regional clauses Havana Charter, 137–40 resolutions of Paris Conference (1916), 28–30 unconditional interpretation of, 5, 138–9 waiver of m.f.n obligations, 7, 14, 37–8 Motz, von (Prussian finance minister), report on the Zollverein, 124n Multilateral agreements See Plurilateral agreements Municipal vs international character of customs union institutions, Austro-German negotiations (1917), 111n Napoleon III, Nassau, 126 Natal, 78, 78n Nationalism vs economic interests, 128–32 6/7/2007 10:10:32 AM free ebooks ==> www.ebook777.com Index Netherlands, 37, 38, 84n., 128n Neutrality obligations and customs union, 107–15 Nigeria-British Cameroons, 162 Ninth International Conference of American States (1948), 47 “Nominal duties,” 52, 53 “Nordic clause,” 21 Northern Rhodesia, 101, 162 Norway, 38, 127, 165n O’Brien, Denis xvi Ohlin, Bertil, xvi Oldenburg, 126 Open-door clauses, 18, 20, 140n Orange Free State (Orange River Colony), 78–9, 86 Oslo Group, 37 Ottawa Agreement (1932), 19 Ottawa Conference (1932), on regional agreements, 24, 37 Ouchy Convention (1932), 36–8, 44 Palestine-Syria, 24n Palmerston, on Franco-Belgian customs union proposal, 109 Pan American Resolutions (1933–42), 45–8 See also Latin America Panama, 49, 162 Paraguay, 46 Paris Economic Conference (1916), 28–30 Parma, Philippines, 128n Peace Treaty with Germany (1918), 30 195 Permanent Court of International Justice, Austro-German Anchluss question, 11n., 113 “Platonic clauses,” 23 Plurilateral agreements, 20, 21n., 25–50, 158 defined, 25–6 League of Nations on, 31–6, 39 Plurilateral clauses, 25–6, 34–6; examples of, 35n Poel, Jean van der, cited, 79n Poland, 100–1 Political aspects of customs union, 103–35 See also Administration of customs unions; Austria-Hungary (treaty negotiations, 1917–1918); AustroGerman Anschluss (1931); Franco-Belgian customs union project; Neutrality obligations; Political independence; Political unification Political independence, compatibility of customs union with maintenance of, 10–13, 107–15, 129–31, 158n Political unification and customs union, 107, 115–32 Portugal-Spain, treaty of 1893, 23n., 24n Potter, P B., on regionalism, 155n Prairie Provinces of Canada, 86 www.ebook777.com Viner_Index.indd 195 6/7/2007 10:10:32 AM free ebooks ==> www.ebook777.com 196 Index Preferential arrangements other than customs union, 17–50 See also Economic development; European economic union; Havana Charter; Imperial preference; Interim agreements; Plurilateral agreements; Regional clauses Protection and customs union, 51ff passim See also Tariff protection Protective duties, 52, 60, 68, 81–2, 84 Proximity, economic significance of, 154–5 Prussia, 9, 77, 106, 108, 109 rivalry with Austria, 87, 123–6 role in evolution of Zollverein, 105–6, 106n., 123–7 tariff unification of, 120 warning to Luxemburg, 130n Puerto Rico, 19, 75n Quantitative restrictions, 38, 38n., 74n., 91, 138–9, 140n., 163, 167 Quito Charter, 48–50, 50n., 162n Railway rates, 77–8, 79, 87n., 88 Rechberg, von (Prussian foreign minister), 125 Reciprocity agreements, 26, 48, 72, 121 Regional agreements See Regional clauses; Regional preferential agreements Viner_Index.indd 196 Regional clauses distinguishing features, 25–6 economic factors unfavorable to use of, 22–3 examples of, 21–2, 23n Latin American practice, 22, 23, 45–6, 88–91 propinquity as justification for, 21–2 Regional preferential agreements, Havana provisions, 145–51, 154–5; text, 147–51 Renan, cited, 129 Revenue See Customs revenue Revenue duties, 81–2 Rhodesia See Northern Rhodesia; Southern Rhodesia Ridder, Alfred de, on FrancoBelgian customs union, 110n Riedl, Richard, on group agreements, 23n., 24n., 32, 33n Rival industries See Internal competition Robbins, Lionel, xvi, xxiii; on economics of customs union, 65,67n Roosevelt, Franklin D., 39, 45, 72 Roxas, Bishop (1665), project for political alliance through economic union, 117 Ruanda-Urundi-Belgian Congo, 100, 162 Rumania See Moldavia and Wallachia Russia, Czarist, 121 6/7/2007 10:10:32 AM free ebooks ==> www.ebook777.com Index Saar, 128 Saint-Evremond, 62n Saint-Germain, Treaty of (1919), 111, 112 San Marino, 162, 163 Sardinia, 7, 8, Saxony, 9n., 99, passim Scandinavia, 165 Schleswig-Holstein, 126 Schmoller, Gustav, on the Zollverein, 118–19 Schüller, R See Gratz and Schüller Schwarzburg-Sondershausen, 123 Schwarzenberger, Georg, on m.f.n principle, 13n Scotland, 118, 118n., 130 Scott, W R., on the EnglishScottish union, 118 Scottish-English union, 118, 130 Serbia, 10, 12 Seven-Weeks War (1866), 126 Sismondi, on transit duties, 81n Smith, Adam, xv; on neighborhood in international relations, 22n Smoot-Hawley Act (1930), 33 Smuggling, 105, 131 Sokolnikoff, M (Soviet delegate), on cartels, 95 South African Customs Union, 77–9, 86, 100–1, 122 Southern Rhodesia, 101, 162 Sovereignty, 106–7, 111n., 112, 131n., 132, 134 See also Political independence Spain, 22, 23n., 24n., 35n., 117, 121,128n 197 Study Group for the European Customs Union, Sumptuary measures, 54n Sweden, 38, 58, 127, 165n Switzerland, 34–5, 58, 77n., 87n., 121, 162, 165n Switzerland-Belgo-Luxemburg treaty (1929), plurilateral clause, 20, 31–6 Syria, 24n., 162, 163 Tanganyika, 87, 88, 162 Tariff assimilation, 19–21, 74n Tariff bargaining bilateral, 26, 175 collective, 70–1 Tariff levels, 13–14, 32, 42, 51, 52, 66–8, 113n Tariff protection, increase of, major economic objective of customs union, 85–94 Tariff unification, national, growth of, 120ff Taussig, Frank, xvii Termination of commercial treaties, 14–15 Terms of trade, 69–73 The Customs Union Issue arguments, xxiv assessment, xxxix politics xxiv reviews, xxx writing, xxiv Togoland, 162 Trade Creation and Diversion, xix, xxvi Transit duties, 9n., 77, 77n., 80, 81n., 106, 123, 171 Transvaal, 78–80, 78n., 86, 87n www.ebook777.com Viner_Index.indd 197 6/7/2007 10:10:32 AM free ebooks ==> www.ebook777.com 198 Index Trieste, 128 Turkey, 121, 166 Venezuela, 49, 162 Viner, Jacob, xv Uganda, 88, 162 Union of South Africa, 101, 122, 162, 163 See also South African Customs Union United Kingdom-Spain, commercial treaty (1922), plurilateral clause, 5n United Nations Conference on Trade and Employment (1947–48), 137, 137n United Provinces, 128n United States, 21n., 23n., 28–30, 73, 73n., 76, 86, 121–2 commercial competition with Europe, 26–8, 71–2, 86, 94–7 and customs union, 1, 61, 61n and Havana Charter, 137–8 liberalization of commercial policy, 39, 42–3, 45–9 Marshall Plan, 1, 164–8 and m.f.n principle, 15, 25, 38, 71 and colonial preference, 18, 20, 61, 61n., 138, 145n and Western European economic union, 164–71 passim United States Congress, on Western European customs union, 166 United States Tariff Acts (1922, 1930), on imperial preference, 20 Waldeck, 123 Wallachia, 121 Western Australia, 86, 101, 127 Western Europe, customs union in, 164–71 Wilcox, Clair, on U S position re preferences and customs union, 61n Wilson, Woodrow, 29 World Economic Conference (Geneva, 1927), on group agreements, 31, 33 World Economic Conference (London, 1933), on regional agreements, 24 Württemberg, 70, passim Viner_Index.indd 198 “Zollanschluss,” 104, 104n Zollverein, 6–7, 14, 118, 123–4 administration of, 9n., 75, 76n., 98–9, 105–7, 123–7 allocation of customs revenues, 98–9 Customs Council, 126 Customs Parliament, 126 evolution of, 123–7 role of Prussia in, 105–6, 106n., 123–7 tariff policy, 87 tariff unification, 121 transit duties, 77 Zwischenzolle, 133 6/7/2007 10:10:32 AM free ebooks ==> www.ebook777.com www.ebook777.com Viner_Index.indd 199 6/7/2007 10:10:32 AM free ebooks ==> www.ebook777.com Viner_Index.indd 200 6/7/2007 10:10:32 AM free ebooks ==> www.ebook777.com www.ebook777.com Viner_Index.indd 201 6/7/2007 10:10:32 AM free ebooks ==> www.ebook777.com Viner_Index.indd 202 6/7/2007 10:10:32 AM free ebooks ==> www.ebook777.com www.ebook777.com Viner_Index.indd 203 6/7/2007 10:10:32 AM free ebooks ==> www.ebook777.com Viner_Index.indd 204 6/7/2007 10:10:32 AM free ebooks ==> www.ebook777.com www.ebook777.com Viner_Index.indd 205 6/7/2007 10:10:33 AM free ebooks ==> www.ebook777.com Viner_Index.indd 206 6/7/2007 10:10:33 AM free ebooks ==> www.ebook777.com www.ebook777.com Viner_Index.indd 207 6/7/2007 10:10:33 AM free ebooks ==> www.ebook777.com Viner_Index.indd 208 6/7/2007 10:10:33 AM ... [43]) and, on the other hand, “other commodities which one of the members of the customs union will now newly import from the other whereas before the customs union it imported them from a third... to the customs? ?union; (4) the greater the differences in unit-costs for protected industries of the same kind as between the different parts of the customs union, and therefore the greater the. .. terms of its consequences for the customs union area alone or for the world as a whole: (1) the larger the economic area of the customs union and therefore the greater the potential scope for internal