Introduction
From 1963 to 1967, the European Economic Community (EEC), the United States and the other major developed countries negotiated the reduction of their trade barriers in the framework of the Kennedy Round, which took place in Geneva under the aegis of the General Agreement on Tariffs and Trade (GATT). The Treaty of Rome (1957) had assigned the task of negotiating on behalf of EEC member states to the European Commission, but the debut of this supranational institution in world affairs was not so clear cut. In 1963, at a meeting in Geneva on the treatment of grains, the Commission's representative, the Dutch official Theodorus Hijzen, found himself ‘flanked by the French and the German delegates' to GATT and ‘from time to time the French delegate [whispered] fiercely in Hijzen's ear’.Footnote 1 Close Franco–West German oversight effectively muzzled Hijzen, who found it difficult to make simple statements. By the final stage of the Kennedy Round four years later, however, things had changed: the six member states of the EEC had left the negotiating room, leaving Jean Rey, the Belgian member of the Commission responsible for external relations and the EEC's chief negotiator, to bargain alone on behalf of the Community. The shift in the stance of the Commission's negotiating role is telling: for the first time in its history, the Community spoke with a single voice on behalf of all the member states.
Trade and tariffs were of foremost importance in the establishment and evolution of the European Union (EU). Trade policy was the first field in which the original members pooled their sovereignty, and international trade was the first area in which the EEC established itself as a single actor. By extension, an analysis of trade policy-making is of pivotal significance in ascertaining how the EU and its institutions have developed. Historians, by and large, have left the subject of EU trade policy to political scientists, and have instead analysed subjects such as EU policy-making and the role of the Commission and the Council of Ministers in other fields, for example the enlargement of the Community or the development of the Common Agricultural Policy (CAP).Footnote 2 Only Piers Ludlow has covered this subject, concluding that the national interests of the six founding members of the EEC persisted and that the Commission was subject to the oversight, control and authority of national representatives on the EEC Council of Ministers.Footnote 3
By establishing the EEC with a customs union at its basis, the Treaty of Rome shifted the authority to negotiate over trade from the member states to the Community and divided overall policy responsibility for handling external trade negotiations between the Commission and the Council of Ministers. However, the Treaty contained only basic provisions on the respective role of the two institutions, opening the way to the Commission's attempt to promote its influence and the parallel effort of the Council of Ministers to hold the supranational institution at bay.
This article investigates EEC trade policy-making in the Kennedy Round negotiations from an historical point of view. These talks exerted a major influence on the development of the Community as they tested its capacity to function in an international forum and establish its place in the world trade regime.Footnote 4 The focus is on the role of the Commission in relation to that of the member states and on their interplay at two distinct moments: the negotiations in Brussels for establishing a common Community position and the bargaining in Geneva between the Commission and the other participants in the Kennedy Round. This article assesses the Commission's role in order to understand in what respects and under which conditions it could influence policy outcomes. In doing so, the article questions the apparent Commission triumph in an intra-EEC power struggle and asks whether the Commission's authority was decisive in reaching an agreement in Brussels and subsequently in Geneva, and whether the final outcome resembled the Commission's proposals and preferences.
The relevance of this article extends far beyond trade, however, and provides material for a comparative analysis of the role of EU institutions in a range of other policy fields. Moreover, it sheds light on the circumstances that push member states to delegate authority to the supranational institution of the Commission and their attitude towards supranationality, a key feature in the development of contemporary Europe. Equally importantly, by focusing on the 1960s, this article offers scope for a study in the shifts of EU trade policy-making since its origins.
The preferences of member states and the Commission for the GATT talks
In 1962, the Kennedy administration began promoting a new round of GATT talks, which came to be known as the Kennedy Round. While reaffirming its support for European integration, the United States government looked with apprehension at the possibility that the EEC could develop into an inward-looking bloc, thus weakening the GATT multilateral system and hurting US trade interests. Worse still, the economic rivalry between the two sides of the Atlantic could then extend to military and political fields. These concerns, already discussed by the Eisenhower administration, became more pressing when President Kennedy entered the White House in 1961 because of two factors: the deteriorating situation of the US balance of payments – and the negative consequences they had on the international monetary system – and the challenging policy positions of the French president, Charles de Gaulle. Against this backdrop, the search for ways to deal with evolving relations between Western Europe and the United States became urgent and was further amplified by the British bid to join the EEC, announced in 1961.Footnote 5
Washington therefore proposed a new GATT round that would seek a general reduction of duties by the uniform percentage of 50% and, in some cases, even their elimination. Moreover, it suggested that agriculture, a sector fenced off from the GATT legal system since 1947, should also be included in the negotiations. The aim was to limit the protectionist scope of the Common Agricultural Policy (CAP) that the EEC had been elaborating since 1958. The sweeping liberalisation of international trade was aimed at reducing EEC trade discrimination, favouring US exports and reinforcing the GATT multilateral system. Ultimately, it aimed to link the two sides of the Atlantic within a low-tariff trade area, strengthening their unity through greater economic interdependence. The GATT round was the trade element of President Kennedy's grand design for an Atlantic partnership between equals.Footnote 6
The Six were aware of the political and economic importance of Kennedy's initiative. By attending the new GATT round, they would be able to define how regional integration would be complemented by multilateral liberalisation and, thus, the stance of the EEC in world trade. Moreover, France's EEC partners would have to take a position on the Community's stance in the Atlantic alliance, clarifying whether they agreed with de Gaulle's challenging policy. Thus the reaction of the Six would be of fundamental importance for the EEC, the GATT multilateral regime and the Atlantic alliance.
Each of the Six responded positively. They all had major trade interests outside the EEC and tariff reductions at a multilateral level would therefore allow them to sustain the ongoing growth of their exports to the United States and the rest of Western Europe.Footnote 7 Moreover, negotiating with the EEC's single voice increased their bargaining power in tariff negotiations with the United States. Even so, the Six, and by no means only the French, had no intention of drastically reducing or eliminating their tariff protection. The Common External Tariff (CET) was seen as one of the fundamental elements of EEC identity and economy, which was still not sufficiently developed to survive its dismantling. Furthermore, they perceived Kennedy's declared intention of drastically reducing duties as an attempt to weaken the EEC. The notion of an Atlantic partnership between equals to be built upon deeper economic integration thus engendered doubts about US support for European integration. No matter what their views on transatlantic relations, all six governments shared these concerns.Footnote 8
Alongside this basic agreement, differences existed among the Six. The more liberal-oriented Federal Republic of Germany and the Benelux countries favoured a 50% reduction of duties. In particular, Bonn saw the reduction of the CET as a bargaining chip to reduce the duties of third countries and increase West German exports outside the EEC. In contrast, the more protectionist France and Italy adopted a more cautious position. They were in the process of opening their economies to their EEC partners and adjusting to competition from them, while also profiting from preferential access to the German market. They thus favoured more moderate reductions of the CET.Footnote 9 In order to negotiate as a trading unit, the EEC needed a common policy on agriculture but here too the preferences of the Six diverged. The French pursued the issue of agriculture in Geneva in order to exert pressure on the Germans to hasten implementation of the CAP: the Germans had been opposing significant aspects of this policy as it was being developed.Footnote 10 In order to negotiate as a trading unit, the EEC needed a common policy. This meant that the CAP, which was due to be established only at the end of the EEC transitional period in 1970, had to be approved in advance of negotiations at the GATT talks. Moreover, France had joined the Community in the hope of obtaining preferential advantages for its agricultural products, and so it sought to exclude competitive imports from third countries. France thus accepted the invitation to the Kennedy Round on condition that this fundamental aim was not endangered. By contrast, the Federal Republic of Germany, Italy and the Benelux countries hoped to continue importing cheaper foodstuffs from outside the EEC and saw the new round as an opportunity for reaching a settlement that could guarantee these imports.Footnote 11
It was against this background of divergent stances that the Commission prepared to attend the trade talks. The Treaty of Rome allotted the Commission the task of preparing proposals to be presented to the Council of Ministers, which would then adopt a mandate or directives on the basis of which the Commission would negotiate at the GATT talks. The Commission was to be assisted by the 111 Committee, consisting of senior national civil servants. For the transitional period, the Treaty assigned the Commission the exclusive right to negotiate on tariffs, but it did not assign it the same rights over non-tariff barriers (NTBs). This meant that for sectors regulated by the latter, such as textiles and agriculture, the Commission lacked authority. Moreover, the Treaty did not outline in detail the exact procedure to be followed in Geneva and did not specify whether only the Commission would sit at the negotiating table and enjoy speaking rights.Footnote 12
The President of the Commission, Walter Hallstein, and the two Commissioners involved in the GATT negotiations – Jean Rey and the Dutchman, Sicco Mansholt, responsible for agriculture – were aware that the new round would test their institution's dual capacity to generate proposals to reach a common stance in Brussels and to play the role of negotiating agent in Geneva. They therefore set out to demonstrate the Commission's prowess in international diplomacy. Their aims, however, went beyond this. Firstly, they saw the GATT talks as an opportunity for their institution to affirm its role as the sole negotiating agent on behalf of the EEC. In the previous, and first, GATT round that the EEC had attended, the Dillon Round (1961–1962), member states had joined in the negotiations alongside third countries and enjoyed speaking rights. They had curtailed the Commission's room for manœuvre by imposing strict negotiating directives and close supervision.Footnote 13 In the new round, the Commission had every intention of eliminating the presence of national governments and thus affirming its role as sole negotiator both for the industrial sector, for which it had legal competence, and the agricultural sector, for which it did not.Footnote 14
Moreover, the Commission did not see its role as limited to that of an honest broker in Brussels or as a bearer of messages from the Council of Ministers in Geneva. It had its preferences – which in some cases differed from those of the member states – and was intent on structuring its proposals in such a way so as to enhance them. In the industrial sector, it sought to use the new GATT negotiations to sway member states to implement a Common Commercial Policy (CCP) that also covered NTBs and was based on a common industrial policy.Footnote 15 This was rather remarkable considering that such an aim was not shared by any of the member states. As for the agricultural sector, Mansholt saw the round as a lever with which he could push the recalcitrant West Germans into adopting the CAP, much as the French also thought. Most crucially, the Commissioner saw the Geneva talks as an opportunity to harmonise the domestic agricultural policies of the developed countries and moderate the protectionism of the CAP. Not all of the member states shared such priorities. Thus, the Commission saw the GATT talks as an opportunity to advance its cherished policy aims and enhance its role both within and outside the EEC. GATT was an avenue through which it attempted to gain more power.Footnote 16
A difficult debut for the Commission
Despite the Commission's determination, it could not easily play its desired role. In preparation for the GATT Ministerial meeting of May 1963, the EEC Council of Ministers adopted a preliminary position. For the industrial sector, it called not only for the reduction of duties but also for their harmonisation across the Atlantic in order to reduce the extremely high duties applied by the US. It agreed to deal with agriculture, but without specifying how. Moreover, the EEC would be represented by the President of the Council of Ministers as well as by Commissioners Rey, Mansholt and the Frenchman Robert Marjolin, responsible for economy and finance.Footnote 17
At the GATT ministerial meeting, the US trade representative Christian Herter and his deputy W. Michael Blumenthal rejected the calls for harmonisation and instead pledged to support only the across the board reduction (described as an equal linear cut) as the principle by which duties would be reduced. The French and the Commissioners wanted to maintain the original EEC stance, whereas the West Germany, Italy and the Benelux countries were in favour of altering it to meet US requirements. Rey and Marjolin stuck to their stance and did not attempt to reconcile the various agendas into a common position. The role of mediator was instead taken up by Ludwig Erhard, the West German minister for the economy, who suggested the compromise that the United States subsequently accepted. The across the board reduction was to be adopted as a working hypothesis and a GATT working group was to elaborate a formula by which duties would be harmonised. An agreement was therefore reached without the Commission's brokering. Moreover, Erhard suggested that a representative of each of the member states attend the final bargaining session with Herter, claiming that the presence of the member states could actually help to speed up the negotiations. The proposal was ultimately rejected due to the opposition of the French finance minister, Valéry Giscard d'Estaing, who did not want Erhard, whom he considered too susceptible to US influence, to participate in the bargaining.Footnote 18 Nonetheless, the very existence of this proposal revealed that the Commission's credibility as the principal negotiator was not established, in particular when its stance did not represent the middle ground between member-state positions or when it failed to mediate. Equally significant was the fact that its capacity to take on this role was challenged by those governments which otherwise supported the supranational aspects of the Treaty of Rome. The West Germans were traditionally seen as more supportive of supranationality than the French. The German move and the French reaction proved that national positions regarding the delegation of power to the Commission were not driven simply by ideological support for supranationalism. Rather, they reflected the need to promote national trade interests in specific circumstances.
The position of the Commission did not improve in the following months. West Germany delayed the development of the CAP, provoking a parallel French refusal to move ahead with the GATT talks.Footnote 19 Since 1962 in particular, Bonn had opposed the setting of unified grain prices (UGPs); within the EEC, the Germany had the highest price levels. It refused to set common prices to the level proposed by the Commission (halfway between the German and the much lower French levels) since, it maintained, this would reduce the incomes of German farmers.Footnote 20 As a result, the Council of Ministers refrained from providing the Commission with instructions to bargain at GATT. To control the negotiations, member states closely supervised the Commission's actions in Geneva and gave it very inflexible directives, with the result that bargaining proceeded very slowly. Against this background, the GATT talks were adjourned until 1964 in order to await the result of the EEC's internal discussions, scheduled for December 1963, by which time the mandate to the Commission to negotiate in the round would be approved, together with new decisions on the CAP.Footnote 21
Despite the difficulties in negotiating with the Commission, the US negotiators never attempted to undercut the institution's role by negotiating only with the member states. Washington held that the promotion of European integration necessitated enhancing the role of the supranational institution. The GATT talks were a promising arena in which the Commission could confirm itself as a negotiating agent. Thus, the Commission could count on the US.Footnote 22
While the Commission experienced difficulties in establishing its status in Geneva, it played a fundamental role in the adoption of the EEC mandate at the Council of Ministers on 23–4 December 1963. In the industrial sector, its plan to harmonise duties promptly received the support of the member states while Rey and Marjolin demonstrated their mastery of technicalities and smoothed over the diverging positions that existed in Brussels.Footnote 23 The Commission played an even greater role in the definition of the mandate for agriculture. Mansholt and his deputy, the Frenchman Jacques Rabot, structured the entire discussion by defining the relevant problems, goals and solutions in line with the Commission's preferences. Doing this determined the way governments thought about the issue and helped to shape the solutions they would consider. In this way, the Commission was able to influence the policy outcome in Brussels. Mansholt designed a plan that he hoped would reconcile the divergent preferences of the Six with the Commission's aim to regulate agriculture at the global level and limit the protectionism of the CAP. The plan, entitled montant de soutien (MDS, margin of support), consisted of identifying the level of protection received by each product and making it binding for three years at GATT.Footnote 24
Italy, France and the Benelux countries accepted the MDS plan more as a way of giving the EEC a negotiating position than because they were fully convinced of its feasibility. Moreover, the French, originally unenthusiastic about a plan that touched upon their domestic support regime, endorsed it because it required fixing the UGPs and, therefore, put pressure on the Germans. The view in Paris was that accepting this plan involved no risk, since Washington would never back a plan that questioned its own domestic support policies. The French thus exploited the Commission's preferences in order to achieve their own.Footnote 25 In contrast, Bonn initially opposed the plan on the grounds that it presupposed approval of the UGPs. The West German state secretary, Rolf Lahr, and Mansholt clashed while, in the background, the French left the task of convincing the Germans and enhancing French interests to the Commission.Footnote 26
The Commission was the source of key proposals and proved that it had the expertise necessary to engage in technical debate and structure negotiations. It was thus able to inscribe its preferences on the final outcome. National governments showed confidence in the Commission's technical skills and its capacity to elaborate compromises; yet, even more significantly, they demonstrated a readiness to exploit and manipulate its preferences in order to foster their own interests.
With the December 1963 mandate the EEC attended the GATT ministerial meeting of May 1964, at which the Kennedy Round was formally launched. For the industrial sector, the US and the EEC agreed to present exceptions lists – lists of products to be excepted from the general reduction of 50% – on 16 November 1964. In contrast, no agreement was reached on agriculture.Footnote 27 In the aftermath of the 1964 ministerial meeting, Herter attempted to give the agricultural talks a bold push by stating his refusal to present the exceptions list as scheduled, if progress was not made on agriculture.Footnote 28 The US move tying industry to agriculture influenced the Commission's negotiating tactics, showing how this institution's tribulations in playing its role were also tied to US decisions on the round. Given this link, Rey and Mansholt aimed to reach at least a framework agreement with Herter in order to avoid a deadlock. In informal discussions with Blumenthal, conducted without the presence of the 111 Committee, they proposed a reduction in the application of the MDS plan to the EEC, the US and the UK. The suggestion, not authorised by the Council of Ministers, went beyond the December 1963 mandate. The two commissioners loosely informed member states and shifted away from this mandate. They attempted to reach an agreement in Geneva and, only afterwards, present the results to the Council of Ministers in order to obtain retrospective approval. The aim was to confront the national governments with a fait accompli which would be politically impossible to undo. The Commission attempted to exploit its negotiating role to enhance its preferences and agenda.Footnote 29
Unfortunately for the Commission, the contents of the bargain over agriculture were leaked to the press by members of the US delegation in Geneva who had rejected an agreement on agriculture for domestic reasons.Footnote 30 Rey and Mansholt's behaviour infuriated Paris as it could interfere in its principal struggle with Bonn on grain prices. The French were of the view that any agreement on agriculture in Geneva required the previous approval on the UGPs in Brussels and they had in no way anticipated that Rey and Mansholt would try, at any cost, to reach a deal with the US. Until this point Paris and the Commission had seen eye-to-eye, with the result that the French trusted the Commission and had been its strongest supporter. But, on this critical question, the clash between the two resulted in a striking development. The influential French permanent representative, Jean-Marc Boegner, personally handed Hallstein a no-confidence note threatening to publicly disown the Commission. Faced with the threat of such a sanction, Rey suspended the talks with the Americans.Footnote 31
This episode reveals the limits of the Commission's potential for action. While it could try to influence the outcome of the negotiations by bargaining in Geneva and disposing of privileged information, it was equally the case that member states were able to block its actions when they disapproved of the course that it had set. Privileged information and negotiating authority did not automatically mean that the Commission was able to influence the outcome of the bargain.
In the end, the White House stopped attempting to link the agricultural and industrial sectors and instead presented its exceptions list.Footnote 32 This decision set off a chain of events that improved the atmosphere in both Geneva and Brussels. The EEC agreed on its exceptions list and, on 16 November 1964, tabled it in Geneva, as planned. Finally, in December 1964, the EEC approved the UGPs. This was the point at which bargaining for the industrial sector could begin.Footnote 33
Setting the EEC exceptions list for the industrial sector: The limits of the mediator
In preparation for the presentation of the exceptions lists scheduled for November 1964, the Commission started elaborating the proposals it would present to the member states. The Brussels Commission aimed to compile a list that was to go beyond the sum of the Six's requests as to what would represent the basis of an EEC commercial policy. Significantly, the tariff cuts were accompanied by suggestions to harmonise the NTBs that member states applied nationally in order to favour the establishment of a full CCP.Footnote 34
On receiving the Commission's proposals, the member states requested modifications. Italy, France and, to a lesser extent, Belgium called for more exceptions. West Germany and the Netherlands asked for fewer exceptions and only Luxembourg approved the list as it stood. The final elaboration of the list took place between 11 and 15 November 1964 at a night-and-day marathon session of the Council of Ministers, during which the member states double-checked the treatment of every single item.Footnote 35
The machinery, mechanical and transport equipment sectors provoked the toughest confrontation between France and Italy, on one side, and West Germany and the Netherlands on the other. Rey and Marjolin mediated, advancing package proposals in order to downplay differences. They held the middle ground and made a series of suggestions which proved successful. The Commission demonstrated the technical expertise necessary to structure and set the terms of the discussions and also effectively defined the problems and presented solutions.
However, the Commission did not always play the role of mediator. For aluminium, it suggested the reduction of the CET from 9% to 7% and the abolition of the tariff quotas applied by the member states that it deemed incompatible with the CCP. This proposal met with the resolute resistance of the French. For paper, the Commission proposed a moderate reduction of duties and the allowance of subsidies to EEC paper industries in order to ease the adaptation to increased competition. West Germany and the Netherlands opposed the subsidies and requested deeper tariff cuts. The Commission rigidly stuck to its stance concerning both sectors. It made no new suggestions and, equally, refrained from taking on the role of mediator to enhance the chances of an agreement. As a result, the compromise was framed by the German presidency of the Council of Ministers, which suggested maintaining the 9% duty on aluminium and negotiations in Geneva over tariff quotas and offered a moderate but unspecified reduction of duties in the paper sector. As for textiles, the Commission made proposals for completing the CCP by harmonising the national regulations on NTBs and implementing common industrial policy measures in order to accelerate the structural adaptation of EEC industries to global competition. The member states, however, were entirely unresponsive and, instead, focused their attention on tariffs and quantitative restrictions.
The approval of the exceptions list reveals the limits of the Commission's ability to determine the outcome in Brussels. Thanks to its technical expertise, the Commission was able to table compromises, play the role of broker and thus influence the final outcome, as happened in the case of the machinery, mechanical and transport equipment sectors. Even so, it was not a neutral mediator; on the contrary, many of the suggestions it made corresponded to its own preferences, as the cases of aluminium, paper and textiles illustrate. Here, the Commission maintained a rigid stance and the member states eventually reached an agreement thanks to the mediating role of the Presidency of the Council of Ministers. Neither the Commission's right of initiative nor its capacity to mediate and technical skills was crucial in bringing about final agreement. National governments did not provide advance proposals and mediate whenever the supranational actor was doing this. When this was not the case or when the Commission's suggestions did not suit them, then they would themselves mediate. Member states were aware of one another's preferences and were able to reach an agreement that sidelined the Commission. The Commission was able to implement its preferences – and therefore influence the final outcome in Brussels – only when its proposals appealed to the interests of the member states.
The Council of Ministers also approved the EEC working procedure for Geneva. One representative from each member state would attend the negotiations between the Commission and third countries, but without speaking rights. Moreover, this institution was given the right to set up informal meetings with third countries without the presence of national governments. The member states held that to strengthen their overall position, the EEC had to speak with one voice in the GATT talks and that in order to conclude the negotiations they needed to attain a greater degree of flexibility within the EEC negotiating method, which until this point had been cumbersome. They thus gave their negotiating agent more freedom to act. However, the Commission was not authorised to negotiate over the entire industrial sector. For textiles and trade with Japan, with whom member states regulated trade through quantitative restrictions on a national basis, the Six retained in their hands the authority to bargain. In contrast, they agreed to allow the Commission to negotiate the request for GATT membership made by Poland, whose trade with the EEC was also regulated through quantitative restrictions. While they accepted this request for geopolitical reasons, they had no intention of making trade concessions to Poland. In this case, since there was nothing to negotiate, the member states allowed the Commission to represent them. Once more trade interests, rather than an ideological stance on supranationality, shaped their stance.
From the Empty Chair Crisis to the setting of the mandate for the agricultural sector
With negotiations for the industrial sector under way, Herter and Blumenthal sought to give agriculture a bold push forward by pragmatically suggesting that each side submit their agricultural offers, that is to say products for which governments agreed to reduce protection. The EEC Council of Ministers also approached this issue pragmatically and agreed to US suggestions, despite the opposition of Mansholt who rejected the idea that MDS would not be viable as the general rule for the negotiations. As a result, 16 September 1965 was chosen as the date to present the offers.Footnote 36
Tensions within the EEC would again interfere with the Geneva talks in what would become known as the Empty Chair Crisis. At the end of June 1965, following a meeting of the Council of Ministers at which the Six had been unable to agree on financing for the CAP, France withdrew from the work of the Council and other EEC policy-making committees, including the 111 Committee.Footnote 37
Despite the French withdrawal, the Five remaining member states decided to continue with the Kennedy Round as best they could. They were of the view that although a new mandate was required submit agricultural offers, the Commission could still continue the discussions in the industrial sector. They therefore chose to go ahead with the industrial negotiations, but refrained from putting forward offers for discussion. Thus, the Commission was able to attend GATT meetings, without annoying the French by having a new mandate issued by the Five.Footnote 38 Indeed, at no stage did the French contest the right of the Commission to negotiate in Geneva. They were aware that meaningful talks would resume only once the internal EEC crisis was over and, given the fact that the Brussels institution was acting under the existing mandate, they judged it wise to avoid an unnecessary conflict with the Five.Footnote 39 Equally revealing of the French attitude is the fact that, on numerous occasions, the French delegation to the GATT talks suggested to the delegations of the Five in Geneva and the Commission that coordinating meetings be set up.Footnote 40 Although very much in line with the pragmatism that the French were showing towards other aspects of EEC operation during the crisis months, this French stance was remarkable if considered against the background of the intense attacks that were simultaneously being directed at the Commission by the French president, de Gaulle. This provides further evidence of the way in which trade interests dictated the stance of national governments.
The Commission received the US support throughout the crisis. As the State Department saw it, the GATT talks could be of key importance for this institution's survival. Thus it rejected the GATT director general's suggestion of speeding up the talks by replacing the Commission with the six member states, who would negotiate on an individual basis. The strengthening of European integration required the role of the Commission to be enhanced.Footnote 41
The Empty Chair Crisis was settled in January 1966 when the French retook their seat in the Council of Ministers. At this point, in order to continue bargaining in Geneva, the EEC needed to approve the mandate for agriculture. The agricultural bargaining centred above all on grains, a basic commodity the treatment of which also had implications for meat and dairy products. Washington wanted to negotiate an International Grain Agreement (IGA) based on export guarantees and a food aid programme.Footnote 42 With its proposals based on the MDS and no access guarantees, however, the EEC came under pressure from the large exporting countries – the United States, Canada and Australia – which requested specific engagements. Mansholt tried to forge a consensus, presenting proposals that could reconcile the different preferences of the member states, the Commission's agenda and the requests from the GATT exporters. Since he was of the view that without some form of access commitment, exporters in GATT would insist on quantitative guarantees, Mansholt suggested binding the EEC self-sufficiency rate (SSR) – the ratio of total production to total domestic consumption. This would make room for the maintenance of imports and would oblige member states to confront the costs of their domestic policies. Mansholt hoped to provide Washington with sufficient reassurance regarding the fate of US exports, while enhancing the Commission's own aims of limiting the excesses of the CAP and bringing stability to world markets.Footnote 43
The debate amongst the member states over the new proposals lasted until mid June 1966. Mansholt and his deputies Rabot and Pierre Malvé led the discussions and showed themselves perfectly adept at mastering the full range of doubts and reservations of the member states. Ultimately, the Council of Ministers accepted the Commission's suggestions. Yet, the specific commitment that it approved was very loose: the SSR was offered at a level higher than the existing one and the duration of the binding would be in the order of three years, with no guarantees after that period had lapsed. The commitment was so indirect and vague that, contrary to the Commission's hopes, it looked unlikely that the US would support it; this explains why the French endorsed it.Footnote 44 In this way, thanks to its technical expertise and ability to engineer a compromise, the Commission played its role as package-broker to perfection. Moreover, it was able to structure the entire debate and, consequently, influence the final outcome in Brussels. Yet, it was also the case that the Commission's preferences were exploited and manipulated by member states, in this case France, to enhance their own aims.
The final phase of the negotiations: Trading off efficiency and control
The Kennedy Round entered its final phase in January 1967. The EEC found itself under pressure from its trading partners, who considered its offers insufficient, both for industrial and agricultural products. They asked for additional reductions in trade barriers and threatened to reduce their own offers. However, the EEC also came under pressure as a result of its decision-making processes. The Commission showed up in the GATT talks with an inflexible mandate. Once a compromise had been reached in Brussels, after extensive negotiations that managed to balance the different interests, it was difficult to change this state of affairs by means of a new bargain in Geneva. Some member states – especially France – found this stultifying system useful, exploiting the rigidity in the EEC's policymaking to stretch out the bargaining process until trading partners were more willing to offer concessions. Thus, the Council of Ministers could afford to keep its negotiators in Geneva on a tight leash, leaving little room for autonomy and discretion. As a result, third countries adopted a tough stance with the Community in order to push it to modify its position.Footnote 45
The EEC discussed its stance for the final phase at the Councils of Ministers meetings of January 1967. The West German secretary of state, Fritz Neef, considered it essential to improve the offers in order to avoid a scaling down of their trading partners' concessions. In contrast, the other five members held that a balance existed and refused to make any unwarranted offers. The French foreign minister, Maurice Couve de Murville, also based his refusal on the incapacity of the EEC to keep its positions secret. His view was that if improved offers were prepared in advance, they would inevitably be leaked and the Community stance weakened. Neef suggested resolving the problem by giving larger and more flexible directives to the Commission, as opposed to precise instructions. Picking up on the German suggestion, Rey noted that the Commission did not require a mandate but only general guidance and greater room to manœuvre. The bargaining in Geneva could be speeded up and leaks would at least be limited. The member states approved Rey's suggestion, recognising that greater flexibility was required in this last phase, during which new concessions had to be exchanged to conclude the round. This led at last to their giving the Commission more room to manœuvre.Footnote 46
This decision represented a marked change from the situation at the beginning of the round. A trade-off took place between member states' control over the Commission on the one hand and the speed of the decision-making process on the other. In this final phase, when an agreement had to be reached in Geneva and with no linked issue pending in Brussels after the question of the CAP had been settled, the member states allowed the Commission a greater degree of flexibility. They increased its power because it was in their interests to do so. The Commission was instrumental to their national interest and the source of its power lay firmly in their hands.
This increased flexibility formed the backdrop to the Commission's preparations for the final phase, during which it would have to negotiate in Brussels with the member states to convince them to accept its proposals and then in Geneva with the GATT members. Rey set the negotiating strategy for this final phase. Whereas Blumenthal and the newly appointed US trade representative, William Roth, hoped to conclude the round rapidly, Rey adopted delaying tactics, prolonging the bargaining until the very last moment. In this way, the EEC might be able to obtain last-minute concessions from its partners in an effort to rescue the round from eventual deadlock. The Commission thus spent the period between January and March 1967 discussing the improvements the EEC and the other countries could make. It was only in April 1967, one month before the planned end of the GATT talks, that it presented the Council of Ministers with a list of new proposals.Footnote 47
The final weeks of negotiations were an informal bargaining process between the Commission's officials – under Rey's direction – and the representatives of the GATT partners. As such, the Commission had become the sole negotiating agent both for the industrial and the agricultural sector. The need to conduct the negotiations more rapidly meant that the member states were content to leave the bargaining to the Commission. At the same time, however, Rey was thus compelled repeatedly to shuttle back and forth to Brussels to receive the guidance of the Council of Ministers.Footnote 48
An indication of the improved flexibility the Commission had gained was demonstrated in the talks over non-grains agriculture and the mechanical sector. In order to prevent the bargaining from grinding to a halt, Rey took the responsibility – without consulting the 111 Committee – of making a number of new concessions of political importance to Washington. These actions show that the Commission was no longer merely an external messenger for the Council of Ministers. Its representatives were able to take a position in order to respond to developments in Geneva, going beyond the Council of Ministers' instructions. Even so, any major decision required the intervention of member states, as the grains case confirms. After fruitless bargaining on the SSR, Roth suggested confining the agreement to wheat prices and food aid. At this point, Rey had to return to Brussels to obtain fresh instructions from the Council of Ministers, since the American proposal was too radical to be accepted by the Commission as the basis of negotiations.Footnote 49
In Brussels, the member states did not complain about unauthorised concessions having been put forward but instead expressed confidence in Rey's judgment. However, in discussing the new proposals, the Ministers once again controlled every single duty of every single item. Mansholt bitterly showed the extent of his dissatisfaction on the issue of grains. His plan had been written off by both the US negotiators and the member states, who had failed to defend it credibly in Geneva and had instead exploited the Commission's positions to pursue their own individual preferences. Once again, the Commission had no independent means to impose its preferences on the outcome of the negotiations. A disappointed Mansholt could only ask for the discretion to bargain on the basis of 5 million tons of food aid. The Dutch and West Germans initially refused any programme higher than 3 million tons and were reluctant to show flexibility. By contrast, the French minister of agriculture, Edgar Faure, was even prepared to allow the Commission to negotiate without directives: a further illustration of the willingness of national governments to give discretion to the Commission when they aimed to reach an agreement and when its stance was similar to theirs. Ultimately, the Council of Ministers agreed to give the Commission the authority to offer up to 3–4 million tons of food aid in Geneva.Footnote 50
Both for non-grain agriculture and for the industrial sector, Rey and Mansholt presented new offers and sought to convince governments to approve them without changes. Rey did not want the Council of Ministers to discuss the EEC's new stance item-by-item, since this would put the Commission in a rigid negotiating position in Geneva. He sought to avoid a new debate, which might involve the Commission having to present overall proposals and then national governments asking to pull out. Rey hoped that they would provide guidance and trust the Commission to take their major concerns into account. However, only West Germany and Luxembourg were ready to accept the report while the other four governments objected. Worried, Rey warned that it was time for political decisions and that failure to make them simply put the round at risk. After final discussions, the member states openly expressed their full confidence in the Commission and approved the proposals as they stood. The Commission would negotiate the best solution possible, bearing in mind the orientation of the Council of Ministers. The awareness that concessions and flexibility were indispensable if the round was to be concluded as well as confidence in Rey's opinion and negotiating skills made it possible for the member states to accept the Commission's proposals.Footnote 51
The final stages of the negotiations in Geneva consisted of non-stop bartering from 12 to 16 May 1967, during which GATT director general, Eric Wyndham White, successfully put forward his package deal to hammer out an accord. The agreement on wheat included a food aid programme of 4.5 million tons, a figure higher than that which Rey and Mansholt had been authorised to accept in Brussels.Footnote 52 On non-grain agriculture, an eleventh-hour agreement was reached thanks to the fact that Rey decided to go further than the aspirations of the Council of Ministers. Since the 111 Committee had not authorised him, Rey was acting on his own initiative in order to smooth the way to a final settlement, showing considerable self-confidence in his ability to win the Council of Ministers' retrospective approval, which he eventually obtained. Finally, in the early morning of 16 May, a framework agreement was reached.Footnote 53
Conclusions
The Commission proved capable of passing the test posed by the Kennedy Round. In Brussels, it showed the necessary technical expertise and innovative thinking for generating the ideas needed to reach a compromise. It was able to structure and set the bargaining terms and to steer the negotiations forward. It used persuasion and the management of information to influence the perceptions of the member states and to convince them of its aims. Member states relied on its proposals and mediating role. In Geneva, the Commission affirmed its role as the sole EEC negotiating agent even in sectors for which it lacked legal authority. As such it was able to perform, and even go beyond, the role the Treaty of Rome had assigned to it. It is worth pointing out the fact that the Brussels institution was able to increase its autonomy for negotiating in the GATT talks in the aftermath of the Empty Chair Crisis, even though this crisis is often described as having weakened it.
Yet, these achievements need to be qualified. They should be considered in light of the fact that member states had a vested interest in reaching an agreement. They aimed to attend the GATT talks as a trading unit and then to conclude the negotiations in Geneva. Both goals provided them with a strong incentive to compromise and, consequently, facilitated the role of the Commission. Moreover, there were clear limits to its actions and capacity to determine the final outcome. In Brussels, the long meetings, during which governments questioned every single item, from bicycle headlights to canned asparagus, demonstrated that trade policy-making remained in the hands of member states. The Commission was able to make its preferences prevail only when these appealed to the Council of Ministers. The latter decided what policy outcome was acceptable and the supranational institution had no autonomy in setting the content of the mandate. Furthermore, when the Commission abandoned the role of mediator, member states were themselves capable of presenting proposals and providing mediation. The Commission's actions were limited by the constraints imposed by the preferences of the member states.
In Geneva, it was the Council of Ministers which outlined the scope and limits of the Commission's room for manœuvre while the latter's autonomy varied considerably over time depending on the phase the negotiations were at in both Brussels and Geneva. Whereas from 1963 to early 1967 the member states strictly controlled the Commission, in the final phase they increased the discretion allowed to their negotiating agent in order to hasten the EEC decision-making process. The representatives of the member states that attended the discussions in Geneva first silenced themselves and then they left the negotiating room. Once the member states decided that the round had to be concluded, they granted the Commission the flexibility required to negotiate the last phase, even if the Commissioners were compelled to shuttle back and forth to Brussels to receive instructions. Yet, the granting of concessions not authorised by the member states and the fact that the Commission had a degree of autonomy in terms of deciding its tactics and strategy show clearly that it was not simply acting as the messenger of the Council of Ministers. The member states pragmatically set limits to the actions of the Commission, guided by the principle of how they could enhance their trade interests. In the end, they allowed the Commission to strengthen its role because this was in line with their interests.
