EEC membership means disaster for Spanish workers since France is no longer opposing the
But the process of integrating Spain into the EEC can only be concluded by an agreement to which the conditions posed by the EEC seem a formid-
What is proposed is to sign the agreement next September 30, so that integra-
The positions of the EEC and the Spanish state on the latter's membership in the Common Market are quite different.
question in the context of the grave internal tensions it is experiencing, serious imbalances in the productive sectors, the pressure of unemployment today and the immediate disadvantages that Spanish membership will entail for some countries.
Thus, for the EEC bringing the Spanish state into the Common Market aside from all political considerations, will create upsets and problems of no secondary importance. However, headed by Felipe Gonzalez, integration into the EEC is an essential point in its historic program, and it is prepared to stick to it at any price.
Jesus ALBARRACIN and Pedro MONTES
Given these two contradictory positions, the most likely perspective is that the integration of the Spanish state into
The EEC looks at this , for the PSOE government in Madrid
This has gone so far that in 1983, for the first time in history, the Spanish state had a favorable trade balance with the EEC. (See Tables I and II.)
tion into the EEC can begin on January
However, these dates are out of line with the scope and diversity of problems that have to be dealt with. They are unrealistic moreover in view of the attitudes and tensions existing in the EEC. Therefore, it seems unlikely that the integration of the Spanish state into the EEC will proceed at the tempo these dates
In any case, the change in the attitude of the EEC and of France is marked, and this raises the question reasons prompted this turnabout. With-
THE FOREIGN TRADE OF THE SPANISH STATE the EEC will involve a long and tortuous process of discussion, fraught with tensions and filled with pitfalls. In all likelihood, Spanish capitalism will have to offer very costly deals and quid pro
With the exception of the far left, all the political and social forces in the Spanish state support integration into the EEC. The historic isolation and economic backwardness of Spanish capitalism, as well as the memory of the time when the Common Market was closed to the Franco dictatorship, provide motivations for the "pro-European"
The result is that no political or social force wants to appear opposed
However, as soon as it becomes clear in the negotiations what costs this involves, what sectors will be hit, what compromises are necessary and what risks have to be run, profound social disaccords will arise, as well as resistance to joining the EEC. It can be said that the opinion in nongovernmental circles favorable to entry into the Common Market is "membership, yes, but not at any price."
There are reasons for this position. On the one hand, people know about the stiff conditions for joining the Common
On the other hand, Spanish structure to face European competition. Finally, it has to be taken into considerathe present framework of Spanish state has proved rather favorable
In fact, the trade agreement signed in 1970 has permitted a considerable expansion of Spanish exports to the EEC, in particular in the industrial sphere.
This accord involved a very substantial lowering of the EEC tariff barriers (55% on the average), while the Spanish state maintained very strong protectionist measures both in the form of tariffs and import quotas. (Spanish tariffs were reduced on the average by 26%, but from a much higher level.)
Today, the EEC takes almost 50% of Spanish exports. For consumer goods, the figure rises to 63%. Some 61% of exported goes to the EEC, and 54% of agricultural products.
Imports from the BEC amount to a third of Spanish exports in general and two thiads in the case of producers goods.
in industrial favorable to the EEC, but the picture of Spain as fundamentally an exporter of agricultural products to the BEC is not confirmed by the facts, even if the EEC their value by sophisticated
Agricultural products - mainly fruit, vegetables - represent no more than a fifth of Spanish exports to the
On the other hand, raw materials industrial products (mainly automobiles, shoes, automobile spare parts, tires and organic chemical products) ac-
WITH THE EEC -0.0 out entering into deeper and more complex speculations, it has to be admitted that if the EEC is better disposed today to Spanish membership, this shift has to be seen in connection with the pressures brought to bear by the PSOE government, which is trying to sell Spain's staying in Nato at the highest possible price, by linking this question to full integration
Even though all aspects of the negotiations are the subject of polemics and the problem of agriculture for good reasons stands out as one of the knottiest, since the EEC is burdened by agricultural surpluses, which are a serious drain on the Community's budget. And Spanish agriculture is very strong and highly competitive. This creates tensions that have concrete effects most specifically on French farmers. Spanish membership in the EEC would increase the Community's arable land by 30%, the number of agricultural workers by 25%, and the number of farms by 31%, while it would increase the number of consumers by only 14%. Moreover, Spanish conmarkedly lower than the European average.
The EEC's proposal, in its general lines. calls for dividing Spanish production into
On the one hand. there is fruit and vegetables, which hold
International Viewpoint 23 April 1984
THE FOREIGN TRADE OF THE SPANISH STATE IN 1983
(in billions of dollars)
an important place in Spanish exports to the EEC, and which are highly competitive. In this case, integration into the EEC is to be in two stages. In the first, which is to last four years, these products are to be left out of the deal. Trade in them will be in accordance with thirdcountry agreements. In a second phase lasting six years, they will be slowly brought into the Common Market framework, subject to reservations with respect to prices and the level of production. The second category includes all other products (with a few exceptions). These will be brought within the Common Market framework in accordance with a "classical" pattern of transition. This would involve lowering tariffs to make them equal on both sides, but there would continue to be a constant watch
The subsidies for various products, which are too numerous in Spanish agriculture, would be adjusted to eliminate any inequality that could introduce distortions into the market. Moreover, for specific products, such as wine and vegetable oils, when Spanish integration into the Common Market would swell the Community's surpluses to excessive levels, concrete agreements will be necessary. Such agreements will be aimed mainly at securing drastic reductions in Spain's productive capacity.
This proposal has been assessed very negatively by Felipe Gonzalez's governthe PSOE, as well as by the other political parties and economic secfore is to reject the preliminary phases or stages projected for fruit and vegetables, and to conclude an agreement that sets in motion a general process of slow integration into the Common Market, while leaving open room for discussing safeguards and precautions. moreover, refusing to let the full burden of readjustments in European wine production be placed on the Spanish proFishing war
Fishing is also an area where the problems are very acute. The Spanish fishing fleet amounts to about 70% of the Community's total fishing fleet. accord would inevitably involve paralyzing or destroying a substantial part of the Spanish fleet. The EEC wants, in fact, to prolong the present system of licences until 1992, and it envisages no further increases in the quotas for catch imposed
On the other hand, the EEC is demanding that the Spanish state abrogate the bipartite agreements it has made with other countries, which cover almost 25% of the Spanish fishing industry.
Spanish industry is used to a high level of tariff protection and is less competitive than that of the EEC. It will suffer from the effects of the customs union represented by the Common Market. In this regard, the negotiations have so far produced the following results: International Viewpoint 23 April 1984
Total %
Amount
Total
29.1
100
Agricultural
3.8
13
Products
40
Energy
11.6
Raw Materials
6.8 and Semimanu-
23 factures
Consumer Goods
1.7
6
Producers Goods
5.1
18
% of GNP
18.4
Total
19.9
100
Agricultural
3.3
17
Products
Energy
1.8
9
Raw Materials and Semimanu-
7.5
38 factures
Consumer Goods
3.8
19
Producers Goods
3.5
17
% of GNP
12.5 a) Elimination of tariffs
There is an agreement on eliminating tariffs between the Spanish state and the
EEC over a transitional period. But there is no agreement on the length of this period, nor on the speed at which tariffs countries» common tariff against "third
Since January 1981, the Spanish state has observed rules laid down for tariffs by the EEC, and an accord already
, EUROPE
CONSE
+
+
VROPE
+
COUNCIL O
+ 4→
Prime Minister Felipe Gonzalez (DR)
IMPORTS
EEC EEC% of total Amount % 9.4 100 32 0.8 8 20 10.9 9 8 3.6 38 53 0.9 50 3.3 35 64 5.9 EXPORTS
9.6 100 48 1.8 19 54 1.1 11 61 2.9 30 38 2.4 25 63 1.4 15 42 6.0 exists for adopting the EEC tariffs. This agreement will go into force in conjunction with the dismantling of the Spanish tariff system in force for commodities subject to tariffs more than 15% above those of the EEC and, from the time Spain is admitted to the Common Market, for commodities on which the duties are below this ceiling.
c) Trade quotas
There is an agreement on eliminating quotas for imports from the EEC, as well as on establishing a transitional period for quotas on exports of ten products (certain kinds of color TVs, tractors and seven textile products).
In addition to all these trade mechanisms, Spanish industry can also be affected by the elimination of subsidies, the adoption of the Value Added Tax, and the freedom that will be extended to industrial concerns in other EEC tries to set up plants on Spanish territory.
Integration into the EEC can, however, offer certain advantages for Spanish industry. One such that should be noted is increasing trade with countries belonging to the European Free Trade Association (EFTA) and the Mediterranean countries that today have agreements with the BEC. Spain could benefit because in general it would face lower tariff barriers in these countries than it does today.
Other possible advantages that may be envisaged are the following: the lowering of costs for raw materials (which will result from the fact that the EEC tariffs are lower than the existing Spanish ones), and the opening up of European markets for the multinationals established on Spanish territory (such as General Motors,
11
Ford, etc.) and for advanced technology
But in general, integration presents serious difficulties structure such as that in the Spanish state, which is not very competitive.
From the standpoint of foreign trade, integration into the Common Market will some important repercussions. will boost imports from the EEC coun
(the 1970 accord is better Spanish industry than the integration that is to come and from third countries. This will result from the lowering of tariffs and the ensuing liberalization of trade, as well as from the trade agreements signed by the EEC, which will then have consequences for Spanish industry. areas of Latin America may be negatively affected, since the tariffs applied to the Common Market are higher than those accorded the Spanish state. And the existing trade accords with Spain will not be continued after it is integrated decline in Spanish foreign trade, thereby putting pressure on the balance of payments and giving rise to new pressures for devaluing the peseta. Industry threatened
Thus, exposed to foreign competition, Spanish industry will suffer more than it will gain from the customs union with the
What is more, competition on the Spanish internal market is also going to sharpen because European products will enter without the handicap of tariffs. Spanish industry will no longer be able to count on the enormous subsidies that it enjoys today, and so forth. Finally, the elimination of trade barriers will facilitate the integration of European production processes in Spanish industry, in the sense that each stage of production will be done in the country where the costs are lowest. This could have particularly grave consequnces for some branches of Spanish industry. What change for Spanish workers? (DR)
The sectors in reconversion pose still other problems with respect to integration into the Common Market. In steel, the Spanish state specialized particularly in the production of steel for export. In fact, while internal demand has been declining, exports have grown, going from a million tons in 1974 (9% of domestic steel production) to 6 million tons in
(45% of domestic production). Given the import quotas currently set by the EEC, more than 80% of these exports go to markets outside the Commun-
This could change drastically after Spain joins the EEC. It is obvious how much of an interest the EEC has in the restructuration of the Spanish steel industry, to see that its existing produc-
In the case of the textile industry, there are less problems. • But the Spanish textile industry will gain no substantial advantages. Both Portugal and the Spanish state are major exporters of textile
But Portugal is more of a threat to the EEC, because Spain's efforts to specialize in high-quality products limit the possibilities for massive regards shipbuilding, while the industry in the BEC drastically needs renovation, the Spanish industry is relatively modern. It has no need to cut capacity in order to adjust to decreased
Spanish membership in the Common Market will swell the EEC's shipbuilding capacity by 25%. This will also have negative repercussions on the Spanish industry, because 90% of the parts suppliers are small Spanish firms. This contrasts with the Greek and Porindustries, which to import these products. integration, the Spanish state will have to lower its protective tariff barriers and as a result it risks seeing the disappearance of this sub-contracting industry.
this picture, it is not surprising that the employers have taken the position expressed by the chairman of their association, Ferrer Salat, that is, "Yes to the EEC, but not at any price." A document drawn up in 1981, and still in force, sums up the views of the employers on integration.
On the dismantling of Spanish tariff barriers, the bosses demand a transtiona period of "no less than ten years," in which the process is to proceed at an even rate in order to avoid pitfalls in the negotiations. And they want a "security clause" to apply to imports of any pro ducts from the EEC that start to grow too rapidly. As for quotas, the bosses want a procedure similar to that applied to tariffs, but after a transitional period.
Regarding the more important aspects of the other problems, the positions of the employers are as follows: freedom of movement of labor and capital to Spain following membership, a reasonable waiting period for setting up plants, deregulation of the Spanish labor market, delay in imposing the VAT, and introduc tion of the latter in conjunction with a cut in employers' contribution to social security, and so forth. Grim future for workers
As is obvious, this amounts to a body of demands clearly designed to assure better protection of Spanish industry during a transitional period. But it alsc represents an attempt to take advantage of Common Market entry to gain certain historic demands of the bosses, such as an easing of regulations governing the labor market and reduction of employers' contributions to social security.
As is indicated by what we have just integration into the BEC will profoundly shake up the productive structures of Spanish capitalism. agriculture, it should lead to cutting pro duction, eliminating surpluses, and at the same time to a process of capitalization that runs directly counter to the agrarian reform demanded by the rural workers, who still make up a considerable proportion of the economically active population. of industry, the basic sectors will have to vierte en lo tuyo
Porer camb
153
12
PSOE
And, in general, it will be necessary to undertake a process of ad. nologies in order to meet EEC competi-
Leaving aside the question of how harshly and rapidly these transformations are carried out under the pressure of the EEC's imperatives, they coincide with the economic program of Felipe Gonzalez's government, which calls for "modernizing the economic system and putting it in order." Since taking office, this government has turned its back on the PSOE's timid election promises and imposed a very severe austerity policy. At the same time, it has set in motion a program of industrial reconversion aimed fundamentally at cutting productive capacity and increasing the productivity and profita-
International Viewpoint 23 April 1984