Cooking the Books: Zollverein

During the 19th century, even before Germany became a single state in 1871 and was still divided into kingdoms and duchies large and small, there was nevertheless a considerable degree of economic unity. This was achieved through the ‘Zollverein’, under which the states and statelets who joined committed themselves to two things – a common market, or customs-free trade with other member-states, and imposing the same tariff on imports from outside the union.

Zollverein was translated into English as ‘customs union’. When in 1957 six European states – Germany, France, Italy, the Netherlands, Belgium and Luxemburg – established what they called the ‘European Economic Community’ it was popularly known as the ‘Common Market’ after the free trade area established behind the common external tariff. The common external tariff had another consequence. It meant that the EEC was a single trading bloc vis-à-vis other states and trading blocs. In 1973 the UK, Ireland and Denmark joined this common market/ customs union and trading bloc.

Some of the EEC member-states envisaged going further, seeing the common market as a step towards economic and monetary, and eventually, political union. This aim was formalised in 1993 when, under the Treaty of Maastricht, the EEC changed its name to ‘European Union’. This also introduced the aim of removing non-tariff barriers to trade within the area such as differing safety, environmental and technical requirements by establishing common standards and regulations and so a frictionless market called ‘the Single Market’ (as a step beyond a merely tariff free ‘common market’).

In the referendum in Britain in June 2016 a 52-48 majority voted ‘leave’ in answer to the question ‘Should the United Kingdom remain a member of the European Union or leave the European Union?’ But it wasn’t clear what this meant in practical terms. Did it mean simply leaving the EU and its political institutions but still staying in the customs union (the minimalist interpretation, which would put Britain in the same sort of position as Norway) or leaving the customs union too (the maximalist interpretation)?

Ever since, both the capitalist class and its political representatives have been divided on the issue, with a sizeable majority of actual capitalists in favour of staying in the customs union (they never wanted to leave anyway). Their political representatives are more evenly divided, with ironically the Labour Party being closer to the majority capitalist position than the Tories.

The government itself wants to leave the customs union so that Britain can negotiate trade deals on its own. They believe that they will be able to negotiate better deals for the capitalist class than as part of the EU trading bloc. This remains to be seen as one of the original capitalist reasons for being in the EEC was precisely the calculation that a big trading bloc would have more clout in trade negotiations than going it alone. The first test will be what sort of deal an independent UK will be able to negotiate with a big trading bloc like the 27 remaining EU member-states will still be.

As socialists, who have no concern with what is in the best interest of the capitalist class, we can sit back and watch the show.

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