This chapter partially draws on my article entitled âNehru and the European Economic Communityâ, published in India Quarterly: A Journal of International Affairs, 2015, 71(1), pp. 1â15 and is used with the permission of the copyright holders (Indian Council of World Affairs [ICWA]) and the publishers, SAGE Publications India Pvt. Ltd., New Delhi.
End AbstractIndiaâs interest in European integration was as old as the first beginnings of the movement towards an economically and politically united Europe. The European integration movement was perceived as âthe quickest meansâ and an attempt by countries with different languages and histories to forge âa common programme for collective and rapid prosperityâ (Mishra 1973). European integration coincided with the âsame experiment and experienceâ which began in India in the 1950s when successive plans for socio-economic development were launched and implemented (Lall et al. 1984: ix). The Common Market was viewed as âa politically motivated initiativeâ whose âultimate objective was political conciliation and reconciliation and a cooperative political modus vivendiâ (Swaminathan 1973: 29â30).
This chapter examines the evolution of Indian perceptions towards European integration and the European Economic Community (EEC) from the 1940s till negotiations of British entry into the Community collapsed in January 1963. It examines Indian perceptions to the European Coal and Steel Community (ECSC), the European Defence Community and the European Free Trade Area (EFTA). It examines Indian reactions to the Treaty of Rome (1957) and role when it was under consideration in the General Agreement on Tariffs and Trade (GATT). It discusses New Delhiâs first direct contacts with the European Commission in an effort to establish diplomatic relations. The chapter also looks at the keen interest of the business groups, especially the Federation of Indian Chambers of Commerce and Industry (FICCI), in the EEC. It goes on to discuss Indian strategies in dealing with the implications of Britainâs first application to join the European Community (1961) and the reactions of the business community, political parties and debates in the Indian Parliament on the EEC. It evaluates the key elements which influenced Indian thinking and evaluates Indian attempts to secure a viable trade arrangement with the Community during the Nehru era.
India, Regionalism and Regional Organizations
Since the mid-1940s, Indian elites had been expressing their views on regionalism and regional groupings in India Quarterly âthe premier international affairs quarterly of the Indian Council of World Affairsâthe leading think tank of the time established in 1943. As early as 1946, K.M. Panikkarâa journalist and later Ambassador to Franceâregarded the idea of regional organizations as ârespectableâ and âattractiveâ since states in the same geographical region had common problems, have similar interests and are naturally more concerned with each otherâs affairs than those far away (Panikkar 1946: 120). Their role, however, tended to be limited by the United Nations Charter and the veto power of members of the Security Council. Regional organizations dealing with security, he felt, would become âmerely another instrument for the effective assertion of the supremacy of the Great Powersâ. They would not only be unable to âenforce sanctions against a Great Power, but may even be used to uphold and consolidate the influence and authority of Great Powersâ (Panikkar 1946: 122). He was sceptical whether an organization, which was dominated by the problems of European nations, would find time for initiating âa policy of sustained actionâ in outlying regions (Panikkar 1946: 125).
In the early years of independence, the movement for European unification was viewed by Prime Minister Jawaharlal Nehru as a natural response to problems peculiar to Europe and to its âlegacy of conflictâ (Nehru, 8 March 1949a: 31â32), but tainted by colonialism. A year earlier, he felt that the idea of âa unionâ in Western Europe had developed far (Nehru, 17 March 1948: 330) and that the Council of Europe was âslowly groping its way towards some kind of European confederationâ (Nehru, 2 September 1949b: 188).
In 1949, Girija Mookerjee traced the genesis of European integration since the days of the Roman Empire and Charlemagne. The âmain inspirationâ for a European Union, he argued, had not come so much from âa desire for cultural unity or political settlementâ as from âa determination to ensure the pre-war positionâ of West European nations (Mookerjee 1949: 239). He maintained that âon paper at least, a European Union has been formed although not with so much conviction that it will finally lead to the creation of a United States of Europe on the pattern of the U.S.A., which seems to have been the ideal set by most of the Europeanistsâ. Amongst the obstacles for a workable European Union included the reluctance of many European peoples to embrace âthe idea of Europe as a geographical unityâ. A âviableâ European Union, he felt, ought to be based on a Franco-German reconciliation, but such a prospect was âvery distant indeed!â (Mookerjee 1949: 241). Moreover, the idea of a European Union was âvery much discountedâ in France. Another obstacle was the âcomplicated structureâ of the Commonwealth, which made it difficult for Britain âto identify herself completely with the countries on the Continentâ. Without British participation, a European Union âcan never have either the prestige or the reality which it needsâ (Mookerjee 1949: 242â243). In conclusion, he felt that the prospects of a European Union were âvery remoteâ and that the movement for European integration was âsolely directed against the Soviet Unionâ. He was sceptical that even if a Western Union is somehow brought into being, it will have popular support (Mookerjee 1949: 243).
Even though the Asian Relations Organization, set up by the Asian Relations Conference (New Delhi, 23 Marchâ2 April 1947), continued its unreal existence, it was subsequently quietly buried. H. Venkatasubbiah, correspondent of The Hindu and a member of the Staff of the Asian Relations Conference, wrote a two-part article in India Quarterly . The first one examined the âvarious problemsâ which might arise in the formation of an Asian union as a permanent regional organization by drawing lessons from the Organization of American States (OAS) (established in 1948; Venkatasubbiah 1949a). The second article probed the various problems in the formation of an Asian Union, including the basic difficulty in defining the region itself. The idea of establishing more than one regional organization in Asia emanated from the Delhi Conference on Indonesia (January 1949).1 He felt that the organization structure of the OAS was âfar too elaborate a modelâ for the structure of a permanent Asian organization. However, he maintained:
A permanent organisation is well suited to pool existing economic resources in the region and arrange for the supplementary foreign aidâas in the case of the European recovery programâon agreed principles. The fear that extra continent and political influence will follow economic aid could be largely a lady of development with foreign capital proceeded and organisational rather than bilateral auspices. (Venkatasubbiah 1949b: 217)
In 1951, another article in India Quarterly regarded the establishment of the Economic Commission for Asia and the Far East (ECAFE) by the United Nations in 1947 as having at least achieved âa singularly valuable purposeâ of getting together Governments of Asia and the Far East on a common forum to discuss and consider the common problems with a view to finding solutions (Lokanathan 1951: 7).
European Coal and Steel Community
The establishment of the European Coal and Steel Community (ECSC) in 1952 was perceived by the Times of India as an âunprecedented waiverâ and given a release from the obligations under the GATT. In fact, it was exactly the opposite of GATT principles of non-discrimination. In effect, it had set up a special preferential trade area for the Six to trade in coal, iron ore and iron scrap completely free of duties or other import restrictions (TOI, 9 November 1952b). The decision of the ECSC members to proceed towards the establishment of a European Federal Political Committee, the Times of India editorially observed, was âguilty of either over-ambition or of being lip service to an ideal impossible of achievement in the foreseeable futureâ. The surrender of national sovereignty, it opined, could âwell prove unpopular among the people of Western Europeâ. The âidealisticâ Schuman Plan was termed as nothing more than âa French attempt to deny Germany the economic independence which would have provided France with severe competitionâ (TOI, 20 September 1952a). India perceived in the ECSC âa real potential for the gradual replacement of confrontation with conciliation and cooperationâ (Swaminathan 1973: 30).
European Defence Community
India had been, generally speaking, critical of regional alliances primarily because they tended to enhance international tension and war. Its attitude was basically conditioned by geographical continuity. It apparently regarded the Brussels Treaty (1948)âthe founding treaty of the Western European Union (WEU)âto be a legitimate measure of self-defence. It did not express any resentment or opposition to the British decision to join the Brussels Treaty.
Similarly, when asked to comment on the treaty seeking to establish the European Defence Community (EDC) (27 May 1952), Nehru remarked: âWe do not wish to get entangled in European problems or in problems apart from those directly affecting usâ (Ministry of External Affairs 1954: 7). He was sceptical of the success of the project. The conception of âa European Defence Force remains a conceptionâ and there was âvery little chanceâ of France agreeing to it (Nehru, 23 June 1954a). After the EDC was not ratified by the French Parliament, it had suffered âa severe shockâ (Nehru, 3 September 1954b: 594).
European Free Trade Area
Shortly before the signing of the Treaty of Rome, Britain proposed an industrial free trade area (including the EEC as one of its members) within the Organization for European Economic Cooperation (OEEC). This proposal envisaged the removal of tariff and quota restrictions on industrial goods, but excluded agriculture and left to the individual members the discretion to adopt their independent trade and commerce policies towards non-member states. An economist argued that a large group of Indian exports, except cotton textiles, were likely to remain unaffected by the formation of EFTA (Ray 1961: 34...