State Trading Monopolies in the European Economic Community

Governments have long recognized state trading monopolies as convenient devices to achieve political and commercial objectives concurrently, using the leverage of their economic power to political ends and vice versa. The effectiveness of the Boston Tea Party, and its aftermath, in adjusting state trading monopolies to the requirements of free trade settled the problem for the United States only. Thus, when the parties to the Treaty of Rome' agreed to divest themselves of their control over intra-Community trade by the establishment of a customs union, they were faced with the problems posed by their trading monopolies as well. The state trading monopolies are business enterprises.

As such they are expected to take advantage of the abolition of trade barriers and to enter new markets. For their competitors, however, there remains but one entry to the monopoly's own market, that being through the monopoly itself. In thus channeling export and import trade, the monopoly is in a position to exercise both that freedom of trade the treaty guarantees and that national control of intra-Community trade the treaty proscribes.