European Economic Community

Definition

The European Economic Community (EEC) was an organization established in 1957 by the Treaty of Rome, aimed at integrating the economies of its member states and promoting economic cooperation among them. The EEC played a significant role in facilitating free trade and establishing a common market, which laid the groundwork for further European integration and the eventual creation of the European Union.

5 Must Know Facts For Your Next Test

1. The EEC was founded to create a common market that would eliminate trade barriers among member states, leading to increased economic cooperation and growth.
2. By 1973, the EEC expanded to include nine member states, with countries like Denmark, Ireland, and the United Kingdom joining the original six.
3. The EEC implemented a customs union that allowed for a standardized tariff system for non-member countries, further promoting intra-community trade.
4. One of the EEC's significant achievements was the establishment of common agricultural policies that aimed to stabilize prices and ensure food security within member states.
5. The EEC eventually evolved into the European Union in 1993 with the Maastricht Treaty, which introduced deeper political integration along with economic cooperation.

Review Questions

• How did the establishment of the European Economic Community influence trade relationships among European countries?
  • The establishment of the European Economic Community significantly influenced trade relationships by eliminating tariffs and other trade barriers among member countries. This integration facilitated free trade, allowing goods and services to move more freely across borders, which enhanced economic cooperation and interdependence. As countries collaborated economically through the EEC, it encouraged further negotiations and agreements outside its borders as well.
• Discuss the impact of the EEC's customs union on non-member countries during its early years.
  • The EEC's customs union had a notable impact on non-member countries by creating a standardized tariff system that affected how they engaged in trade with EEC members. Non-member nations faced higher tariffs when exporting to EEC countries compared to internal trade within the community. This situation often prompted non-member countries to seek bilateral agreements or consider joining the EEC to benefit from lower tariffs and improved access to a growing market.
• Evaluate how the transition from the European Economic Community to the European Union reflects broader trends in global economic integration.
  • The transition from the European Economic Community to the European Union reflects broader trends in global economic integration by showcasing a shift toward deeper political and economic collaboration among nations. This evolution illustrates how countries can move beyond mere economic partnerships to pursue comprehensive frameworks that encompass various facets such as environmental standards, labor rights, and cross-border regulations. The EU represents a model for regional integration that other parts of the world have sought to emulate, highlighting how interconnected economies can work together to address shared challenges while maintaining their sovereignty.

Related terms

Treaty of Rome: The agreement that established the European Economic Community in 1957, signed by six founding countries: Belgium, France, Germany, Italy, Luxembourg, and the Netherlands.

Common Market: A type of trade bloc that allows for the free movement of goods, services, capital, and labor among its member states, which was one of the main goals of the EEC.

European Union: An economic and political union of member states that was created after the EEC and encompasses broader aspects of integration beyond just economic cooperation.