Volume VIII – Number 2
Bela Balassa
Abstract: The entry of the United Kingdom, Denmark, and Ireland into the European Common Market holds financial implications for the United States. The three main issues to be addressed are: the impact on the US balance of payments, implications for American trade and international monetary policy, and the effects on the position of the United States in the world economy. First, while the US may face a slight devaluation of the dollar, this decline will be off-set and negligible. Secondly, the expanded Common Market will have a negative impact on US trade and international monetary policy; however, this can be overcome through multilateral trade liberalization. Finally, the US must acknowledge the Common Market as an equal in the world economy. Atlantic unity and economic competition will advance both the American and European markets, while unilateral measures will be adverse for all.
Key Terms: European Common Market, balance of payments, international monetary policy, European Economic Community, United States
