THE NEXT COLLISION between Britain and its Common Market partners has now been postponed for a few weeks while the Germans try again to mediate. Germany's Chancellor Helmut Schmidt arrived in England yesterday. The issue is Europe's highly peculiar agricultural subsidy system. But the issue is also the distribution of political power within a community of nine nations.
The British say -- correctly -- that the agricultural system's complex rules are suddenly producing wildly unjust and irrational effects. One of those effects is to send Britain's required contribution shooting upward to a lever far higher than any other member's. The French response has been to say, in effect, tough luck -- the British knew how the rules worked when they joined. Britain's prime minister, Margaret Thatcher, asserts stonily that Britain has no intention of leaving the Common Market, although she has threatened to hold up, illegally, payment of the agricultural money. Among other Britons, it's apparent that the usefulness of staying in the Common Market is, once again, at the least an open question.
To the French, this quarrel over the farm subsidies only confirms their view that the British are basically different from the rest of Europe. Other European countries have a long tradition of protecting farm prices and passing the cost on to consumers. But until they joined the Market, the British were free traders, buying at world prices. The European price of beef is almost twice the world level; the European prices of several other commodities, including butter and cheese, are more than twice the world level. The cost to British consumers of this transition to European pricing is currently about $110 per person annually.
To the French, it's a matter of British willingness to accept established continental ways. To the British, it is a dismaying example of intransigence in defense of economic perversity -- for it is the rich countries, under this system, that are exploiting some of the poorest. Of the three poor countries in the Common Market, only Ireland is a winner from the agricultural subsidies. Italy, like Britain, is a heavy loser. Other big gainers are Denmark and Holland, both of which are decidedly not poor. France evidently comes out about even. It should be noted that, like any protectionist scheme, this one runs at a heavy net loss. The subsidies paid to farmers are small compared with the costs to Europe's consumers and taxpayers.
This eccentric imbalance might be more tolerable if the Common Market's other funds -- for purposes like regional development and scientific research -- provided significant offsetting benefits. But they have never amounted to much. In fiscal terms, the Common Market is the farm subsidies and not much else. One view of the Market's future holds that it has gone about as far as it can. It has provided wide industrial markets, unrestricted travel and high farm prices -- which, according to the stand-patters, is all Europe really wants. Alternatively, you could argue that the next stage of its growth is being prepared in the European Parliament, which, beginning last year, is elected directly and will eventually become the place to settle this kind of case. But the Parliament does not yet have the experience and momentum for the job. That's why Mr. Schmidt went to England for a weekend's worth of diplomacy.