BENELUX ECONOMIC UNION (BEU)

The Benelux Economic Union (BEU) was established in principle in 1944 by the countries of Belgium, the Netherlands, and Luxembourg. The Union did not become fully effective until 1958, however. The term "Benelux" is derived from the first letters in the name of each country. Like other economic unions, the goal of BEU is to promote economic integration and cooperation between its members. This effort takes the form of coordinated planning and subsequent action in foreign trade, monetary policy, finance, transportation, and tourism. Ultimately BEU is striving towards full economic integration.

The historic roots of BEU go back to 1912 when Luxembourg and Belgium signed an agreement at the Convention of Brussels that created the Belgium-Luxembourg Economic Union. The purpose of this union was to equalize customs tariffs and move towards a single balance of payments. In 1932 the Belgium-Luxembourg Economic Union and the Netherlands ended the Convention of with agreements on stabilizing customs duties, lowering import duties, and easing other restrictions on commerce.

During World War II the three governments-in-exile met periodically in London to solidify their postwar economic plans. In 1944 the Dutch Belgium-Luxembourg Customs Convention was signed but did not go into effect until 1948 when the war-ravaged economies began to stabilize. In 1953 the governments categorized their economic and social policies and in 1958 the Benelux Treaty of Economic Union was signed at the Hague. The signing and formalization of the Union was hastened by other European countries moving towards the creation of the European Common Market, predecessor to the European Union.

BEU seeks to achieve its goals through a broad range of activities, both economic and social. BEU allows the free movement of agricultural and finished goods, labor, and capital across its members' borders. Coordination in foreign trade has resulted in consistent customs duties on imported goods from nonmember countries and the dissolution of import duties and import quotas among BEU members.

In areas of social reform the Union has done away with passport restrictions and labor permits. Discrimination in terms of working conditions, benefits, and professional employment is also prohibited.

In 1987 BEU members began coordinating efforts to upgrade their respective infrastructures, especially in terms of communications, sewage handling. and disposal, and fire and police control. Environmental enhancements were also put into place in an effort to reduce noise, air, and water pollution.

BEU is a signatory of the Schengen Accord along with France and what was at signing West Germany. This accord eases border restrictions and enhances the internal security of its signatories. Revisions in the accord in 1990 addressed concerns over the joining of East and West Germany, immigration control, and restrictions and problems of political asylum. Italy, Portugal, Greece, and Spain all signed the accord by the early 1990s. With the dissolution of the Soviet Union and the opening of markets in eastern Europe, BEU is coordinating efforts for trade with members of the former Soviet bloc. Especially attractive are the Baltic States and the more open market economies of central Europe.

BEU is governed by a Committee of Ministers which is comprised of at least three ministers from each member country. Usually represented on the committee are the respective country's minister of foreign affairs and other officials responsible for foreign trade, economic affairs, or finances. The committee meets quarterly and is responsible for seeing that BEU activities fall within the aims and goals of the 1958 treaty. Decisions made by the committee must be unanimous.

The Benelux Interparliamentary Consultative Council was established by convention in 1955, prior to the Union becoming fully active. The council has 49 members, 21 each from the Netherlands and Belgium and 7 from Luxembourg. Council representatives are chosen by the parliaments of the three countries. The council makes policy recommendations to the Committee of Ministers only on resolutions the council has passed by a two-thirds majority; other decisions need only have a simple majority.

The Council of the European Union is responsible for making recommendations to, and implementing decisions made by, the Committee of Ministers. Representatives to the council are senior government officials of the three countries. The council also coordinates intra-Union activities, such as special committee and task-force assignments and serves as a liaison between these groups and the Committee of Ministers.

The Economic and Social Advisory Council submits proposals on various matters to the Committee of Ministers and, when asked, makes advisory proposals to the committee. The College of Arbitration settles intra-Union disputes, while the Court of Justice, which is comprised of senior judges from each member country, advises and, under certain circumstances, rules on intra-Union legal matters and problems.

The Benelux Economic Union is one of the world's oldest economic unions. Its philosophy and guiding principles operate within a democratic framework and have served as a model for other economic unions, especially the European Union. Nevertheless, the importance of the BEU has diminished over the years as the economies of its member countries have become integrated into the European Union. The BEU is an internal regional association within the European Community, which is in turn the core of the European Union. This relationship continues because the goals of the BEU and the goals of the European Community are not in conflict. Despite its lesser stature today, the Benelux Economic Union played a vital role in the decades following World War II in rebuilding and modernizing the Benelux countries.