The Atlantic Alliance’s Rearmament Programs and the Start of Postwar Multilateral Industrial Cooperation: Trade Integration, Financial Burden-sharing, Balance of Payments Stabilization, and the case of Italy

This contribution first briefly reviews American and NATO policies
and legislation that after the end of WWII tuned the trajectory leading to combine coordinated
rearmament to Western Europe with the enhancement of intra-European economic integration.
The chapter focuses on the case study of the Italian economy, which
was exemplary on multiple dimensions in so far as it offered unutilized industrial
capacity, abundant workforce and a quickly developing domestic
consumer markets which forced American economic diplomats and national
economic policymakers to balance defense effort procurements and
adequate supply of civilian consumer goods. As sections highlight, though
it was the recipient of a fair share in total contracts placed with European
industry, apparently Italy’s foreign trade did not take solace from it.
Thereafter, this chapter cast light on the specific linkage between the
off-shore procurement programs and the implications of coordinated financial
burden-sharing at NATO level to make the argument that the off-shore
procurement contracts placed by Washington or the Atlantic alliance with
single member countries for supplying other allied nations with end items
or spare parts was not only consistent with early U.S. concerns, since the
Truman administration, for a rearmament not at variance with economic
reconstruction and prosperity.
Rather, in so far as they were financed through a NATO common fund and based on a financial burden-sharing principle, coordinated multilateral production programs were consistent
with the priority target of balance of payments stability, foreign exchange equilibrium and foreign currency reserves, considered the very cockpit for transatlantic trade integration and the establishment of a stable European trade area and consumer market.