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   4.3   THE  EUROPEAN   PREFERENCE
           4.3.1     TARIFF  SYSTEM
         When one speaks about protection, one thinks immediately about customs duties and tariff protection  with compensation tariffs. Such a solution is unrealizable for two reasons:
  

 

 

 

The present résumé of the work of Maurice Allais was written by Michel Gendrot

 

 

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 - First, it is practically impossible to proceed with an evaluation of the price of each product in each country. Thousands of civils servant would not be enough there. The decisions would be arbitrary, should be constantly modified , and would be very difficult to discuss.
- then and mainly, because the system of floating exchanges makes impossible any calculation of compensation tariffs .
         4.3.2     CONTINGENT SYSTEM
   A system of quotas sold by auction is the system easiest to establish, the more effective, and the most compatible with the general principles of an economy of markets. The system of quotas implies only one decision by product, say the maximum fraction of Community consumption of this product which one regards as likely to be ensured by imports.
    It would not be any quotas for the products that the community does not produce, for example raw materials, tropical products and craftsmen's products.
   For all others, the protection would rest on the auction sale of quotas for each product or group of products. The objective would be to ensure that for each product, or group of products, a minimal percentage of Community consumption is assured by the communitary production. The average value of this percentage could be about 80%.
    Inside the community, competition would be of course entirely free.
   That system would make it possible to avoid the partial or total extinction  of whole sectors of activity. There would be none internal subsidy. This system would not have any budgetary cost .

 
    What precedes is only a brief résumé of the system recommended by Maurice Allais. In his book (Appendix IV), he explains in details the application and answers the objections which could be done.
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