London, 17 March 1961
Confidential
European Integration: The United Kingdom Position
This question was discussed by United Kingdom Ministers with Australia, New Zealand and Ceylon on the afternoon of Friday, 17th March. Present for the United Kingdom were Mr Selwyn Lloyd1 in the Chair, the Lord Privy Seal Mr Heath, Mr Soames, Minister for Agriculture and Minister of State to the Board of Trade, Mr Erroll, as well as officials including Sir Frank Lee, Joint Secretary, HM Treasury, Sir Algernon Rumbold, Deputy Secretary, CRO, Sir Roderick Barclay, Foreign Office and Miss Ackroyd, Assistant Secretary, Board of Trade. On the Commonwealth side were the Australian Prime Minister, Mr Menzies, with Sir Eric Harrison,2 Sir Allen Brown,3 Dr Whitelaw4 and Mr Fleming,5 Mr Bandaranaike, Finance Minister, Ceylon, with several officials, and Mr Holyoake, Prime Minister, New Zealand, with Mr Laking,6 and Mr Castle.7
Mr Lloyd opening proceedings said that in the United Kingdom the organisation dealing with this problem there was a Ministers’ Committee comprising the Prime Minister, Chairman, and himself as Deputy Chairman, whilst Mr Heath was usually the spokesman on the subject. There was also an Officials’ Committee of which Sir Frank Lee was Chairman.
Mr Heath said that the United Kingdom had tried to keep members of the Commonwealth informed during the meetings in Europe. He had seen Commonwealth Ambassadors in Europe, Sir Roderick Barclay had reported to Commonwealth officials (at CLC meetings). He hoped the system was working satisfactorily. Also messages had been sent by CRO to Commonwealth countries through UK High Commissioners reporting discussions. He recalled that at the last Commonwealth Prime Ministers’ meeting it was agreed that it was necessary for the United Kingdom to remain close to Europe. The United Kingdom was worried about two aspects in particular.
(a) It was worried about the economic division including the effect on investment which in turn included United Kingdom investment in the Commonwealth.
(b) It was worried about the political impact of the economic division. General de Gaulle had seemed to be in the process of creating a political division which would have an effect on NATO.
He told the Finance Ministers’ meeting in September that the United Kingdom would have liked to have exploratory talks with the Germans, emphasising that they were exploratory talks and not negotiations. This was still the position. The worst of all situations would be to start the negotiations which resulted in failure. The Prime Minister had seen Dr Adenauer and later the Italian Prime Minister8 and then General de Gaulle. He, Heath, had seen the French in September when they agreed that they would listen to any proposals that could be put forward. Since then there had been two rounds of talks with the Germans and the Germans had been very forthcoming. The Germans also wanted to talk to the French but Dr Adenauer had become ill and the timetable had slipped. The Franco-German talks when they had taken place did not go well and the French did not like discussing the matter through a third party. Meantime talks with the Italians had taken place and the Italians had been mostly interested in their horticultural problems. Then there were talks with the French a fortnight ago. At the same time the United Kingdom had been keeping EFTA informed—at two EFTA Ministerial meetings full reports of progress had been given.
[ matter omitted ]
The United Kingdom had put forward to WEU two main points which had been very carefully worded–
a. regarding a common tariff— ‘If the Six can meet HM Government’s Commonwealth and agricultural difficulties the United Kingdom can then consider a system based on a common or harmonised tariff on raw materials and manufactured goods imported from countries other than the Seven or the Commonwealth’.
b. The United Kingdom had told the Germans and Italians in response to inquiry by them that as part of an overall settlement the United Kingdom would see no difficulty in principle in the way of discussions between the Six and Commonwealth countries about possible reductions in the tariff preferences which the United Kingdom now enjoyed in those countries.
The United Kingdom had also said that it could not talk about the framework of a solution unless it was able to see the content. The United Kingdom’s first problem had been to persuade the Six that it was genuine. A reason why he had spoken to the WEU was that it was the only organisation where the United Kingdom sat with the Six as of right. Another reason why the WEU was considering a resolution from the European Assembly regarding closer co-operation by the United Kingdom with the Six [sic]. The United Kingdom had been able to put at the one time its political and economic position. It was believed that the five countries of the Six other than the French thought the United Kingdom was genuine. The French response had been that France would prefer the United Kingdom to join the Treaty of Rome. If the United Kingdom did not a variety of arrangements for association with the Treaty of Rome was possible. This was the first time the French had gone as far as saying even this much.
In regard to future talks the next meeting of the WEU would be on the 6th May when it was hoped that the Six would respond to Mr Heath’s speech. Before that there would be a further round of talks with the Italians and a second round with the French who had particularly asked that what the United Kingdom had said on tariff problems should be amplified. Agriculture would also be discussed again. The Germans had asked that they should meet the United Kingdom before this second round with the French. These were still all exploratory talks. Briefly in regard to the attitude of each of the Six countries–
The Germans were anxious for arrangements to be made to let the United Kingdom in.
The Dutch and Italians had similar views.
The Belgians had been rather pre-occupied with the Congo, had welcomed what had been done, but had put forward no ideas.
The French were becoming more flexible, though it was a matter of judgment as to how far they had really advanced. They were the critical ones. They were particularly worried about agriculture, the provision for which had been a fundamental reason for them joining the Treaty of Rome. If they exempted agriculture from arrangements with the United Kingdom the Germans who were uncomfortable about the common agricultural policy would probably try to go back to the start point and exempt theirs also.
Over the last six months he thought a more favourable attitude had grown up.
There was also the question of the American view. Towards the end of the previous administration he thought Dillon’s9 views had eventually changed to the extent that the United States considered that provided the arrangement was wanted by both groups and there was no undue discrimination against the United States, the United States would favour it. The position of the new administration was uncertain. The Prime Minister will discuss this with the President and Dean Rusk in Washington in the next fortnight.
Mr Lloyd then invited questions.
[ matter omitted ]
Mr Menzies asked what could be said about the timetable for talks. One read on the Ministerial level newspaper reports of what Mr Heath had said. His point was that this was an unsatisfactory state of affairs. He gathered there had been official talks in which there had been more information offered than there had been on Cabinet level. We certainly could not wait until the point of major developments. The timetable was therefore important. The United Kingdom had fired a few shots, and there was hope that with the French being a bit less rigid the United Kingdom could enter into negotiations which would crystallise the points. We wanted to be in before the point of crystallisation. There should be sufficient discussions for us to understand what the United Kingdom was putting forward and for us to consider it. There should be discussions between officials. How the problem would be resolved if it was to be resolved was very important. Australia had never taken a dog in the manger attitude. He thought that the problems created by Europe being divided were most important. But also from the Australian point of view questions of agricultural preferences etc and how they affected Australians were tremendously important. What had to be avoided was reaching a stage where Australia would offer views and find itself up against a certain degree of commitment. Before such a point the United Kingdom and Australia or Commonwealth officials should sit down together and get from the general to the particular. Australia would be concerned with that part of the price to be paid which affected Australia. He had rather gathered from Mr Heath that the timetable permitted this to be achieved ( Mr Heath said ‘Yes, it does’). But he would like to be clear that before the stage of commitment was reached by the United Kingdom there should be an opportunity for officials to sit down and get completely in the picture. Officials could then say to Ministers ‘This is how it looks, this is what is contemplated, some of it is a bit vague but this is where we can be more precise’. Ministers could then say ‘This is our position’. Trouble would be caused if Ministers were confronted unexpectedly with something that had been worked up and found that they were going against the stream.
Mr Lloyd said that there had been some difficulty at the Finance Ministers’ meeting in September because the Canadians had thought the United Kingdom had been negotiating when it in fact had not been.10 The United Kingdom had promised the meeting that before going into negotiations it would consult with the Commonwealth and work out procedures to be followed while the negotiations were going on. At present the situation was one of ‘supposing we can make reservations about agriculture etc is there a deal on?’ So no satisfactory answers could be given at present because there was no basis. If the French said ‘yes, we can see a basis’ then the United Kingdom would have to consult with the Commonwealth on what the Commonwealth thought. The United Kingdom had promised that it would not confront the Commonwealth with a position to which the United Kingdom had already committed itself.
Mr Menzies said that it often happened that people got to the stage where there was agreement ‘in principle’ and the rest was taken for granted. He would be very unhappy if this occurred. It was essential for the United Kingdom to be in a position where the Commonwealth countries were not only a party to their minds but were also disposed to agree with the broad outlines on major details. He thought that if the United Kingdom was looking for the door to open the sooner the experts could sit down together the better. He would be happy to send men from Australia for this. The point should not be reached at which it would be said in Australia that we had come in when the United Kingdom was half committed and the United Kingdom was withdrawing under pressure from us.
Mr Heath said that Mr Menzies was right. It would be extremely helpful to have talks with members of the Commonwealth. Until the last fortnight the question was ‘Are the French willing to discuss the problem?’ There was still argument as to whether the French were interested.
Mr Menzies said that two or three years ago the French were feeling their oats and were sticky. Dr Adenauer had a more amenable approach. We might now be coming into a more flexible position. This then could be the time. But surely the United Kingdom would not approach the problem without having some practical ideas in mind. Australia would want to discuss these ideas before the fog lifted. This was a matter of some urgency.
Mr Lloyd said that a meeting of senior Commonwealth officials was being proposed for the second half of May, as had recently been suggested. He did not think that events would move with such speed in Europe.
Mr Menzies said that once negotiations were on it would be a little bit late. It would be inevitable that the United Kingdom should go into negotiations with a set of ideas so once again he would emphasise the need for consultations before negotiations began. Officials could sit down and consider detailed propositions.
Mr Lloyd said that this had always been the United Kingdom intention. The meeting with the French in May should indicate whether negotiations were on or off. The French seemed to have come a little way. At this time last year it seemed that talks were useless. The United Kingdom wanted to know if there really was any move in French thinking and if they were ready to talk usefully. Crystallising of ideas had not and would not take place.
Mr Menzies referred to the French sign ‘Du bo, du bon Dubonnet’. He said he wants to be there at the du bo stage.
[ matter omitted ]
1 Chancellor of the Exchequer, 1960–62.
2 Australian High Commissioner, London.
3 Deputy Australian High Commissioner, London.
4 Robert J. Whitelaw, Financial Counsellor, Australia House, London.
5 Allan Fleming, Special Commercial Adviser, Australia House, London.
6 George Laking, Acting New Zealand High Commissioner, London.
7 Leslie Castle, Economic Counsellor, New Zealand High Commission, London.
8 Amintore Fanfani.
9 C. Douglas Dillon, US Secretary of the Treasury, 1961–65.
10 See note to Document 124.
[NAA:A3917 VOLUME 2]