Canberra, 10 & 11 July 1961
The United Kingdom and European Economic Community Consultations
1. The Prime Minister recalled that it had been proposed that Mr Holt would raise some points regarding sterling area and other financial implications of the United Kingdom’s entry into the European Economic Community. Mr Holt said that as some of the matters he would be raising would be highly technical in nature it would probably be more appropriate if they were raised by memorandum after the discussions. Mr Sandys agreed that this course would be suitable.1
2. The Prime Minister then referred to the political and economic aspects of the United Kingdom’s proposals which were causing Australian concern. He said that as regards the political implications, he felt that the Australian viewpoint differed from that of the United Kingdom. Whereas the United Kingdom emphasized the advantages which could be obtained through membership of the Community in that it would be in a position to influence the direction of the policies of the Community, Australia could see substantial disadvantages in that the structure of the Commonwealth would be materially affected. It may be that such a change was a price worth paying for European integration, and Australia did not wish to make a judgment regarding that but the conclusion was that the Commonwealth would not remain unaffected if the UK were to join the Treaty of Rome.
3. On the economic side, Australia did not consider that it was her business to decide whether for the UK the advantages outweighed the disadvantages but it was sceptical regarding any net advantage. It saw great risks on the United Kingdom account. However, the United Kingdom had the major judgment to make and would gain or lose in a major way. But Australia had her own direct economic interests with the United Kingdom and these, as was pointed out yesterday, involved industries of first importance—for instance, wheat, sugar. The Australian Government could not accept a position in which it was on record that it was prepared to put industries such as those at risk. It would not be a proper course for Australia to issue a caveat against the United Kingdom entering into negotiations with the Six but this absence of objection could not be taken to mean approval of a decision to negotiate. If approval were indicated, it would come to be regarded as approval not only to negotiate but also as approval to join, and in this respect, it had to be realised that once negotiations had begun, it would be difficult for the United Kingdom to disengage. Australia did not feel called upon to approve or object. However, if the United Kingdom felt it should negotiate, Australia should be present and participating. The mechanical difficulties associated with direct participation in negotiations were fully recognised but the Australian Government could not be in the position of having placed the defence of Australian industries in the hands of others. Judging from the terms of the communique issued after Mr Sandys’ New Zealand discussions, it would seem that the Australian position was perceptibly different from that of New Zealand.2
4. Mr Sandys regretted that there were differing views on the political implications of membership of the Community. It had seemed to him from the earlier discussions that the Australian Ministers did fully appreciate the advantages. He was not clear on what the Prime Minister had meant by his reference to the ‘structure’ of the Commonwealth but he took it that he was referring to the general framework of Commonwealth consultations.
5. The Prime Minister commented that this was so and that perhaps ‘relations’ was a better word than ‘structure’.
6. Mr Sandys said that he saw the results of joining the EEC differently. If it was assumed that a European Political Federation would be formed, of which the United Kingdom was a member and to which she surrendered important elements of her political sovereignty, he would agree with the Australian view. But he could not foresee that the United Kingdom would be prepared to go as far as that. There was no thought of Britain forming part of a super state and he could not see the reasons for Australia’s apprehensions. Even if the United Kingdom failed to exercise the influential role that it thought it might, he did not feel that this need affect relationships with Commonwealth countries. He did not see how membership of the EEC could restrict UK sovereignty except in economic matters.
7. The Prime Minister drew Mr Sandys’ attention to the wording of paragraphs 9 and 10 of the statement which had been circulated on the 8th July.3 He pointed out that reference in that document clearly implied an influence that went beyond the economic.
8. Mr Sandys repeated that he believed that it was highly unlikely that a Federation would develop in Europe. It was not his intention to suggest that the United Kingdom’s policies might not be modified as a result of closer contact with the other members of the Economic Community. This was in the nature of things. They were already modified in this sense through relationship [sic] with NATO and with the USA. But it need not and it did not follow that this would affect the freedom of the United Kingdom to come to the Commonwealth table as a free agent. He could not conceive that the political freedom would be affected to such an extent by membership of the Community that there would be a complete change in British outlook and policies. The United Kingdom would not seriously think of entering any association which reduced the effectiveness of the links with Commonwealth countries.
9. At this stage the Prime Minister commented that the issue came down to a matter of judgment as to what the final outcome of any decision to assume membership of the Community would be. He accepted the point that advantages would flow from the experience and maturity of a unified European Community, benefiting from the influence of the United Kingdom. But he also wished it to be on record, as the view of the Australian Government, that as the Community became more politically powerful, Great Britain would become so much engaged in European affairs that her Commonwealth interest would reduce.
10. Mr Sandys expressed the view that if this happened it would be quite disastrous, but he could not feel that the Australian fears were well founded.
11. Any influence on United Kingdom attitudes arising from Community membership would not deprive her of independence of outlook, thought and policy. He was deeply conscious of the importance of the Commonwealth and believed that despite its current change of character it would remain a strong and decisive influence in world affairs. It was the only genuine bridge between the races and the continents. Further, it was an important political force with power to mitigate tensions and hatreds. It was only comparatively recently that the United Kingdom itself had begun to recognise the possibilities arising from the new Commonwealth, and to become aware of the part it could play in international affairs. It would be damaging to United Kingdom/Australia relations if Australia had in mind that the United Kingdom was thinking lightly of its Commonwealth links.
12. The Prime Minister assured Mr Sandys that the United Kingdom was not under charge of treating the Commonwealth lightly, but Australia believed that what was before the United Kingdom was the very difficult choice between the Commonwealth and Europe. The answer, either way, was a momentous answer.
13. Mr Sandys stated that if it was a matter of choice between the Commonwealth and Europe, the United Kingdom could not choose Europe. The problem had never presented itself as a matter of choice. On the contrary the United Kingdom believed that if it did not take action to associate itself with Europe, its relative importance would decline and a declining Britain would soon bring an end to the strength of the Commonwealth. The United Kingdom believed that its entry into Europe would, in fact, bring new strength to the Commonwealth. Mr Sandys said that it would be painful if Australia were to feel that Great Britain was in any degree turning away from the Commonwealth.
14. The Prime Minister considered that Mr Sandys was presenting the matter too much in the nature of a dichotomy. Australia agrees that there are powerful reasons for the United Kingdom to enter the European Economic Community but it also says that one of the consequences would be a fundamental change in her relationship with the rest of the Commonwealth.
15. Mr McEwen pointed out that there is an analogy with the Commonwealth itself. Membership of the Commonwealth makes its members open to influence by other members. In the same way NATO influence goes beyond strictly military affairs. This was an imperceptible but nevertheless real consequence of working together in an international organisation.
16. Mr Holt said that Commonwealth relationships are not based merely on sentiment. There are important practical considerations. As these practical considerations abate Commonwealth relationships will become far less intimate. He felt that however powerful the reasons may be which urge the United Kingdom to take the course it proposes, it should be kept in mind that Australian Ministers cannot see the outcome except in forms of a weakening of the Commonwealth.
17. The Prime Minister said that Australia would give further consideration to the views expressed by Mr Sandys.
18. Referring to the doubts on the economic value of entry into the Community, Mr Sandys said that he would agree that the net advantage was not particularly clear. Competition with European industry would be especially difficult. But the likelihood of a great weakening of the United Kingdom if it remained outside the Six had to be remembered. The United Kingdom understood the importance of Australia’s commodity interests and it was not its intention to enter into any arrangement which did not assure protection of these. The United Kingdom had practical ideas as to how this might be done but how effective these ideas can be made in practice depends on the attitude of the Six. The feeling was that arrangements can be made which would be acceptable to the Six.
19. Australia has said that if the United Kingdom decides to negotiate she will not object, but neither will she approve. Mr Sandys said he could appreciate the political point that any attitude adopted by the Australian Government should not be taken to imply approval of a decision by the United Kingdom to enter. But he hoped it might be possible to separate the two issues of entry into negotiations and entry into the Community. The United Kingdom would like Australia to consider whether it could say that if the United Kingdom were to decide to enter into negotiations, Australia would understand the reasons for the decision. The United Kingdom would make it quite clear that its ability to join depends on the outcome of the negotiations. Assurance was also being given to Commonwealth countries that when the outcome of the negotiations is known, it would be discussed with those countries before a final decision was taken by the United Kingdom. As to Australian participation in negotiations, the United Kingdom would welcome arrangements such as Australia suggested. No assurance could be given regarding Australia’s direct participation because the agreement of the Six as well as of the United Kingdom was needed. Therefore, it might be better not to state it. But in practice it could be expected that direct negotiations would be likely to occur.
20. The Prime Minister interposed that, unless it were stated, the Australian wheat farmer, for instance, would not know this. He felt that the communique could properly contain a reference to the views of the Australian Government on this point and quoted a form of words which he thought might be appropriate.
(At this stage a draft of the final communique prepared by the Prime Minister was made available to the United Kingdom delegation. The remaining discussion at this meeting and at two subsequent meetings on 10th and 11th July concerned the form of the communique.)4
1 See note to Document 145.
2 The Wellington communique recorded that New Zealand would ‘understand’ if Britain opened negotiations with the EEC.
3 See note to Document 144.
4 The final communique appears as Document 150.
[NAA: Al838, 727/4/2 PART 1]