Canberra, 10 July 1961
Secret
Without memorandum—United Kingdom and European Economic Community Consultations.
1. A discussion was held on meetings already held with Mr Sandys and also on the position it would take when the meetings with Mr Sandys resumed.
2. The explanation of the United Kingdom’s willingness to negotiate with the six was not to be found in any detailed assessment of specific advantages and disadvantages. It was a general belief that it could no longer afford, either politically or economically to stand aside. It felt that outside the European Community the United Kingdom would decline economically and would be a diminishing world political factor. On the other hand, it would at least have the chance of increasing both its political and economic status if it joined.
3. The Cabinet felt that there would be a good deal of merit, in terms of increasing European unity, in United Kingdom membership of the Community (politically speaking). However, there would be other and disadvantageous results in that a diminution of United Kingdom’s sovereignty would be inevitable and its relationships with the Commonwealth would be less free and individual.
4. On the economic side, the general view was that although the degree of continuing preference would probably be secured for some commodities, the total result seemed unlikely to be satisfactory in the short-term. In the long-term which was the real question, it was still less so. It may be necessary, if the United Kingdom proceeds, to consider an approach to the United States, as a considerable instigator of the Common Market and of the United Kingdom’s current exercise, to assist in resolving the resulting trade and commodity problems which Australia, Canada and others would have.
5. The Treasurer referred to finance problems as outlined by the Treasury. It was agreed that a memorandum on these might be put to the United Kingdom for comment, and for taking into account in reaching their decisions.
6. The next step should be to exhibit Mr Sandys’ points of difference which exist and to discuss a communique. Views might be put to Mr Sandys:–
- That the Commonwealth relationship would be materially altered as a result of United Kingdom entry.
- It is for Great Britain to decide and we do not feel entitled to object. We do not offer approval of United Kingdom entering into negotiations—this for several reasons- 1. it would imply that we had been willing to see the United Kingdom join in a Common Market; 2. we are not convinced that United Kingdom’s own economic interests are best served by joining the Common Market; 3. our own trade position is by no means secure; and 4. we have other apprehensions relating to sterling area arrangements.
[NAA:A3917 VOLUME 9]