152

MEMORANDUM BY SANDYS

London, 21 July 1961

Secret


Europe: Talks with the New Zealand, Australian and Canadian Governments

In the past three weeks I have had talks with the New Zealand, Australian and Canadian Governments about the possibility of Britain joining the European Economic Community. […]

2. These statements tended to highlight the differences and did not reflect the very friendly atmosphere in which the talks were conducted, particularly in New Zealand and Australia. This was in part due to the fact that both the Australian and Canadian Governments are expecting a General Election during the next few months and thought it politically necessary to make it clear that they had stood up firmly for their countries’ interests.

3. The reactions of all three Governments followed the lines of their earlier statements, except that in our confidential talks they put more emphasis on the political and less upon the economic consequences than I had expected.

4. They undoubtedly have an undefined fear that a close economic union between Britain and the other countries of Western Europe will lead in one way or another to a political union which would weaken the Commonwealth relationship.

5. In addition to this general anxiety, the Canadian Government have the additional fear that any loosening of Commonwealth ties would make it more difficult for Canada to prevent herself from being sucked into the economic orbit of the United States.

6. I naturally assured them that we had no thought of allowing our political identity to be submerged in a European super state and that, if a wider political association became necessary, we would be more likely to favour the larger concept of an Atlantic Union than any purely continental system. I also pointed out that by joining military alliances Canada, Australia and New Zealand had, like Britain, to some extent given up their full freedom of action in the most important political sphere, namely defence. Yet it had never been suggested that Canada’s membership of NATO, or Australia’s and New Zealand’s membership of SEATO andANZUS, was in any way incompatible with their membership of the Commonwealth.

7. On the economic side all three countries were naturally worried about the possible consequences for their trade. It was clear that New Zealand would be utterly ruined if Britain joined the Common Market without making far-reaching arrangements to maintain an outlet for New Zealand lamb and butter. I assured the New Zealand Government that we well understood their position and they decided that their best course was to trust Britain not to let them down. They naturally emphasised the importance of maintaining unrestricted duty-free entry into the British market. However, in the Press statement they agreed to say that they would be prepared to examine other methods of securing a comparable outlet for their produce.

8. The Australian and Canadian Governments explained the serious damage which their trade would suffer if no special safeguards were provided; and they made it clear that they were not optimistic about the prospects of negotiating satisfactory arrangements. Yet neither Government argued that they had a right to prevent Britain from entering the Common Market, if she were convinced that it was in her best interests to do so.

9. All three Governments especially recognised that, notwithstanding the interests of other Commonwealth countries, the decision must rest with Britain.

10. I emphasised that we had as yet reached no decision and would not do so until we had carefully considered the views of the Commonwealth. Yet there is no doubt that all three Governments expect that we shall shortly decide to open negotiations without further consultation with them.

11. There is no doubt that the three Governments much appreciated the thoroughness with which they were consulted, and I assured them that if negotiations were started we would continue to consult them closely at all stages. The Australian Government expressed the strong desire to be represented directly in any negotiations affecting their interests. While realising that this was not a matter which the British Government could decide, they hoped that we would do our best to arrange this for them.

12. It is perhaps worth adding that in all these countries the Press (including leading Government newspapers) showed a remarkable understanding for the arguments which have led Britain to consider joining the Common Market, and in some cases strongly criticised their Governments for trying to hold us back.1

13. From the above it will be seen that so far as New Zealand, Australia and Canada are concerned, there is nothing to prevent us, if we so wish, from opening negotiations with the European Economic Community. The three Governments expect us to do so and will be quite surprised if we do not.

1 This was more the case in Canada than in Australia or New Zealand.