Canberra, 31 July 1961
United Kingdom and European Economic Community
Statement by the Prime Minister, the Rt. Hon. R. G. Menzies
The British Govemment has now made a momentous decision to enter into negotiations with the Members of the European Economic Community with a view to joining the Community if satisfactory arrangements can be made to meet the special needs of the United Kingdom, of the Commonwealth, and of the European Free Trade Association.1 A second, and more momentous decision will become necessary when the negotiations conclude and further consultation takes place, as it no doubt will, with the other Commonwealth countries.
I had been made aware, through messages from the British Prime Minister, of the decision of the British Government prior to the announcement in the House of Commons. Mr Macmillan’s messages to me covered both the terms ofhis Government’s decision and also the considerations which led his Government to it.
The issues for Australia are pressing and real. We will, I hope, with the assistance of Great Britain, be participants in a series of negotiations which I believe to be the most important, in time of peace, in my lifetime. They will demand of us both wisdom and patience and our constant vigilance.
On the commercial side we have taken the view and have expressed it strongly, that in the negotiations which will now take place arrangements to protect our trade and commercial interests must be secured. To this end further consultations of a detailed character on trade and commodity questions will take place between the United Kingdom and Commonwealth countries, including Australia, before substantive negotiations with the European Economic Community begin. When those substantive negotiations do begin we will persist in the presentation of our view that nobody can argue the case for our export industries half so well as we can ourselves.
One of the things Great Britain had to decide is whether in fact her membership of the Common Market would strengthen her own economy. It is tremendously important to us that her economy should be strengthened, because if it weakens our own British market will suffer.
With respect to preferences we have special arrangements which are of immense value to us and we regard ourselves as the Australian Government as having a primary duty to protect those interests. Therefore we have devoted much time to discussing them and to pointing out that you cannot tum a preferential system upside down without exposing our export industries such as wheat, butter, dried fruits etc to very great danger.
We have also felt that ifthe United Kingdom were to join the Community it would not be without effect on the close and individual political relations which characterize the Commonwealth. The European Economic Community, besides being a commercial arrangement, is also a great political conception, working towards something resembling a common political organism. It could be a tremendous thing for the world to have a cohesive Europe, but if this common European policy develops with United Kingdom participation one could hardly say that the Commonwealth would remain quite the same. l hope that I may be wrong, but so it seems to me.
I will make a statement to the Parliament as soon as possible after it assembles on August 15th. An opportunity will be given at that time to debate these important issues in terms of Commonwealth relations and in terms of our trade and economic interests.
The course of Macmillan’s EEC membership bid, 1961–63
The Macmillan Government’s EEC membership bid was spearheaded by chief negotiator Edward Heath in October 1961. At the commencement of the negotiations in Brussels, the Australian and British governments maintained a common front on the question of preserving the position of the Commonwealth in the United Kingdom market. The Australian interpretation of this position was succinctly put by Menzies in a cable to Macmillan: ‘In short, we want the whole of our trade interests in the United Kingdom to be protected’ (Document 1 57). But as the negotiations progressed, distinct cleavages emerged over the extent of Australian interests to be preserved, and the best means of securing these in negotiations with the EEC.
From the outset, the Australian Government made it clear that it was not prepared to allow Australia’s interests in the Brussels negotiations to rest solely in the hands of British negotiators. The Australians persistently pressed their wish to be included directly in the negotiations whenever their trade preferences in the United Kingdom were up for discussion. This request was officially supported by the British, but in reality the British delegation in Brussels felt that the presence of the Australians could only complicate already difficult talks between seven parties principal. Heath privately regarded the prospect of direct Australian participation ‘with the greatest foreboding’ (Document 169). The Europeans, too, were sceptical about the wisdom of admitting Australia to the negotiating table, and were particularly mindful of the danger of setting a precedent for other Commonwealth countries. Ultimately the Australians were granted a once-for-all opportunity to present their case in Brussels in April 1962, which fell well short of their expectations and proved of dubious advantage (Documents 164–69, 177).
More significant were the divisions that emerged over the course of the negotiations themselves. Having staked so much on the success of their EEC membership bid, the British were forced into a series of concessions to the Europeans on the question of Commonwealth preferences. In the spring of 1962, the British initially gave way on the question of continued duty-free entry for Commonwealth manufactures, and then later abandoned the idea of preserving the position of Commonwealth primary producers by way of ‘preference quotas’ in the European Common External Tariff (the preferred Australian method of preserving their share of the British market, whereby Australia’s preferences in the British market would be preserved vis-a-vis non-EEC importers only up to a fixed volume, commensurate with existing levels of trade). For the Australian Government, and particularly McEwen’s Department of Trade, this steady whittling away of the Commonwealth negotiating position was a cause for deep concern. The Australian’s felt that the British were not making a sufficiently tough stand on Australia’s behalf and were deliberately concealing their true negotiating position from Australia. The British, for their part, felt that the Australians persisted in holding on to unrealistic objectives in the face of the clear opposition of the Six and seemed to adopt an inordinately selfish attitude to the whole question of enlarging the EEC. As a consequence, there ensued a series of acrimonious exchanges between the two governments, particularly during McEwen’s six-week visit to London and Europe in March–April 1962. At one particularly low point in the discussions McEwen was moved to declare that if Britain ‘wished to treat the Australian Government as opponents, well and good; but he would like to know’ (Document 172).
In the meantime, Macmillan became increasingly wary of signals of the disillusionment of the Australian Prime Minister in the light of Britain’s European ambitions. Macmillan regarded Menzies as capable of causing enormous political difficulties should he publicly declare that Britain was selling out on the Commonwealth, and from the spring of 1962 a considerable amount of time was spent cultivating Menzies’ ‘British’ sensibilities. Menzies was inclined to be more concerned about the political implications of British entry than the economic consequences, particularly the prospect of the break-up of the Commonwealth. His correspondence and meetings with Macmillan in 1962 vividly illustrate the magnitude of the issues at stake.
During this phase, the United States emerged as an important third party to the Brussels negotiations. McEwen initially encountered extreme difficulties with the Americans, who not only warmly supported British entry into the EEC but also fiercely objected to any suggestion that Commonwealth preferences should be preserved in an enlarged EEC (Documents 170, 171 ). But as Australia’s demands in the Brussels negotiations were progressively whittled away, and as Macmillan’s political fortunes on the European question became more precarious, the Kennedy Administration recognised that an initiative was needed to prevent the negotiations from collapsing on account of failure to meet Britain’s promise to protect the interests of the Commonwealth. During meetings with Menzies in June 1962, the Americans undertook to use their stronger trade bargaining position with the Six to seek reductions in the European tariff wall (reductions that would equally benefit the Americans). Although this was a far cry from Australia’s opening posture of preserving a preferential position in the British market for Australian primary producers, it nonetheless provided a modicum of hope, and disguised the abject failure to preserve Australia’s trade advantages in Britain. As the Secretary of the Department of Trade, Alan Westerman, informed his colleagues, ‘it will be a pretty lonely world if we haven’t any entente with the Americans, and, with Britain in the Six, the curtains are up for our trade’ (Document 197).
1 Document 153.
[NAA:A1838, 727/4/2 PART 1]