Canberra, 24 October 1961
Seceet
Common Market
This note attempts a brief stock–taking of progress in the Common Market exercise. [ … ]
Our Objectives
In the trade field we refer to our objective as ‘to preserve Australia’s trade interests’. These are ambiguous terms. At some stage we will need to give them more precision. One issue that has already arisen is whether we are seeking a ‘politically’ orientated solution to our trade problems, or one which gives us the best long–run trade opportunities in Europe. To illustrate the distinction: The type of arrangements under discussion in London—quotas and so forth—are designed to go some distance in meeting the interests of existing producers and groups of producers. If they come off few producers would be grievously hurt. In this sense such arrangements would be acceptable domestically. They are, however, rather static (despite any provisions that may emerge for growth factors) for they revolve around an existing pattern of trade. If this exercise had taken place in 1958 we would not have foreseen the great opportunities for aluminium. An alternative approach would be to concentrate our efforts on commodities and arrangements which we thought would have the greatest potential in the future. For example, we could put more weight on aluminium and less on dairy products or dried fruits.
On the political side, we do not appear to have formulated any precise objectives, beyond the vague (and perhaps unrealistic) one of maintaining the present type of relationships between the Commonwealth and the UK. As a personal view, it could be ventured that these political relationships are the most important to Australia over the long run. Our economy is probably sufficiently viable to take any upsets in trade without too much difficulty. The more alarming prospect is a weakening of Commonwealth ties that are unreplaced by other ties, so leaving Australia and New Zealand without many friends as European outposts in S-E Asia.
Also, the methods we use to pursue our trade objectives will affect means of achieving our political objectives. For example, a row in the Commonwealth about trade arrangements would react back on political relationships; or a trade link with Europe would have important political implications.
The burden of these comments are, first, that at some stage, we should be more precise about our economic and political interests; and, second, that we should make sure that the strategies for achieving them are integrated.
Our Position Vis-a-Vis the United Kingdom
The rationale of our position on trade is: why should we bear any costs at all occasioned by the UK’s entry into Europe when the UK will be obtaining the benefits. The UK attitude is: why should some disruption to Commonwealth trade stand in the way of us making a major decision which we believe to be in our best interests.
Given that each country’s first duty is to itself, these are quite reasonable, or at least understandable, points of view. Hence there is a real and fundamental clash of interests.
In the final upshot, of course, there will be a compromise between the interests of the UK, the Six, the Commonwealth and the US. Realistically we must accept this; and realise that it will fall short of what we want. But, tactically, we should not fall into thinking that there is no real clash of interests and that given co-operation everything will work out to the mutual benefit of all of us. This is a way of thinking that the UK has encouraged.
In this context we should not forget that the UK promised to seek ‘satisfactory arrangements’ before it told us that it will not seek significant amendments to the Treaty of Rome. We are under no obligation to accept this if, in our view, amendments are needed to ensure satisfactory arrangements.
The moral seems to be that we should be wary of the blandishments of the British to induce us into an unduly co-operative frame of mind. This is not to say we should not at least maintain the outward appearance of co-operation; for there can be no doubt that one of the things to be said in favour of the co-operative attitude we have adopted is that we have gained good-will in Whitehall.
[ matter omitted ]
[NAA: A4940, C3368 PART 3]