Canberra, 28 July 1962
Confidential
It is apparent from your messages of the 23rd and 24th July, that you expect the negotiations with the Six to move pretty quickly now.1
We have noted your assessment of the prospects and possibilities. I do not wish to discuss that assessment in detail but there are some comments I wish to make about the situation as a whole.
From the tone of your message I conclude that you see no real hope of securing an offer of terms which we would regard as necessary to protect Australia—or Commonwealth—trade interests, and that you feel forced to settle for something less if an agreement is to be made.
It seems you are saying to us that the best the Six may agree to would be a phasing out operation for the preferences on temperate foodstuffs, and a promise to work towards world solutions for major commodity trade items in the long period with the Six prepared to see, commodity by commodity, whether any special transitional arrangements are necessary to prevent serious damage to our trade.
We can accept the importance of positive assurances by you and the Six in relation to possible world solutions. However, before any assurances could have real value to us they would have to be precise and they would have to express a positive intention to follow them through. I am not speaking of details, but the principles to which you and they would commit yourselves—principles relating to production and internal price policies; principles indicating the safeguards we and others could expect to obtain against the depression of import prices by their operation of variable levies and other devices; principles indicating that we can expect to obtain prices for our exports which are remunerative in the light of the costs of a reasonable cross section of the most efficient world producers; and principles relating to access.
It is apparent that the details of what your joining the Common Market will mean for our meat trade, for trade in cereals, dairy products and other items will not emerge with any clarity from your negotiations prior to September. We could not make a judgement on the effect of your accession on our trade in the absence of as precise a set of principles as it would be possible to contrive and to which the adherence of yourselves and the Six could be pledged by September. These principles could be incorporated in the declaration of intent which the paper of the Six envisages.
The same kind of principles I have referred to above in connection with world solutions could be spelled out to apply as a commitment in respect of individual commodity safeguards in the transitional period.
Given a sufficient and satisfactory elaboration of principles to which you and the Six would be pledged in connection with both transitional and perrnanent solutions, it is possible that the question of preferences could in itself become of less importance. Given no such clear commitment to principles and objectives, any proposition of decalage2 could only be regarded as completely failing to protect our interests.
If you are able to emerge from these negotiations with a thoroughly satisfactory declaration of the intentions, principles and objectives of yourselves and the Six to which you and the Six are prepared to commit yourselves, then its effect, from our point of view, would be enhanced by American support—if they could be brought to support it strongly as offering a basis for ensuring safeguards for their trade problems. Recent talks which our officials have had with them suggest that this might be both possible and desirable.3
1 Document 194.
2 From ‘decalage’, the French term used in the Brussels negotiations for phasing out Commonwealth preferences in the UK.
3 Documents 199 and 200.
[NAA: A 1838, 727/4/2 PART 3]