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COMMENTARY BY UK DELEGATION lN BRUSSELS ON THE NARRATIVE REPORT OF THE NEGOTIATIONS

Brussels, 8 March 1963

Secret

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Her Majesty s Governments Commitments

16. The Motion adopted by the House of Commons on August 3, 1961, had supported ‘the decision of her Majesty’s Government to make formal application under Article 237 of the Treaty of Rome in order to initiate negotiations to see if satisfactory arrangements can be made to meet the special interests of the United Kingdom, of the Commonwealth, and of the European Free Trade Association.‘ It was clear from Ministerial statements made during the debate preceding the adoption of the Motion that, in speaking of the special interests of United Kingdom, they had in mind primarily the interests of United Kingdom agriculture. The Prime Minister’s letter of application, addressed to the Chairman of the EEC Council on August 9, made the point specifically, saying that ‘Her Majesty’s Government have need to take account of the special Commonwealth relationship as well as of the essential interests of British agriculture and of the other Members of EFTA.’

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18. In the course of their visits to Commonwealth capitals in July, 1961, United Kingdom Ministers assured the Commonwealth Governments that Her Majesty’s Government would not enter the Community unless they could secure arrangements which would safeguard the vital interests of Commonwealth countries. They also promised that, if the United Kingdom entered into negotiation with the EEC countries they would maintain close and continuous consultation with Commonwealth countries. These undertakings were in general terms, and no assurance was given that Her Majesty’s Government would necessarily be prepared to accept the judgment of any particular Commonwealth Government as to what the vital interests of its country were. We do not believe that this pledge would, in itself, have given rise to serious difficulties in the course of the negotiations. But the manner in which it was fulfilled certainly did.

19. Before commenting on this point it is necessary to recall briefly the background of Commonwealth trading arrangements. The general picture was one of Commonwealth exports entering the United Kingdom market duty-free and in many cases enjoying a preference over the exports of other countries. With a few exceptions the Commonwealth had no contractual rights to special treatment which could not be terminated at six months’ notice. On the other hand these trading arrangements had been in force for many years, and Commonwealth countries had come to rely upon them. Their economies had been developed in the expectation that the arrangements would not be suddenly changed. It was clear that the Commonwealth would be inclined in these circumstances, to seek to place a broad interpretation on the undertaking to safeguard their vital interests.

20. Looking back today, it seems to us probable that we should have done better to form a judgment at an early stage as to what interests of Commonwealth countries we should regard as vital. It would also have been helpful if we could have formed a clearer view as to what would be negotiable with the EEC countries. But on this point it is clear that we were then too optimistic, and we expressed ourselves accordingly to Commonwealth representatives with unfortunate effects. When, in September, 1961, we held consultations with representatives of individual Commonwealth Governments prior to the opening of negotiations in Brussels, we allowed ourselves to be persuaded to put to the Six, when the negotiations began, proposals on a number of points which in the event proved quite unnegotiable. It is true that no undertakings were given to adhere to these opening positions throughout the negotiations; but an assumption inevitably tended to grow up either that these positions were reasonable and that any departure from them would be likely to prejudice vital Commonwealth interests, or at least that there could be no departure from them without full and prolonged consultation with the Commonwealth Government or Governments concerned. This would not have been so embarrassing had the range of subjects covered in the discussions been kept reasonably small. In fact, however, Commonwealth Governments pressed all their trading interests, irrespective of their relative importance. As a result, the Delegation were instructed to put forward proposals on questions ranging from the trivial to the essential, irrespective of the prospects of negotiability. When it turned out that they were not negotiable it was often a long time before authority was given to replace them by other proposals.

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Concluding remarks

49. The negotiations were unique both in the scope, complexity and importance of the issues involved, and as regards the arrangements which we made for their conduct. We have therefore thought it right to make a searching and critical analysis of the way they were handled on the British side. While we have concentrated on matters which were the direct responsibility of the Delegation we have inevitably been drawn into comment on a number of points which though not our direct responsibility, bore heavily on our work. It is impossible for us to say to what extent changes on any or all of the points which we have made criticisms would have affected the outcome of the negotiations. Nor should the number and scope of our criticisms be allowed to obscure the broad field over which our conduct of the negotiations was plainly on sound lines.

50. The failure of our enterprise was a great disappointment to us in the Delegation because we are convinced that Britain’s proper role in the second half of the twentieth century is to take part in the movement for European unity and to join with those who share our views in seeking to direct it into the right channels from our point of view rather than remaining a spectator, and perhaps an increasingly helpless one, of European developments. A successful conclusion would have been the only satisfactory result of the negotiations. Nevertheless, if they had to fail, they could scarcely have been brought to a halt in a manner less damaging to us.

51. Finally we have considered what the effect of our negotiations has been and whether, in the light of what we know at the moment, it is better, from the point of view of European and world affairs, to have tried and failed than never to have tried at all. In our view the answer is that the effect of our application and negotiation, despite the failure, has been to improve our position.

52. First, there is no doubt that the Lord Privy Seal’s speeches at meetings of the Seven, whether in Brussels or at meetings of the Western European Union, his explanations of our point of view in his innumerable meetings with European statesmen, the conduct of the negotiation in Brussels, the speeches made by the Prime Minister and other Government spokesmen at home, and the attitude adopted by the whole of the responsible British press, have by their accumulated effect gone a long way towards removing the deep suspicions of British policy towards Europe which were created in Europe during the fifteen years after the war.

53. In the second place we believe that what has happened has not only enabled the Europeans to understand the change in our European policy in the last two years but has also brought about a better understanding of the European idea in Britain. If during the negotiations the line the Commission took did not always suit us this was only natural because they served the Six. But they served the Six well and they would have been good servants of the Seven if we had joined. The Delegation formed the view during the negotiations that the Community method, in its pragmatism, in its thrashing out of proposals in free discussion, and in its ability to produce constructive recommendations when it is working at its best, is a new international method which is effective and would have suited us well.

54. Thirdly, our negotiations and the manner of their termination brought into the open and strengthened the latent resistances within the Community to being shut up in a tight political and economic bloc dominated by France. They also had a considerable effect on the Community itself. As the Commission have said in concluding their own report to the European Parliament on the negotiations, the process ‘brought with it greater awareness of the responsibilities an enlarged Community would bear in the world. Because of the United Kingdom’s almost worldwide responsibilities, the questions raised by the United Kingdom Delegation also made it vital for the Community to define without delay the main lines of such a large and powerful common market with regard to matters which, once Britain was a member, would have had a direct and crucial impact on the overall balance of the free world.’ We believe that, even though the Community is not for the present to be enlarged, this question of the Community’s relations with the outside world will now appear to them differently and in a way more favourable to us. Before we applied to join there was a real danger of Britain being faced with an inward-looking Europe of the Six, economically protectionist, and politically acting together in a manner likely to be contrary to British interests. As a result of our application we believe that, for the time being at least, this risk is less; moreover, the Brussels negotiations have left open the possibility of building in the future the kind of Europe we want to see.

The Wilson Government and the second EEC membership bid, 1966–67

In the immediate aftermath of the 1963 breakdown came an interim of several years when the prospect of EEC membership faded from view. While the British Government never renounced its EEC ambitions, it seemed clear that the prospects were dim so long as General de Gaulle dominated the European political landscape. The Conservatives were defeated at the 1964 election, and the incoming Wilson Government initially retained its opposition to full EEC membership, campaigning instead on a platform of ‘closer relations’ with the EEC. In reality the Labour Party was deeply divided on the question, and the steady drift of the new government towards the EEC during its first two years in office was the outcome of internal struggle as much as changing external realities. Throughout the three-year period from January 1963 to 1966, the Australian Government was completely silent on the subject.

This all began to change in the early months of 1966. By the March 1966 election, Wilson had publicly begun to alter his position, stating that Britain would be prepared to consider membership of the EEC if certain conditions could be met. Like Macmillan before him, he made key changes in personnel to bring a more pro-European emphasis, appointing Michael Palliser as his Private Secretary and moving George Thomson to the Foreign Office as ‘Chancellor of the Duchy of Lancaster’ with special responsibility for European affairs. With the July 1966 Sterling crisis, the government’s position tilted further towards EEC membership. The massive loss of reserves had severely punctured the growth assumptions on which the government’s national economic policy had been based, and new measures were desperately sought as a remedy. The EEC emerged as a potential solution to these difficulties, although the precise economic logic was never fully spelt out. It is equally clear that the difficult decisions on defence expenditure in the Far East necessitated by the Sterling crisis (dealt with in Part 1 of this volume) also tended to emphasise the need for more intimate relations with Europe. Wilson announced his decision to apply for membership of the EEC on 2 May 1967, which was only weeks after he had communicated to Australia his intention to withdraw Britain’s military capability from East of Suez. Thus the two issues were inevitably viewed in Australia as part of a far-reaching reappraisal of Britain’s primary obligations and commitments overseas.

The documents in this section pick up the story in June 1966, when Australian representatives in Britain and Europe found themselves increasingly under pressure to respond to the Wilson Government’s overtures towards Europe. Alexander Downer in London misread the signs in Canberra, delivering a speech in May 1966 in which he emphasised the untold damage to Anglo-Australian relations which would result from British membership of the EEC. This prompted a reaction from the Australian mission in Brussels (Document 217) and ushered in a period of reappraisal of Australia’s position. It quickly emerged that the Australians had learned from the Macmillan bid that little could be gained from raising the stakes too high. The Australian economy was diversifying and growing at a healthy rate, which meant that the overall impact of British entry was less of a concern. But there was still the problem that the industries at risk in 1962—wheat, dairy, canned fruits and sugar—were equally if not more exposed to the loss of British preferences in 1967. This placed the government in a political bind—not wishing to overstate its objections to British entry (lest Australia be blamed for any further breakdown) yet clearly anxious not to seem to be jettisoning Australian industries. The contrast between McEwen’s public and private statements on the subject in 1966–67 is revealing of the dilemma. (Documents 229 and 232). Also telling is that during Harold Holt’s visit to London in June 1967 he effectively told Wilson that he would prefer to avoid discussing the EEC in any detail (Document 235).

It was equally clear that the British too had learned the lessons of 1961–62 and were determined not to waste precious negotiating coin arguing the case for Australian interests. The best they hoped to achieve for Australia was a transitional period between entry into the EEC and the final dismantling of Commonwealth trade preferences. But again there were difficulties in reconciling the needs of public and private diplomacy, and a minor row erupted in Whitehall over how ‘transparently honest’ they should be with the Australians on this point (Document 238). Ironically (in the light of the situation in 1961–62), however, the Australians seemed to prefer a more ambiguous understanding with the British about the objectives of their EEC negotiations, and flatly refused to be drawn into detailed negotiations about solutions for ‘essential’ interests—which would inevitably have entailed conceding the interests of industries deemed ‘inessential’ (Documents 232 and 233). This was the very converse of the situation in 1962, when McEwen had demanded detailed negotiation targets which the British were highly reluctant to reveal (Document 172).

On the whole, both sides managed to avoid the kind of public discord that had marked the 1961–63 EEC negotiations, with the exception of a brief period in October 1967 when Alexander Downer conducted what the British referred to as his own ‘mini-campaign’ against British entry (Document 241). The British drew confidence, however, from their assessment that Mr Downers remarks seemed to ’arouse remarkably little echo’ back in Australia (Document 242). The whole tone of the Australian reaction at all levels had clearly changed, despite some residual concerns in the Department of Trade and Industry about their ‘off-handed treatment’ by the British (Document 243). The British, for their part, had become resigned to this state of affairs: ‘The plain fact is that neither we nor the Australians had anything very positive to offer; the atmosphere was therefore bound to be a little depressing’ (Document 244).

[UKNA: FO 371/171441]