Canberra, 8 June 1967
514. Secret
Britain and the Common Market
I understand the material provided by Departments to Bunting gives a pretty comprehensive coverage of the facts and trade implications of Britain’s bid to enter the Common Market. Allan Fleming, Special Commercial Adviser in London is even more fully briefed and will be available to help you as required. It may be helpful to you, however, to have my thinking on a number of considerations (tactical rather than technical) which I believe are relevant to the kind of discussions I expect you will be having on this subject in London.
2. As you know, developments since Britain formally lodged her application for membership on 10th May have done nothing to clarify whether Britain will ultimately succeed with her application. At this stage, and possibly for some time to come, the outcome must remain unpredictable. There is a wide range of possibilities which appear to include the following:–
- A quick entry without any meaningful safeguards for the Commonwealth. (For example, Britain merely undertaking to do the best she could once inside the Community).
- Fairly prompt decisions on entry with the British genuinely trying to do something on a few key commodities with little more than taken [sic] efforts for some other commodities and total abandonment forthe rest.
- Acceptance by the British of some form of probationary association.
- A situation of uncertainty extending over several years.
- Abandonment of British hopes of entry.
3. I believe it important, because of this unpredictability, that we keep open for as long as possible our options to handle whatever situation may develop.
4. You are aware of the serious damage to our present British markets if Britain entered without safeguards. As you know, I do not believe that it would be possible for the British to achieve entry under conditions which would avoid damage to us. Because of the British determination to enter Europe I think we must recognize that there is very little scope for us, or other Commonwealth countries, to influence the terms upon which Britain might enter the EEC.
5. I therefore believe that the main task is to adopt a posture which is determined primarily by domestic political and economic considerations and which will give us the best presentational position with the Australian public and with the industries concerned, if and when market damage occurs. Accordingly, whilst there is little hope of our influencing the outcome, we must continue to maintain that all our trade interests are important and that we welcome Britain’s undertaking to safeguard them. At no stage should we do anything that relieves Britain of her responsibility to meet this obligation.
6. The first preliminary consultations with the British at the official level opened in London on Tuesday 6th June. These are being conducted on our behalf by a team led by Allan Fleming. The cabled instructions to Fleming and his first report have been repeated to Bunting.
7. On 22nd May we formally agreed with the British proposal that these opening talks should take the form of ‘preliminary consultations’. The British, however, have since indicated to Fleming that they hope the official talks can be carried ‘to finality’ after two or three days. We assume that their objective is to have the official talks over and done with by the time you meet British Ministers. From the instructions we have given him, you will see that it has been made very clear to Fleming that he should confine himself to an ascertainment of facts from the British and a presentation of facts to them.
8. By contrast, the New Zealanders have agreed to compress their official and ministerial consultations into less than a fortnight. The British now say that New Zealand has agreed to confine her interest to butter, cheese and lamb. On present indications the talks with Mr Marshall will be concluded by the time you have your own discussions.
9. I would not be surprised if, in your talks with British Ministers, they sought to move beyond the basic line which Fleming has been instructed to pursue. That is, they would be aiming to achieve a position from which they can claim that Australia:–
- has defined its most essential interests (and has therefore ‘given away’ the rest) and
- has accepted certain proposals about safeguards for these ‘most essential’ interests as an acquittance of Britain’s public undertaking that she would only enter Europe on conditions which protected the essential interests of the Commonwealth.
10. My view is that we should not now or in the near future move to any position of this nature although we should, I think, recognize that at some later stage there may be a ‘crunch’ which will force us to engage in a salvage operation of this kind. Decisions of this kind would involve jettisoning some industries to attempt to preserve the interests of others. You will be aware of the domestic political and economic implications of such a course. You will know how difficult it would be to make the selection. You will also appreciate that, once our decision was made and communicated to the British, it could not remain confidential for long. The industries adversely affected would soon know. It would be difficult for us presentationally if some industries were to suffer apprehension of damage without us having the certainty of protecting the interests of other industries. It would be more serious if the apprehensions were created unnecessarily because Britain either failed to achieve entry or itself decided to enter without safeguards for any of our industries.
11. It, therefore, seems important to me that we should defer taking decisions of this kind as long as possible. Furthermore, we should not make them until it is certain that Britain will enter and it is also certain that particular safeguards for particular commodities will be acceptable to the EEC.
12. For these reasons I believe we should not be shifted from our present line. This is that we recognise that decision in respect of entry are matters for Britain and the EEC. We welcome Britain’s assurances that she will protect our essential interests. We present the facts of our interests to Britain. We cannot select some of them as being more, or less, essential than others. We welcome the opportunity for consultation to ensure they understand the realities of the situation.
13. I shall send further comment if, in the light of Fleming’s progressive reports, this would appear to be useful. Fleming will of course bring Bunting up to date on his arrival in London.
[ matter omitted ]
[NAA: A 1838, 727/4/2 PART 7]