Australian High Commission, London, 9 June 1967
7262. Confidential
UK-EEC Consultations
1. We met morning and afternoon today Thursday 8th June. […]
2. Main points of the meeting were the repeated attempts to lead us into discussion of the relative importance of trade items and our ideas on safeguards, renewed and more explicit concern by officials that we should register their views as officials of the need for ministerial discussion of specific trade questions affecting our interests well before a possible July ‘opening statement’ by UK (they emphasised ‘possible’) the useful disclosure of UK attitudes at the end of our commodity discussions. We of course adhered to your line on discussion of ‘essentially’ .1
3. Snelling opened by saying that as a preliminary to a meeting of Ministers which he assumed would have to take place it would be useful if we advanced ideas on safeguards and if the UK suggested what might be negotiable or what might be regarded as essential without in any way taking final positions. In discussions with the New Zealanders they were trying to establish a range of alternative solutions which might be put forward as being negotiable. UK officials were under strict ministerial instructions to plan (underlined on the assumption that an application would be made in July[)]. At the Commonwealth liaison committee he (Snelling) had warned Commonwealth countries to present their ideas to the UK as quickly as possible. So the UK would like this meeting to develop some ideas on specific solutions for specific problems.
4. We replied that it now appeared that we had been approaching the meeting with somewhat different conceptions of its purpose. We had indeed noted the statements of Messrs. Wilson and Brown and Snelling’s statement at the CLC. However, we would like to draw attention again to their letter via Rooke in Canberra which asked for preliminary discussion. Accordingly at this meeting we were describing facts on commodities giving existing and prospective conditions of trade in the UK and EEC and assessing loss in our trade if there were no safeguards. This seemed to us not only a useful but a necessary beginning. We had no brief to discuss ‘essentiality’ of items. We were concerned with our trade. If since the Rooke letter a situation has arisen to make it urgent that we have something more than ’preliminary’ discussions it might have been expected that formal advice would have come to us in the same way as the exchange of correspondence with Rooke.
5. Snelling replied that if their timetable to be ready by July was adhered to it would be hard to fit in discussions on essentiality if we did not break the ice now. He understood that Mr Holt had indicated that he would not be discussing commodity items in depth. The message delivered to us in Canberra he said he would admit referred to ‘preliminary discussions’ but it also went on to refer to ‘essential interests’. Such discussion could at this stage be held without commitment. They themselves had no instructions from Ministers on specific points. Perhaps we could try to feel our way toward a formula whereby a number of solutions could be listed and whereby we could establish criteria or some idea of magnitude possibly on the basis of the relation of items in total exports.
6. We repeated that we were not proposing to divide items into some arbitrary grading of essentiality, a process which could be quite misleading. For example it would be fairly easy to divide our trade into items or sections of items small enough to have allotted to them an indicator of zero as the measure of their essentiality. At the end all the zeros would be added up to make zero. We would not be adopting an arrangement similar to that which the UK had made with New Zealand for study of items because our situations were obviously different. At the same time we placed considerable reliance on the United Kingdom’s undertaking to safeguard our interests and the promise of full consultations. If urgency was reaching [a] stage where it might inhibit full consultations this seemed to be important enough to be the subject of further advice to Canberra at Government level.
7. Snelling (rather inconsistently with his earlier remark (para 5 above) said that it would be helpful if Mr Holt would indicate to United Kingdom Ministers relative ‘magnitudes of importance’. We replied that his (Snelling’s) previous comments on his understanding of Mr Holt’s intentions seemed to answer this question.
8. After we had completed discussion of commodity items in our brief (details sent separately) Snelling said that he would give his personal assessment of the various commodities discussed. He agreed it was on his part a probing after ‘essentiality’. He divided the commodities in three categories.
- Those that would not be greatly at risk if at all or even had improving prospects—a ‘better’ category
- Those that would be exposed to a significant risk—a ‘worse’ category
- The ‘don’t know’ category and
- ‘Can’t do’
He put in the ‘better’ category beef and veal, mutton and lamb, apples and pears, wine, eggs, honey and lead and zinc. In the ‘worse off’ category he put butter wheat canned fruit dried vine products and manufactures. Sugar was placed in the ‘Don’t know’ category because detailed discussions were still to take place later this month.
Papua New Guinea he put in the ‘can’t do’ category on the grounds that Britain didn’t seem to have the necessary relationship or standing to ask for anything. The association provisions of the Treaty of Rome he said referred only to dependent territories of members.2
Snelling summarised his views on individual commodities as follows:
9. ‘Better’ Category Items
(A) For beef and veal the demand in the world and in the EEC seems to be expanding. It already appeared to the British that UK was a residual market for Australian meat. Projections of current trends suggested that at the end of a hypothetical transitional period of about ten years Australia could be even less dependent on the British market for meat. He calculated that exports of meat to the UK constituted 2.2 per cent of all Australian exports to all destinations.
(B) On cheese: Snelling thought there was little risk provided there was no massive switch from non-cheddar to cheddar production in the EEC. If this did not occur cheese should present no problem. In any case in his estimate cheese accounted for only 0.1 per cent of total Australian exports.
(C) Apples and pears: he said that Australia seemed to be able to sell in the EEC in spite of their regulations because of influence of seasonal factors. As the British saw it the sales of Australian apples and pears in the United Kingdom market were declining as a proportion of Australian production and exports to all markets. Hence apples and pears should not present much problem.
(D) Wine, eggs and honey: he stressed that exports of these items to Britain accounted for only 0.2 per cent of total Australian exports. In all cases Australian sales in Britain were a very small proportion of total production. Australians consumed or disposed on markets other than the UK 80 or 90 per cent of wine, 90 per cent of eggs and two-thirds of honey.
(E) On lead and zinc: he considered that Australia had relatively little at risk. The preference is minute and in any case has been abandoned in the Kennedy round. CET is very small in proportion to the value of the commodities and Australia also has substantial trade outside the UK which is expanding rapidly.
10. ‘Worse Category’
(A) Butter exports to Britain accounted for 1.5 per cent of Australian exports. As he saw it there was a large surplus of butter in the Community and in the world. How far the butter industry would suffer depended on the possibility of Australia absorbing a higher proportion of butter in her own market over the hypothetical 10 year transitional period.
(B) Wheat exports to the UK he estimated accounted for 1.2 per cent of Australian total exports. Cereals other than wheat (barley, oats, sorghum and millet) were according to the British in a different position and not at risk.
(C) Canned fruit and dried vine products: exports to the UK in his estimate accounted for 1.3 per cent of Australian total exports. A high proportion of these products was marketed by Australia in the United Kingdom but the British saw that the dependence of Australia on the British market was lessening and if that trend continued in the next ten years or so the situation would improve.
(Manufactured goods. These were a problem but during the last negotiations with the EEC the Six did not hold out hope for doing anything about manufactured products beyond a transitional period. He thought that there would be no hope of obtaining anything more this time.)
11. In totalling up the figures Snelling came to the conclusion that the proportion of total Australian exports which he would put in the ‘worse’ column would come to about 4.6 per cent or 5.1 per cent (depending on clarification of statistic on manufactures). The items for the ‘better’ column came to about 4.5 or 5.3 per cent (depending on clarification of a point of uncertainty about lead statistics).
Papua New Guinea as a ‘can’t do’ was 0.6 per cent and sugar (‘don’t know’) as about 0.8 per cent.
In other words about half of the commodities discussed were ‘at risk’ and some of that risk was severe while the other half would not be seriously affected.
12. In conclusion Snelling said that the British officials would advise their Ministers to concentrate on those products which he listed as being ‘at risk’ and among them particularly on those which are likely to prove negotiable with the Six. He doubted whether the British would be able to improve on any position which had been arrived at in the last negotiations. On commodities where nothing has been achieved before the solution even now looked problematical.
13. Examining Australian exports in total and summing up the commodities discussed he would accept that the loss to Australia at the end of a transitional period would amount to about 5 or 6 per cent of Australian total exports. This however would be a ‘once and for all’ loss from trade and balance of payment point of view. Snelling compared this with the annual growth in Australian exports which was also about 5 or 6 per cent and claimed that projecting that sort of growth over a decade would make the 5 or 6 per cent one time possible loss of trade insignificant.
14. We thanked Snelling for his summary which we said we were sure would interest people at home as much as it interested us. We did not propose to review his assessment because we had already made it clear that we were not entering into the procedure of defining products in categories which implied that some products or some part of our trade did not matter. We were concerned with steps to safeguard our trade and were not very receptive to ideas on how to jettison it in bits. We hoped that if he advised his Ministers as he had indicated it could be made clear that we had not expressed any agreement with his categories or conclusions. We also asked him to recall that the information we had given in discussion and our responses to questions already indicated that our views were quite different from many of his conclusions.
15. At the end we agreed after brief discussion that we could not at the moment come to any satisfactory recommendation about the timing of a further meeting. For his part Snelling seemed to want to wait until Prime Ministers had met and also until there was time for any reaction to the possibility or acceptability to us of a ministerial level meeting after the Prime Minister’s visit. For our part we did not press for a time to be proposed because we judged you would prefer to have plenty of room to manoeuvre.
16. The details of discussions on individual commodities which we are cabling separately should give you useful background of UK attitudes and arguments as a basis for preparation of a future meeting.
1 This is outlined in Document 232.
2 On the association provisions of the Treaty of Rome see notes to Documents 123 and 143. Papua New Guinea was in the unfortunate position of being a dependent territory of a former British colony (Australia) and as such ineligible for associate status.
[NAA: A1838, 727/4/2 PART 7]