London, 12 June 1967
Confidential
Visit of the Australian Prime Minister to London, June 1967
Mr Holt is not coming to London primarily to discuss EEC questions; he is likely to be more interested in defence and finance than in the Common Market. The Permanent Secretary of the Australian Prime Minister’s Department recently confirmed to our High Commissioner in Canberra that Mr Holt is not proposing to have detailed discussions about our application to join the EEC; he would probably say something on the subject, but only enough to show that he was not indifferent. The talking points at Annex A have been prepared on this hypothesis; background material is at Annex B.1
2. Consultations on Common Market questions are, however, to be held with Australian officials during the preceding week, beginning on 7 June; and talks with Mr Marshall, the Deputy Prime Minister of New Zealand, will be going on at the same time. It is possible that, as a result of what he hears about these talks, Mr Holt may conclude that the prospects for Australia in the context of our EEC negotiations are gloomier than he has so far supposed. This would not necessarily cause him to alter his tactics materially. He leans heavily on Mr McEwen for advice on all trade matters, and he might prefer to leave over a definitive reaction to the official level talks until he has had an opportunity of discussing them with him. But there is always a possibility that Mr Holt will himself decide to take matters up in greater detail with the Prime Minister. […]
3. On either hypothesis about Mr Holt’s attitude, certain considerations are relevant to our own. As in the case of the New Zealanders, our aim in the current round of discussion with the Australians at official level has been to explore the Australian interests involved; but to avoid agreeing with them the line we would adopt with the Six. It is suggested that the aim in talks with Mr Holt might be similar. But it is important not to mislead him. He should be told that while we would prepared to consider any special problems which Australia wished to put to us, we could not hope to secure from the Six on behalf of Australia anything better than transitional arrangements. The British High Commissioner in Canberra has reported that Australian Ministers have already deduced that the most they can hope for is a fairly lengthy transitional period to enable them to adjust the pattern of Australian exports. It must already be clear to them that our trade with Australia is likely to decline, at least in relative terms, whether or not we join the Community; but the decline will be accelerated if we do. Whilst the underlying attitude of the Australian Government may, therefore, be realistic, domestic political considerations may lead them to strike a different attitude in public and to criticise the line we are likely to have to take in negotiations with the Six. The present talks may provide an opportunity for seeking to deflect Mr Holt from proceeding in that way. The Prime Minister will, however, wish to bear in mind that the effect on Australia of our application to join the EEC is not the only point being discussed with Mr Holt on which the Australian Government are likely to be sensitive. The way in which the foregoing points are best deployed to him will no doubt depend on how discussions with him go on such matters as Far East defence and on financial questions.
4. It would be a mistake to mention the subject of sugar to Mr Holt. The future of the Commonwealth Sugar Agreement is to be discussed at a Conference of Commonwealth Sugar-producing countries beginning here on 19th June, to which Australia has been invited. At that Conference we shall be suggesting, subject to Ministerial clearance in the meanwhile, that after the Commonwealth Sugar Agreement expires in 1974 there will be no possibility of any safeguard for Australian sugar interests in our market, although we may be able to do something for the less developed producers. If the Australians learned before the Commonwealth sugar talks that this would be our approach it would give them an opportunity to mobilise opinion against us. The Prime Minister might therefore respond to any question about sugar by indicating that the subject was better left for discussion at the Conference.
1 See UKNA: CAB 133/329.
[UKNA: CAB 133/329]