British High Commission, Canberra, 26 June 1967
984. Confidential
Australia and the EEC
Westerman had lunch with Minister (Commercial) today. Rooke queried reason for instructions given to Australian Delegation not to discuss question of essentiality of any of Australia’s exports to Britain. Westerman replied that it could be politically embarrassing for the Australian Government to assign relative degrees of priority to individual export items […] He argued that there was no parallel with New Zealand, given the much wider range of Australian exports to Britain. Moreover he did not believe that there was any reasonable prospect of the United Kingdom securing any safeguards for Australian ‘essential interests’ (Westerman repeatedly registered his objections to this term) merely because it was to Australia’s advantage: the only basis for any agreement was mutual self-interest as between the enlarged Common Market and Australia. On this basis it might be possible to reach an arrangement which would go beyond the transitional.
2. Rooke asked him to be rather more explicit. Westerman suggested that British and Australian officials might give some thought to the benefits which each country would wish to retain in the other’s market and then to advise on means as to how this could be achieved. One possible line of approach would be exchange of preferential quotas between Australia and the enlarged EEC. In return for duty free or levy free quotas for the entry of Australian products into the enlarged EEC, Australia might retain British preferences in the Australian market up to an agreed quota level for selected items and make these preferential duty quotas available to all member countries of the enlarged community. Westerman emphasised that any quota arrangements for EEC imports from Australia would have to be compatible with the common agricultural policy and presented in a manner likely to be acceptable to the community. If the preferential duty quotas for EEC imports into Australia were fixed at a level which did not exceed existing British trade for these same items, it could be argued that the no new preference rule under GATT had not been infringed. Any arrangements which might be made bilaterally between Britain and Australia on these lines could be embodied in a new trade agreement, the terms of which would be extended to the EEC as soon as Britain became a member.
3. Rooke said that for obvious reasons he would prefer not to comment on the substance of these suggestions at this stage. The question at issue was how to get discussions going along these lines, assuming that we were prepared to accept Westerman’s suggestions as a basis. It was finally agreed that Westerman would put forward his proposals in a personal letter to Powell1 and that he himself would follow this up with a visit to London for a personal discussion if this were thought necessary. If agreement were reached in principle, detailed negotiations could continue at official level.
It is clear that for a number of reasons Australia is not prepared to enter into the kind of discussions on essential interests which we had envisaged. This is no doubt partly because of the political difficulties mentioned above and partly because the Australians are well aware that any safeguards which we might obtain are unlikely to go beyond transitional arrangements whereas for certain sensitive items (Westerman mentioned specifically butter, sugar and canned fruit) the Australians see no prospect of finding alternative markets and are therefore seeking permanent arrangements with the EEC. Moreover, by bringing us into a joint elaboration of trading arrangements as suggested by Westerman, the Australians doubtless feel that they would be able to avoid shouldering the sole responsibility for identifying their essential interests. Westerman insisted repeatedly that Australia did not wish to be put in the position of a ‘demandeur’ and that the benefits deriving from any arrangement we might reach must be mutual. For this reason both sides would have to give considerable thought to the problem before any official discussion could take place. He saw no possibility of holding these discussions before September or October.
1 Richard Powell, Permanent Secretary of the Board of Trade.
[UKNA: FCO 20/50]