London, 10 October 1967
I am very dubious about the line proposed in Mr Audland’s minute of 9 October about the Anglo-Australian trade talks.1 I have discussed the matter with Mr Hughes2 who says he thinks Sir Richard Powell will be content to be guided by us. The matter in my view is sufficiently important for us to consult the Secretary of State, in view of the virtual certainty in my judgment that if we take the line proposed we shall have an early public row with Australia. I am, therefore, thinking of submitting a minute to the Secretary of State in the sense of the attached draft which I should like to discuss with you and the others concerned.
Secretary of State
Australia and EEC
We have to decide whether to pursue a course with the Australians which, though transparently honest, might be liable to lead to an early public row with them, or whether we should be less than 100 per cent specific about our intentions and thus perhaps paper over the cracks and avoid a row for the time being.
2. Talks, led by the Board of Trade, have been taking place in London with a team of Australian officials headed by Sir Alan Westerman who is the Permanent Secretary of Mr McEwen, the Deputy Prime Minister and the Minister of Trade. These talks are at present in suspense but are to be resumed next Monday.
3. One curious feature of the talks has been that the Australians have professed not to appreciate that in our approach to EEC we intend to seek no safeguards for Australia’s trade with us, apart from getting the best transitional arrangements we can and protecting their sugar exports until 1974. In a draft memorandum of understanding to record the result of the talks the Australians wanted to say merely that they ‘noted the expressly stated British objective of safeguarding essential Commonwealth interests’ in our negotiations with EEC. They refused to accept a British counter-passage drawing attention to the Foreign Secretary’s statement in WEU on 4 July in which Australia is not mentioned by name which has the implication that we are not going to seek more than transitional arrangements for her.3 The Australians said that the Foreign Secretary’s statement was irrelevant precisely because it did not mention Australia. Thus the Australian attitude can only be likened to that of the ostrich.
4. There are two schools of thought in Whitehall on whether next Monday we should give the Australians something in writing to the effect that beyond seeking to secure the best possible transitional arrangements no other possibilities could be envisaged which would be realistic for the UK to contemplate raising in pre-entry negotiations on behalf of Australia. These views are briefly as follows:–
(a) If we fail to make this crystal-clear in writing the Australians may later claim that we have tried to pull the wool over their eyes and to mislead them about how little we were prepared to do for them. Their ostrich-like attitude may be explained by a desire to defer having to come clean with the Australian public on the gloomy outlook for Australian exports of primary produce to Britain and it is not in our interest to allow falsely optimistic assumptions about these prospects to continue to be made in Australia. In the 1961/63 negotiations it was a favourite gambit of Mr McEwen to accuse British Ministers of bad faith in leading Australia up the garden and he may be expected, if given the chance, to pursue this tactic again.
(b) If we write to the Australians in the sort of terms proposed we put them in a position where Mr McEwen will not be able to conceal from the dairy, meat, sugar and fruit industries that they will suffer quite serious damage. These industries will then exert great pressure on Mr McEwen as leader of the Country Party to take up the cudgels with us on their behalf. The prospect will thus be of an early public row between us and Australia.
5. Although there is force to the argument at (a) above, there is to my mind even more force to that at (b). Of course the Australian officials and Mr McEwen are quite aware privately that we are only going to seek transitional arrangements for Australia. They can therefore choose to have a row with us now if they want. But it looks as though they do not want a row now and that is the reason why they do not want us to write to them in terms which they would have to admit in public if pressed and which would thus precipitate a row now.
6. I think it likely that we shall have to have a row with Australia if we are admitted to the negotiating table in Brussels and if the prospects for a successful outcome of the negotiations look good. But I think we should be open to the charge of diplomatic ineptitude if we were to precipitate a row with the Australians at the present when the outlook for even starting, let alone finishing satisfactorily, any negotiations with EEC look very dubious. The form this row would be likely to take would be barn-storming by Mr McEwen, first in Australia and then in London which he is planning to visit before the end of the year. I can hear him making a great noise about the contrast between on the one hand our public statements that we intend to enter EEC only if there are safeguards for essential Commonwealth interests and on the other an explicit statement to the effect that we do not intend to seek any long-term safeguards for Australia. Of course if Mr McEwen does take this line there is plenty that we can say in reply; the truth of the matter is that, though a few individual Australian industries will suffer harm if we enter EEC, the damage to the booming Australian economy as a whole will not be at all severe. When Mr Holt was here in the summer he as good as said to the Prime Minister that Australia would be protesting only for the record.4 But there could still be much sound and fury which it would be silly of us to invite while the prospects for our entry into EEC are so uncertain.
7. I have discussed all this with Mr Hughes of the Board of Trade who tells me he believes Sir Richard Powell will be content to be guided by us in this matter and has no desire himself to precipitate a clash with the Australians. My recommendation is accordingly that we ask the Board of Trade not to put anything in writing on this subject to Sir Alan Westerman, unless the latter asks for it, in which case he should be told that a Ministerial decision will be sought on the whole of the outcome of the talks, but in the meantime it seems unlikely that British Ministers will change their views about what to seek on Australia’s behalf.
8. If ever the Australians do accuse us of having misled them, we can point not only to the negative implications of Mr Brown’s WEU statement but also to your own words in your speech to the Commonwealth Correspondents’ Association on 27 September when you said: ’For those Commonwealth exports not covered by these safeguards [i.e. associations, comprehensive trade agreements, etc] we would expect that the application of Community tariffs and levies would be phased over a transitional period, the length of which would of course be the subject of negotiations. Now that is the general approach we make to the problem of essential Commonwealth interests.’ The attention of the Australians has been drawn orally to these words and that should suffice for the time being. They will also since have seen the report of the Brussels Commission to the EEC Council which makes it clear that the Commission have understood us to be asking for no more than transitional arrangements for Australia. 5
1 Document 227.
2 Bill Hughes, Second Secretary, Board of Trade.
3 George Brown’s WEU address appears in extract in Document 262.
4 Document 235.
5 Gamer forwarded the minute to George Thomson on 12 October with his personal endorsement: ‘I agree strongly with Sir A Snelling’s conclusion. We may be faced with a public row with Australia in due course, but it would be far better that this should appear to take place as a result of pressure on us in successful negotiations to join Europe, rather than that we should appear to be throwing our cards away in advance when there is no certainty that we shall succeed (and indeed may want all the co-operation from Australia that we can get).’ Thomson recorded ‘I agree’ in the margin. Thomson had moved to the position of Secretary of State for Commonwealth Affairs on 29 August 1967 (UKNA: FCO 20/54, Garner to Thompson).
[UKNA: FCO 20/54]