London, 12 October 1967
Confidential
Anglo-Australian Trade Talks
I would like to offer the following comments on the draft minute to the Secretary of State circulated under cover of Sir A. Snelling’s minute of 10 October. 1
2. I believe that (a) seriously understates the case in favour of some plain speaking. We should not forget that, in the last negotiations, the Australians (as they do today) consistently took the line that we could get a lot more for them than was really negotiable. Our failure to contradict them from the start laid us open to later charges that we were doing far less than we had undertaken. Such charges were made by Mr McEwen. But however we may assess the chances of the Australians bringing charges of bad faith this time, it seems to me that such charges would be so very damaging if brought in a position where they could be sustained. We are in that position now. The Foreign Secretary’s statement of 4 July was not very explicit on the point at issue, and we have made no formal or semi-formal communication to the Australians to make matters plain. If we fail to use the current talks with the Australians, which are explicitly concerned with the safeguarding of essential Australian interests in the context of our joining the EEC, as an opportunity to make the position clear in writing, then I think the Australians could justifiably claim afterwards that our behaviour tended to confirm them in their own view of affairs. I do not see how we can rest upon the Secretary of State’s talk to the Commonwealth Correspondents’ Association, unless we draw the text rather more formally to the attention of the Australians; so far as we know this part of the Secretary of State’s speech did not in fact attract press coverage.
3. Equally, l believe that (b) overstates the case for letting sleeping dogs lie. Mr Holt made it pretty clear to the Prime Minister last June that he realised that Australian interests would have to suffer if we joined the Community. The only person likely to make a furore is Mr McEwen and his position is growing weaker. The Australian public is, I believe, far ahead of the Australian Government in accepting that changes would be inevitable. As you will probably remember the British High Commissioner in Canberra reported some months ago that the underlying attitude of Australian Ministers, as opposed to what they said in public, is realistic.2 He said that they were under no illusion that they could stretch the definition of their essential interests as widely as they had six years ago and that they had deduced that the most they could expect was a fairly lengthy transitional period to enable them to adjust the pattern of exports.
4. As regards the paragraph following (b), where there is discussion of a possible expansion of Commonwealth trade if we fail to enter the Community, we know that the Prime Minister is not thinking in terms of any major reliance of the Commonwealth in such circumstances. That is not to say that we should not wish to sustain our trade with Australia as best we might. Plainly we should; but it seems very questionable whether our prospects of doing business with Australia would be seriously impaired by our attitude on Common Market matters. In the first place, they are well aware of what our entry implies even if they do not themselves admit it. Despite all the tough words with the Australians in the 1961–63, and they were of course infinitely tougher than anything we might encounter now, we were able to pick up the threads of trade with them afterwards without difficulty. Our trading arrangements with Australia are the outcome of a hard headed bargain and they will continue to be so.
5. I should add that the view of our Commercial Minister in Canberra,3 who has been attending the talks with Sir Alan Westerman is that we should be well advised to speak plainly.
1 Document 238.
2 Document 231.
3 Rooke.
[UKNA: FCO 20/54]