Canberra, 12 October 1967
Confidential
United Kingdom/Australia Trade Discussions
[…]
2. Ministers will recall that in my discussions earlier this year with Mr Jay, then President of the Board of Trade, it was agreed that officials should meet as soon as possible after the conclusion of the Kennedy Round to assess the scope for negotiating a balanced agreement. The major purpose of these latest discussions was therefore to give effect to that arrangement and sort out where we were in our trade agreement with Britain following the Kennedy Round and the expiration of the 15 Year Meat Agreement. We also had in mind that we might be able to explore with Britain possible safeguards for Australian exports in the light of Britain’s application for entry into the EEC.
3. The talks started in London on 20th September between Sir Alan Westerman and Sir Richard Powell (Permanent Secretary of the UK Board of Trade). It was apparent from the very beginning that, in the light of the British application to join the European Economic Community, the British officials were distinctly uncomfortable about engaging with Australia, as a non-EEC country, in any trade discussions at all at this time. They were most concerned that they should not give any impression of arranging a ‘hedge’ against the possibility that their application for entry into the Common Market was unsuccessful. They were also anxious to do nothing that might be construed in Europe as evidence of British reservations about membership of the EEC.
4. However, in spite of their nervousness the British did engage in discussions and agreed to look at the possibility of recording some kind of agreed conclusions from the discussions, provided the record of those conclusions remained confidential.
5. Initially it seemed that a Memorandum of Understanding might be agreed that would be helpful to both countries. However, as discussions have proceeded, it has become apparent that there is little or no prospect of the two delegations agreeing a paper that would advantage us in our trade relationship with Britain or help us in negotiating safeguards for Australian products in the event of British entry into the EEC.
6. Moreover, the British side have shown little enthusiasm to even take on board suggestions we might make to reciprocate for any benefits gained now or retained if Britain enters the EEC. Worse, the latest language put forward in British drafts would virtually mean either directly or by implication that we accepted that Britain need seek no safeguards, other than ‘transitional arrangements’ for Australia’s exports during her negotiation for entry.
7. In short, Britain is so determined to maintain a position of willingness, even anxiety, to join the EEC that she will take no action at this stage that might appear as the slightest contradiction of that position.
8. am satisfied that there is little prospect of agreement on a Memorandum of Understanding that would have any value for us. I am therefore instructing Sir Alan Westerman that, unless he can obtain something constructively satisfactory and protective to our interests in his final talks with Sir Richard Powell, set down for October 16th, he should close his discussions as soon as possible. I would not expect that there would be any formal record of discussions. The continuance of our Trade Treaty with the United Kingdom remains untouched. In the absence of any agreed modifications to the treaty it remains in force in terms of the exchange of letters of 1962 modified only to the extent of tariff changes resulting from the Kennedy Round negotiations.
9. The effect will be that the United Kingdom/Australia Trade Agreement will continue, as at present, subject to six months’ notice of termination on either side. The 15 Year Meat Agreement expired on 30 September 1967, so that our meat trade with Britain will no longer be governed by a separate agreement. The Meat Agreement terms of access are now replaced by the terms of access in the Trade Agreement. The Trade Agreement guarantees Australia duty free access to Britain, although not the quota free access of the Meat Agreement. In addition, the Trade Agreement preserves the old Ottawa Agreement meat preferences. Whilst the exact nature of the Ottawa provisions (which in the circumstances of the 1930’s had envisaged quota preferences) has never been tested it is clear that they provide for preferential treatment.
10. This final result of the talks is not completely unexpected. In my previous submission I foreshadowed that Britain might be unwilling to declare her position in any definite terms.
11. On the important issue of the British application for entry into the EEC Ministers should be aware that British officials have clarified the British position regarding safeguards for Commonwealth interests. In the words of a senior British official ‘for developed countries other than New Zealand all that is in mind is a transitional period and nothing else’.
12. Whilst this statement cannot be publicly quoted having been delivered in the course of confidential discussions it is nevertheless an important explicit statement of what has been implicit in some earlier statements by British Ministers, notably up until now the major speech by the British Foreign Secretary to the Western European Union.
13. Moreover, British officials have drawn our attention to a recent speech by the British Commonwealth Secretary in which it is made abundantly clear that the only ‘safeguards’ Britain will seek for Australia for all products except sugar, is a transitional period during which all our existing preferences would be phased out. For sugar the British accept that they have a contractual obligation up to 1974 but no further.
14. This clear understanding that we have now gained about Britain’s conception of the extent of ‘safeguards’ necessary for Australia will, of course, have to be communicated to the Australian public. I shall be giving a good deal of attention to this question in the course of the next few weeks.
[NAA: A 10206, EHEC03]