London, 15 June 1971
7856. Confidential
The following is the text of a Prime Minister to Prime Minister message which Mr McMahon wishes you to have delivered today to Mr Heath:
Begins
The Australian Government has followed with concern the reported developments in the negotiations between the United Kingdom and the member states of the EEC.
You will be aware of the importance for Australian trade of the conditions of entry and the problems which will be caused to our industries which have been drawn to the attention of the British Government and Ministers on a number of occasions.
The Australian Government has sought not to raise obstacles which would impede the successful course of your negotiations.
In taking this decision we have accepted that there may be some dislocation of the established trading and production patterns of some Australian industries and we recognise that we may have to take some measures to assist Australian industries to adjust to the changed conditions of world trade.
Such adjustments will of course require time.
I am informed that my responsible Ministers and officials had been led to believe that the problems which would be caused to our industries would be very much in the minds of the British negotiators and would be raised in the negotiations with a view to minimising the disturbance to our trade and ensuring that there would be a reasonable transitional period.
The purpose of the transitional period, we were told, would be twofold.
First, to allow time for the British system of agricultural protection to be aligned with the system of the Community, and second to allow Australia (and countries like us) time to make the necessary adjustments consequent upon whatever loss of markets we may suffer.
During his visit to Australia Mr Rippon placed special emphasis on this concept of a transitional period and said it was what he would be seeking in order to safeguard the Australian position.1
The arrangements accepted by the British Government at the May negotiations, as we understand them, would involve the full application of Community preference to products covered by the Common Agricultural Policy from the date of British entry.
This means that the transitional period would have relevance only to the alignment of British policies with Community policies and would not comply with the understanding the Australian Government was given of the type of transition period the British Government would be seeking.
This arrangement would create severe difficulties for some Australian industries, particularly the dairy industry, whose exports of butter and cheese face possible exclusion from the British market immediately upon Britain’s entry.
In our view the reported general intention of the parties to the negotiation to consider action to ameliorate damage when it can be shown that trade is being seriously disrupted by the arrangements they have made does not offer sufficient protection to the Australian position.
The Australian Government therefore requests the British Government to seek during the currency of the present negotiations the establishment of firm and predictable arrangements for access of Australian products to the British market for a transitional period of sufficient duration to allow Australia time to make the necessary adjustments consequent upon whatever loss of markets we may suffer. 2
1 Document 270.
2 Heath’s reply to McMahon is Document 292.
[NAA: Al838, 727/4/2 PART 14]