London, 2 July 1971
218. Confidential
Thank you for your message, which Alick Downer sent to me on 15 June, 1 setting out your views on aspects of our proposed entry into the European Community which concern Australia. I have now also had from Geoffrey Rippon, John Davies2 and James Prior3 full accounts of their discussions with Douglas Anthony.
Your main concern is about the transitional arrangements for agriculture. You say that the arrangements which have been negotiated are not what you expected, and in particular do not give adequate protection for your butter and cheese exports during the transitional period. In short, you do not think that we have done enough to secure Australian interests in this respect.
From the outset of the negotiations, we have stressed to the Community how third countries, and particularly Australia, might have to make large changes in their traditional pattern of agricultural exchange with Britain as a result of British adoption of the Common Agricultural Policy: and that it was important that they should have the opportunity to make these changes in an orderly way. The transitional arrangements we have agreed, make up what we believe to be a satisfactory package from this point of view. First, the transition to Community price levels, which will affect production and consumption in the United Kingdom—and thus outlets for third countries—will be evenly spread over five years. Secondly, for products subject only to tariffs there will similarly be a gradual programme of adjustments over five years.
As regards products subject to levies—the products of greatest interest to Australia—it became clear that we should have to apply the principle of the Community system, including Community preference, from the start. The fact that we have agreed to the application of Community preference in full from the beginning does not make the position of third countries significantly worse compared to an arrangement under which the preference was gradually phased in. Thus for products on which levies would be imposed, Community preference would be of importance only where the enlarged Community was in surplus, and in such a situation any degree of Community preference would tend to exclude third country supplies. At the same time, in agreeing to the principle of Community preference from the start, we secured from the Community a comprehensive general undertaking, whose terms have been explained to your High Commissioner and of which the details are set out in an annex to this message.
I believe that this is a satisfactory arrangement which is capable of being translated into effective action if the need should arise. I am sure that by pressing for and obtaining this general assurance we have secured better terms for Australia than we could have obtained by seeking to negotiate specific quantitative guarantees. Even had the Community agreed to the latter approach, we should have been unlikely to achieve other than low quantity levels. To seek to reopen this now would not be possible, and could throw doubt on the value of the Community’s undertaking.
During his official visit to Britain, Douglas Anthony made a number of public statements in which he severely criticised us for the arrangements we have made. In private he also criticised us for lack of consultation with your representatives. As I have explained above, we believe that we have secured protection for Australian interests and we do not agree that the comprehensive undertaking we have obtained from the Community is inconsistent with our original negotiating objectives.
With regard to consultation, your representatives were kept fully posted throughout. They were briefed both in Brussels and London immediately after each of the nine ministerial meetings of the negotiating conference and in Brussels after each of the twenty-three meetings of deputies. After the meeting of deputies on 21–22 April and before we reached agreement on 12 May on the text I have enclosed, Sir Con O’Neill explained the lines on which we were thinking of dealing with the Community’s approach to agricultural transition. Geoffrey Rippon himself has always been available to Commonwealth High Commissioners, and has been very glad to discuss any matters they wished to raise.
I really must urge you that it is not to anyone’s advantage to belittle what has been undertaken by the Community. For our part, we shall be very ready to discuss with you at the appropriate time any specific measures which may be needed to protect particular Australian agricultural interests.
Annex:
In the negotiations in Brussels on 12 May 1971, the Chancellor of the Duchy of Lancaster made the following statement, which followed detailed exchanges with the Community:
[ see text quoted in Document 287 ]
It was on the basis of this understanding that the British delegation were able to accept the Community’s proposals for agricultural transition. The Community agreed that the examination of specific cases would be undertaken by the institutions of the enlarged Community in the light of all the relevant factors: and that such measures as might need to be taken by the Community Institutions during the transitional period with a view to finding solutions to problems which might arise in certain specific cases in the field of trade, would be taken in accordance with the principles, and within the framework, of the Common Agricultural Policy.
1 Document 283.
2 Secretary of State for Trade and Industry, 1970–72.
3 Minister for Agriculture, Fisheries and Food, 1970–72.
[UKNA: PREM 15/367]