Canberra, 8 July 1971
Confidential
After initial courtesies, Mr Anthony remarked that ‘in agricultural politics, nobody loves anybody’. It was a pity, he added, that the British Government had not tried harder to obtain specific measures of protection for threatened Australian products, since if we had done so, then blame for the inevitable failure of our efforts could have been put on the Six.
2. When I pointed out that we had in fact sought to obtain from the Community arrangements for the orderly phasing out of third countries’ supplies of butter, sugar, cheese and bacon to the UK, but had satisfied ourselves that they were unobtainable, Mr Anthony replied that he knew the detail of what had happened as well if not better than I did. He did not wish to enter into an argument with me on the subject, but wished to state that in the direct contacts which he himself had made with the Six before his visit to Britain, he had learnt that we had made virtually no effort. When he explained to the Six the degree of damage likely to be caused to Australia, they had expressed polite surprise, saying that they had been given no idea of this by the British.
3. I told Mr Anthony that, according to public statements by the Australian producers themselves, there seemed to be room for very different opinions about the extent and nature of the damage which British entry into the EEC might cause here. For example, the General Manager of the Murray Goulburn Co-operative Company Limited (Australia’s largest manufacturing dairy company), had just said publicly that many sections of the Australian dairy industry were jumping at shadows over British admission to the Common Market; that a decade of butter shortage might be about to follow the last decade of surplus; and that the enlarged Community’s import requirements of butter might be such that Brussels would ‘decide to reduce the Community tariff to a level which would enable the Australians and others to obtain a reasonable price for their products.’ Mr Anthony said that the Murray Goulburn concern was an extremely efficient one, which could look after itself. He had to think about the many less efficient small producers. Moreover, he believed in facing inevitable facts, however gloomy, and had based his whole political career on doing so. If Australia was to take the necessary steps to diversify her production in time, it would be necessary to make the primary producers concerned think, and the only way to do this was to alarm them.
4. I said that I realised Mr Anthony was not happy about the terms we had obtained, but nevertheless both Australia and we had to accept the situation as it was. That meant that if and when disruption was threatened, we should now need to invoke the general fall-back assurance which we had secured from the EEC, guaranteeing speedy and effective action by the enlarged Community to deal with any abrupt dislocation of trade in agricultural products. Surely, therefore, the sensible course now was to play this guarantee up rather than down. Every time it was presented as a worthless undertaking it in fact became worth a little less. I thought it would pay Australia henceforward to emphasise the importance which she attached to the guarantee, rather than decry it. Mr Anthony said he agreed with this.
5. I then added that given the evident impossibility of framing any precise assessment at this stage of what damage would actually result, it seemed positively preferable to have a general guarantee rather than protection for specific amounts of specific products. The advantage of the general assurance was that it was extremely flexible.
6. Mr Anthony made no attempt to answer this point but instead launched out into a description of the difficulty which he foresaw over disposing of Australian butter if there were now to be a good year for butter production in Europe. By mid-1972, it would be possible to see the trend, and it could well be profoundly adverse.
7. On sugar, Mr Anthony said that Australia stood to lose more than any other country by British entry into the EEC. There would be no problem about selling Australian sugar if the ISA collapsed and a free-for-all took its place, since Australian producers were among the world’s most efficient. But if this were not to happen, ‘room must be made for us’. The real problem was beet sugar production in the EEC itself. The EEC, he thought, had followed a thoroughly bad neighbour policy in relation to sugar and had thus got itself a bad name. He did not think we had much chance of settling the matter after 1974 in the way we apparently hoped.
8. Mr Anthony then referred to Mr Rippon’s recent statement in the House of Commons that the Australian Government had always understood and supported Britain’s application to join the EEC. This was not the case, Mr Anthony said, and he felt strongly tempted to issue a statement denying it. However to do so might create the equally unjustified opposing impression that Australia was root and branch against British membership of the EEC. In reply to a question, Mr Anthony acknowledged that, if he were British, he would vote for our entry .into the Common Market; but said he would do this on political not economic grounds, since to his mind, the economic case for our entry had not been made out.
9. At the end of our talk, Mr Anthony, who had been personally very friendly throughout, said that he realised I had my job to do, just as he had his, and that he would co-operate with me to the maximum extent that he could. He hoped we could work closely together despite differences of approach. I said I hoped so too.
[UKNA: FCO 24/1055]