NAA: A1838, 727/4/2 PART 1

Canberra, 30 May 1961

Secret

We have followed with great interest the reports of the Commons Debates and the related press speculation on the United Kingdom and the European Economic Community, and I therefore found your messages of 15th April and 17th May most helpful.¹

What I write in this message will, for the most part, have particular application to the commercial policy side of the question, but before I come to that I want to make a special reference to the political side. This, at least as much as the trade aspects, and conceivably even more, requires the very closest advance study.

That there must be important political results affecting the United Kingdom, and therefore affecting members of the Commonwealth, if the United Kingdom were to join the Treaty of Rome seems to me to go without saying, even after allowing for the various possible qualifications which could accompany signature. Political results, after all, would be part of the whole purpose, as we both know. It would be for political unity within Europe, every bit as much as for economic unity, that the United Kingdom would be joining. Further, the interest of the new United States Administration, which you specially mentioned to me after your recent visit, is obviously to be explained in terms of political policy.

This leads me to say that I hope we could have the closest possible examination of all that must be involved politically within the Commonwealth if the United Kingdom were to join the European Six in the Treaty of Rome. Your European partners would require obligations of you in respect of world political and strategic problems and in respect of United Kingdom decisions on these matters. What, in these circumstances, will be the United Kingdom outlook towards Australia, towards Canada, towards the Commonwealth collectively? I need hardly say that we, like you, must examine the prospect of our future associations in the strategic and economic context in which Australia is placed. The depth of Australia's relationship with the United Kingdom in the face of threat or danger to either has never been susceptible to explanation merely in terms of institutions. We would, of course, want to sustain this relationship. But it may not be possible to do that. There may need to be modifications. As you already know, my colleagues and I have always acknowledged the advantages of the removal of divisions within Europe and, conversely, the risks of allowing divisions to develop. But if the United Kingdom were to join the Treaty, such political integration with Europe may mean that you and we and the rest of the Commonwealth could be up against a fundamental change in our relationships. It is this which seems to need our consideration.

As to the commercial policy side, I note that you were actively pursuing the question of possible United Kingdom membership of the Community on the understanding that special arrangements must necessarily be made to take care of Commonwealth interests, British agriculture and the interests of other EFTA members who could not follow the United Kingdom into the Community. I am grateful to have your further assurance on the matter of Commonwealth interests and also that you will consult with us again when you have finished your own examination in the United Kingdom and before you reach any decision.

As I emphasized during the special meeting with Selwyn Lloyd in London in March,² we attach great importance to full discussions between Australia and the United Kingdom before there is any crystallisation of ideas for arriving at a settlement between Six and Seven, so that we can both understand the possibilities being considered and so that Australia's essential interests are fully understood.

In your earlier message of 15th April³ you spoke of some unavoidable economic disadvantages both for the United Kingdom itself and for other Commonwealth countries and the need for weighing those against the great political advantage of avoiding further division of Europe. You also put the point that a stronger United Kingdom associated with the Six–and a wider European market–might turn out to be the alternative to a United Kingdom of declining economic strength even though with present Commonwealth trading arrangements fully maintained.

On the economic side, association between the United Kingdom and the Six may hold advantages for certain commodities in our export trade, e.g., wool and metals. But there is little likelihood of such an association providing any practical compensation in respect of our major food exports to Britain unless agricultural policies of the Six or of the new grouping are so framed as to give adequate opportunities for our trade in these products. We do not know the range of possibilities embraced in your thinking on this point, and therefore whether it would be possible to devise arrangements which would safeguard our interests. You will understand my saying frankly that an association between the United Kingdom and the Six that included agriculture could, if the bases of negotiation did not safeguard against it, result in an unbearable burden on much of our export trade with very serious consequences for our domestic economy, our balance of payments and our total trade patterns.

On this, however, your assurance to take care of Commonwealth interests, as a condition for joining the Community encourages me to believe that whatever changes in existing arrangements might be judged to be necessary, would be no greater than we would regard as manageable for us in negotiations. I have also read this same sense in your observation that you particularly do not wish to embark upon a negotiation with all the attendant risks without the likelihood of a successful outcome.

[matter omitted]

1 Documents 128 and 132.

2 Document 127.

3 Document 128.