297 Burton to Hodgson

Memorandum [CANBERRA], 13 October 1943

AUSTRALIA-NEW ZEALAND RELATIONS

The Minister has indicated on a number of occasions that he believes a more effective tie-up between Australia and New Zealand might place us in a better position from a point of view of political and economic discussions with the United Kingdom and the United States.

The suggested United Kingdom-United States arrangement, as outlined by Mr. Churchill, including the giving of full citizen rights in both countries to nationals of each country, stimulates the suggestion that we might approach New Zealand in the same way.

It is suggested therefore that the following short submission be made to the Minister, the object of which would be not so much to put forward a proposal, but to seek his direction as to whether he wanted a proposal worked out in some detail.

DRAFT SUBMISSION FOR MINISTER

1. Australia and New Zealand have common interests in- (a) Obtaining security and protecting national independence.

(b) Building up secondary industries.

(c) Maintaining employment in respect of overseas conditions.

(d) Having a measure of control over sources of supply, and of important raw materials in the Pacific.

(e) Finding export markets for their major export commodities- butter, wool, meat, etc.

2. Before this war, while the two countries had these common interests and very largely a similar outlook, there was little common action on security and political matters. Moreover, they were competitors on the world markets and made no attempt to increase their bargaining power by common action.

3. Quite obviously they could, by adopting a common policy, have a greater influence in international political discussions; they would avoid overlapping in the development of secondary industries, thus providing each other with increased markets; and their economic bargaining power in relation to the world would be greatly strengthened.

4. A brief note on the Australian-New Zealand trading position is attached. [1] This indicates that our exports are such that any changes in trading relations between the two countries, provided these changes were not extended to the Empire as a whole, or made subject to most-favoured-nation treatment, could not in any way affect Australian industries. In fact, the very favourable balance of trade which we have with New Zealand, due mainly to the export of manufactured goods, indicates that we have much to gain as a result of increased trading relations with New Zealand.

5. Consideration might be given therefore to a proposal covering- (a) The adoption of a common trading policy and a common foreign policy covering defence, colonies, air bases, etc., brought about by a combined Cabinet composed of Prime Ministers, Foreign Ministers and Treasurers.

(b) Full citizen rights in both countries for nationals of each country.

(c) Freedom of movement between countries.

(d) Currency and customs union brought about over a period of time provided this would require no great changes in industrial structure.

6. Your comments on this suggestion are sought together with a direction as to whether you consider it worth while having a more detailed outline of such a proposal prepared for submission to the Government. [2]

1 On file AA:A989, 43/735/168.

2 In the course of a statement on international affairs made in the House of Representatives on 14 October Evatt announced that he proposed 'to take steps to obtain a frank exchange of views between accredited representatives of the various governments interested in the South-West Pacific'(see Commonwealth Parliamentary Debates, vol. 176, p. 575). On 16 October the External Affairs Dept suggested to Evatt that in the light of his statement conversations might be arranged in Canberra between Australian and New Zealand representatives (see memorandum on the file cited in note 1). Evatt approved and the resulting letter to Berendsen is published as Document 305.

[AA:A989, 43/735/168]