Stresses in the Ottawa System

Abstract

As Macmillan indicates, a turning point had been reached in Commonwealth economic affairs by 1956. Relations with Australia had cooled, and the future of Commonwealth Preference was in doubt. In subsequent years, Britain was increasingly drawn into the orbit of the EEC, which appeared to offer better opportunities for industrial exports. This chapter examines the reasons for the growing commercial estrangement of Britain and Australia and New Zealand. Chapters 7 and 8 consider Britain’s attempts to reach a commercial settlement with western Europe.

Australia’s changed attitude to the preference system reflected the fact that the United Kingdom was no longer able to fulfil her traditional role of providing the capital needed for the industrial [sic] development of the Commonwealth… . The preferences were still of great value to us and it was important that we should retain what preferences we could. It would now be necessary, however, to re-examine, in the light of the Australian attitude, the relative importance and future prospects of our trade with Australia and the Commonwealth, and with Europe and other overseas markets.

Harold Macmillan, Chancellor of the Exchequer, 1956 ¹