Australia and the OECD: Argument, persuasion and accession

Page 36 

Australia’s Deputy Prime Minister Doug Anthony signs the accession agreement to the OECD, with US Secretary of State William P. Rogers and OECD Secretary-General Emile Van Lennep © Sabine Weiss

Australia is not a founding member of the OECD, which was created in 1961. Rather, its decision to seek membership was only taken after ten years of intermittent debate.

The Australian Treasury and, more cautiously, its Department of External Affairs (DEA) pushed hard for Australia to apply to join the OECD from the outset. But prudence reigned, as some worried that membership, at least for the foreseeable future, would damage Australia’s best interests, especially as regards trade. After all, Australia enjoyed good support among developing countries in the General Agreement on Tariffs and Trade (GATT) in the push for greater access for agricultural products to OECD markets, which joining the “rich country club” might endanger. Opponents also felt that Australia’s own protectionist economic policies did not square with the OECD’s support for freer international trade.

Nor was Robert Gordon Menzies, then prime minister, initially enthusiastic about OECD membership. Certainly, the advice and the influential views of John “Black Jack” McEwen, his deputy prime minister and the leader of the Country Party, as well as McEwen’s Department of Trade, led him not to rush in. In 1960, for example, the cabinet had agreed with McEwen’s view that the time had not yet been reached for Australian membership of the OECD. Australia’s hesitation was further fuelled by the British announcement of its decision to apply for membership of the European Economic Community (EEC), which it filed in 1961. This came as a great shock to the Menzies government. The DEA warned that with British membership of the EEC the Commonwealth was likely to decline and eventually disappear.


But it also implied a need to reconsider the extent to which the British representation of Australian interests in organisations such as the newly formed OECD, as well as within the EEC, could be relied upon, should its European application be successful. Such reconsideration might have suggested that one way of minimising the dependence on British representation would precisely be for Australia to gain membership of the OECD, but this was not proposed at this time.

On 21 February 1963 the prime minister was informed that the Japanese government was keen to gain full membership of the OECD and that there might be an opportunity for Australia to apply. Suddenly, there were clearer political and economic advantages for Australian membership too. But McEwen and the Department of Trade still opposed OECD membership, arguing that Australia had to prioritise membership of the Economic Commission for Asia and the Far East (ECAFE) region in the UN General Assembly and not jeopardise its relations with Southeast Asian countries, especially in the context of GATT negotiations over agriculture. However, McEwen had already done much to support closer Australian trade relations with Japan, and his opposition to OECD membership would later soften somewhat.

Five main advantages


From 1964 to 1965 the DEA, with Treasury support, again initiated moves to win cabinet backing for OECD membership. Five main advantages of membership were put forward. The first was that it would ensure that Australia’s interests would be considered in the “principal Western forum where international financial and economic matters of high importance to us are now discussed”.

The second was the value of membership of the Development Assistance Committee, described as “one of the most effective activities of the OECD”, membership of which would help “make the Australian aid effort better known”.

The third argument in favour was that membership would provide valuable access to OECD work in a range of areas, notably science policy and agriculture.

The fourth was the opportunity membership would provide for helping to turn Australia into an “insider”, in what it was felt was becoming an increasingly institutionalised global environment for the conduct of economic and political relationships.

The fifth advantage was trade, and the opportunity membership of the OECD’s Trade Committee would bring.

“Australia will only join the OECD over my dead
body”: John McEwen, quoted in 1968, seen here
at the 1967 OECD ministerial meeting with
Deputy Prime Minister John R Marshall, Minister
of Overseas Trade, New Zealand
©Sabine Weiss

Still the government chiefs remained unconvinced, though they agreed to seek membership of the DAC and to leave open the question of an application for full membership. A successful bid for membership of the DAC was made in 1965, following the cabinet decision, with Australia taking up membership in 1966; it was no coincidence that Japan initially had joined the DAC before joining the OECD in 1964, a fact of which Australian officials were well aware.

By 1968 McEwen was still holding a hard line, telling Philip Flood, Australia’s representative on the DAC, that “Australia will only join the OECD over my dead body”. However, Treasury and the DEA, with the backing of their ministers, successfully pressed for a reconsideration of the merits of OECD membership in 1969, stressing the valuable learning experience that DAC had provided. With Menzies having retired in 1966, Black Jack had lost a vital ally and, in addition, his officials were now advising, though cautiously, in favour of OECD membership. Hence, while he would not support membership, he would not oppose it either. This was a step forward, and moves for an application commenced.

US caution


However, now that Australia had overcome its internal divisions and made up its mind to join the OECD, would the OECD itself agree to its membership?

As it happened, all OECD members proved to be immediately supportive, except the United States, the organisation’s largest member country. US officials cited several reservations, which all boiled down to concerns that an Australian application would open a floodgate of other, far more sensitive, applications from countries whose like-mindedness and development levels were in question. Intensive Australian lobbying commenced, supported by the British government, and the United States was soon won over. Formal discussions as to the terms and conditions of Australian membership commenced in July 1970. The OECD Council invited the Australian government to join on 24 May the following year, and on 7 June 1971 Australia formally became a member country of the OECD.

Australia would provide the OECD with a member that had increasingly strong links with countries in Southeast and East Asia, particularly Japan, and that from the onset pressed strongly for the OECD to develop greater links with countries in the area, notably China. It played an important role, for example, in supporting Korea’s successful accession to the OECD in 1996, and in promoting strong and continuing ties with Asia-Pacific Economic Cooperation (APEC). Combined with its membership of the G20, Australia is now established as an important bridge between the OECD and Asia at a time when new markets in the region could benefit from the organisation’s support and know-how.


Professor Carroll is currently completing work on two books, Australia and the OECD, and Global Health Governance and the OECD, publication expected in 2015. He can be contacted at Peter.Carroll@utas.edu.au


References


Flood, P, 2011. Dancing with Warriors: A Diplomatic Memoir, North Melbourne, Victoria, Arcadia.

National Archives of Australia (NAA), 1960a, “Organisation for Economic Co-operation and Development”, Outward Cablegram, 12 May 1960, For Crawford from Trade, A987/4.

NAA, 1960b, Cabinet Decision No 615, 4 February 1960, A3092.

NAA, 1961, “Bunting to Menzies”, 7 July 1961, A4940/1, C3368 Pt 2.

NAA, 1963a, “Notes of Meetings”, p. 28 of Secretary Bunting’s notes on Cabinet Meetings, 27 February 1963, A11099, accessed on 12 February 2013 at http://recordsearch.naa.gov.au/scripts/Imagine.asp
NAA, 1963b, “Australian Relationships with the Organisation for Economic Co-operation and Development”, Cabinet Submission No 1037, Copy No 73, A1838 724/5 Part 4.

NAA, 1965, “Report to the Minister for External Affairs by the Inter-departmental Committee to Review Australian External Aid”, 25 March 1965, A4311, File No. 147/2.

NAA, 1969, “Organisation for Economic Co-operation and Development (OECD)”, an information note for the minister, dated 10 September 1969, from K. C. O. Shann in the DEA, NAA, A1838 – 724-4-30 Part 3.

NAA, 1970, “Australian Membership of OECD”, a Report on Discussions at Ministerial Meeting, Paris, 20-22 May, 1970, by J. W. C. Cumes, dated 2 June 1970, in NAA A1838 724-4-30 Part 5 – Accession.

© OECD Observer No 300, Q3 2014

See also:

G20 Brsibane 2014

Australia: Brisbane 2014 special




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