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Thursday, 15 March 1956

Mr MALCOLM FRASER (WANNON, VICTORIA) . - Other speakers in this debate h ave concerned themselves chiefly with problems that exist between Australia and the countries to our immediate north, or with the wider problems that exist between theWestern Powers and the Soviet Union or countries dominated by the Soviet Union. I wish to devote my time to-day more particularly to problems which exist within the British Commonwealth, and within the Western Powers themselves.

We have seen over the last few years - and it is one of the most significant developments of the post-war years - the transition from the British Empire to the British Commonwealth. Although our fathers may not like it, the fact is that the British Empire is passing out of existence, and in its place is coming something which will be far more enduring and beneficial to world peace - the British Commonwealth of Nations. The fact that this is so is too obvious to need reemphasis, but I remind honorable members that India, Pakistan and Ceylon are dominions, and that soon Malaya, Singapore and portions of Africa will receive full dominion status, thus increasing the number of dominions within the British Commonwealth, and thereby increasing its power and influence in the world.

There are many reasons for the emergence of the British Commonwealth, the first to come to mind being perhaps the growth of nationalism ; but beyond that - and this is most important - there is a very sincere recognition by Britain itself that the greatest gift it can give to the world is the gift of self-government, as it has been evolved over the years through the British Parliament. But there are other reasons, equally potent, if a little less kind. Great Britain of itself and by itself is not the world power that it was in 1900, because to-day the Royal Navy and the English Channel cannot alone protect England from troubles that may arise on the continent of Europe. For that reason, England has felt some necessity for retrenchment in its world obligations, and its liaison with Europe through the European Payments Union in the economic sphere and through Nato in the political sphere, both show Great Britain's very real and true concern with the problems of Europe. Again, it is worth noting that for the first time in a period of peace, England has committed two divisions of garrison troops to the continent of Europe.

This change from the British Empire to the British Commonwealth has had great repercussions on Australia as an integral part of that Commonwealth. Since World War II., perhaps for the first time, we have pursued - partly because changing circumstances have made it necessary, and partly because of our own growing obligations towards the preservation of world peace - a more independent policy than otherwise we might have pursued. Evidence of that can be seen in Seato and the Anzus Treaty, and in the work that we are accomplishing under the Colombo plan. However, there is one very important thing which Australia can do and which I believe our Minister for External Affairs (Mr. Casey) is tending gradually to accomplish, and will accomplish in the future. Through our geographical position in relation to the countries to our north, Australia can be the bridge between divisions of opinion which inevitably arise between England and America, because America has to look to the East to Europe and to the West to the Pacific, and England tends to be more preoccupied with Europe.

Australia can also be the bridge, and this is vital to our continued independence, between the white and the coloured races. The way in which we help the nations to our immediate north, some towards self-government and others towards achieving their own aims and building up their own economies, will do a great deal towards accomplishing this object. Again, I commend the work of the present Government under the Colombo plan. The socialists have often said in this debate that the weapon of ideas is sufficient to overcome the dangers that exist in relations between East and West, but I point out with due deference that it is very difficult to make effective use of the weapon of ideas upon those who have been indoctrinated through two generations, from the first day they go to school, with a certain ideology which cannot be reconciled with our thought or views, or, indeed, with our continued independence. I shall quote a short extract from a speech of a former British Foreign Secretary, Mr. Ernest Bevin, in 1948. Speaking of the differences between East and West, he said -

For a long time we tried - certainly 1 tried to recognize that fact, to say that these two views of life wore irreconcilable, to acknowledge that and then to say : " Well, as one can never " - and I say this emphatically - " us one can never really conquer the other the only alternative is to try to live together and to allow people to enjoy their own economic systems and their own conceptions and ways of life ", To that end we approached the problem. But into the conduct of foreign policy there have been injected methods which make it almost impossible to settle even that problem. The weapons used by the Slav expansionists - as you see in France now and ap you may possibly see in Italy shortly (if the Intelligence is correct), and in Belgium, and probably here if they could get a grip, and in the Far East - the weapons used are civil war, disruption of the economic life of the country, and every possible device to prevent, a nation not in agreement recovering it" economic life after the war.

He went on to say that the Russians had told him many times that they had plenty of time, and were prepared to wait until there were internal disruptions in other countries, when they would step in and institute their police state. I believe that we are destined to a long struggle between the ideas of East and West, and that we shall reach a static position only when Russian militarism ceases its attitude towards the world, or after a great struggle on our part to maintain our independence.

This is partly due to a limited success of the United Nations. If we are to succeed in preventing Russian influence from extending, strength on our part is vital. There must be a wider union of the nations of the free world.

After World War II. economic solidarity was recognized. The evils of imbalance of the 'thirties were to be banished for ever. There were post-war dreams of economic co-operation between the nations. I propose, Mr. Deputy Speaker, to devote a few moments to this problem. The dreams of the post-war world, I believe, have largely been abortive. We saw originally the clear conception of the Keynes Clearing Union, out of which we have the lesser success of the International Monetary Fund. Under the clearing union, Keynes had instituted the novel idea, of which I shall say more presently, that creditor nations had as great an obligation to get rid of their surplus credits as debtor nations had to get rid of their debts. Obviously, a nation that is always a creditor nation in its overseas balances is not playing its part in the extension and maintenance of overseas trade. Those ideas did not, in full, capture the imagination of people at the Bretton Woods conference, and the scarce currency clause in the International Monetary Fund is all that remains of the original conception that creditor nations should be penalized together with debtor nations.

In addition, there was the Havana charter which, in its original conception, has largely been forgotten. Out of that, we have the General Agreement on Tariffs and Trade, but whether it has had any real effect on extending world trade under present conditions is doubtful. The Havana charter itself was never brought before the American Congress, although the American representatives at Havana signed it. I believe that the British Commonwealth was not particularly interested in the charter, in view of the fact that complete freedom of trade was postulated in it, and because the Ottawa Agreement would not have been lawful under that charter. In addition, there was the International Bank for Reconstruction and Development. It is a strange paradox that, although that bank was set up to encourage development in backward and undeveloped countries - I emphasize backward and undeveloped countries " - Australia is the largest borrower from the bank. That demonstrates that the International Bank has not fully achieved its original purpose.

The transition period of which the economists of the late 'forties spoke, and for which there is provision in the International Monetary Fund, is not a transition period, but a permanent period of our present world economic situation. It is a period of imbalance in world trade. Especially during the last few months, we have seen the very real possibility, and, indeed, the actual fact, of trade barriers being increased rather than lowered, and therefore we must ask ourselves why this is so. I believe that one of the principal reasons is that the United States of America has been a persistent creditor since the war years. It is true that that country has shown untold generosity in helping other countries to get on their feet, but lending to other countries only helps them to buy from America ; it does not help America to buy from them. Unless the United States can create conditions inside its own economy so that it can, if necessary, dispose of its great industrial potential within its own boundaries, and so create conditions which will make the United States want to buy as much from abroad as other countries want to buy from it, I believe that the problem of world trade and the difficulties of extending world trade will remain very real.

Present circumstances tend to lead to bi-lateral agreements and to discriminatory action. Examples of this can be seen in France and Argentina. These agreements tend to lower the level of world trade, rather than to increase it. In these days, when we are approaching a possible period of greater economic hardship than we have seen for some time, all the countries of the Western world must be careful lest they fall into the danger of carry ing out policies of economic nationalism which were seen at their worst in the thirties, especially in Germany, under the skilful guidance of Dr. Schacht. These things would be disastrous to the unity of the Western world - a unity which is essential for the continued peace and security of our way of life in the British Commonwealth and other free democracies.

There are some positive things that can be said about these problems. The question that any persistent creditor country, such as the United States, should buy from other countries as much as they buy from it, should receive international recognition. It would do much to increase the volume of world trade and prosperity. The British Commonwealth could, I believe, play a greater part in setting an example to the rest of the free world. We saw how the international wheat agreement was originally introduced, and, later, how, in large measure, it was dissolved because Britain, its original instigator, withdrew from it. Again, in recent years we have seen the disagreements that arise, and which probably will arise in the future, because of the outdated provisions of the Ottawa Agreement. If Britain and Australia cannot get together, they present a poor example to the rest of the world. A new effort is required to solve these problems, and to bring about greater multilateral trade in the Western democracies.

The solution of these trade problems is vital to our continued well-being and security, because if they are not solved, we shall have the sort of internal situation of which Russia and communism can take full advantage; the advantage of which Mr. Ernest Bevin spoke at the Commonwealth Parliamentary conference in 3948. It is all-important that we should look to these economic links within the British Commonwealth of Nations and the free world because of the change that has taken place in the form of the British Empire in its transition to the present Commonwealth of Nations. As a political union, the Commonwealth is looser than the Empire was. If we are to maintain our strength and solidity economically, that union must be made stronger if possible. I hope that within the next few years, more progress will be made towards a solution of these problems because I believe that the struggle with communism and with Russia will be a long one. It will last until they accept a static position in the world. Therefore, we must maintain constant vigilance and effort to make sure that our own security and prosperity are preserved.

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