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our basic position that a transfer of soverignty must be acceptable to the
Islanders. Failing any of these solutions we seemed bound to be faced with an unsatisfactory formulation such as that in sub-paragraph (f), which
said that we would be prepared to cede sovereignty provided that the
argentine Government offered satisfactory guarantees and safeguards for the Islanders' interests. This formula was open to the serious objection that
it transferred responsibility for deciding the matter from the Island ers to the United Kingdom Government; this was a responsibility which we declining to accept in the case of Gibraltar, a situation with which the Falkland Islands situation would no doubt be compared in the United Nations and elsewhere.
The United Nations Committee of Twenty-four would shortly expect a
progress report on our discussions with the Argentine. At the present stage we should merely say that discussions continued. We had however to envisage a fuller publication of the course of the negotiations at some later stage, and so it was important that any formula we put forward for discussion was
one that we could defend.
It was clearly in our interests to achieve an amicable settlement of
the dispute, which in addition to exposing us to criticism in the United Nations, was an irritant to Anglo-Argentine relations. The Argentine was our
most important trading partner in Latin America; our exports were considerable
though the balance of trade with the Argentine was in their favour. He and the Commonwealth Secretary accordingly sought authority for discussions to take place with Dr. Ruda on the basis of the proposals set out in OPD(67) 549 which involved no departure from the principles previously agreed by the Committee, though they afforded some textual flexibility.
In discussion the Committee expressed general agreement with the
proposals in the memorandum by the Foreign and Commonwealth Secretaries for
conducting the next round of discussions about the Falkland Islands dispute.
We had no defence interest in the Falkland Islands, and indeed were unable
to defend them effectively, and our principal object was to achieve an anicable and honourable settlement. However, it must be recognised
that there was at present little reason to suppose that a referendum would
show that the Islanders were willing to join the Argentine, a course which
would afford them no advantages and a number of disadvantages. Even if
communications between the islands and the mainland were reopened it was unlikely that there would be much contact (e.g. through Islanders going to the Argentine to seek work); and in the event of a transfer of sovereignty
it was likely that the majority of Islanders would wish to come to the United Kingdom or to go to New Zealand.
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