HC Deb 27 February 1940 vol 357 cc1877-9
34. Miss Ward

asked the Minister of Economic Warfare whether His Majesty's Government have consented, in any of the agreements concluded or under negotiation with neutral Governments, to the continuation of re-export to Germany by the neutral countries concerned?

Mr. Cross

With the permission of the House, Mr. Speaker, I will make a short statement on this subject at the end of Questions: perhaps the hon. Lady will be good enough to await this statement.


Mr. Cross

As I explained in my reply to the hon. Member for Romford (Mr. Parker) on 20th February, it would not be in the public interest to disclose the details of the various war trade agreements which we have concluded. But it may be useful if I take this opportunity to summarise very broadly the main features which, with some difference of detail, are embodied in these agreements.

These war trade agreements cover the whole trade of the countries concerned. In the first place, of course, we had to deal with their overseas imports. These imports fall within our contraband control and we are entitled to seize any contraband goods in respect of which we have some evidence or at least suspicion of enemy destination. But we cannot detain imports consigned to neutral countries except to the extent necessary to assure ourselves that they are genuinely required for the domestic consumption of those countries and are not going to Germany. Our first objective, therefore, has been to obtain appropriate guarantees from the Governments concerned that their overseas imports and especially imports of foodstuffs and raw materials will be used exclusively for their domestic requirements, including in some cases reasonable provision for stocks, and that they will not be re-exported to Germany. The neutral countries concerned have the machinery for preventing such re-exports through prohibitions of export or licensing systems, and one of the essential points of our agreements is to secure that these measures should be operated in a manner satisfactory to us. There has been no substantial difficulty in securing this.

I come next to the goods which these countries produce themselves. As regards such produce, the countries concerned usually stipulate that goods of purely domestic origin may be exported to both belligerents on the peace-time level, and, as these are goods which have not passed through our patrols, we have not the same control as we have of their overseas imports. Moreover, it must be remembered that the maintenance of such exports is vital to the economic life of the neutral countries concerned; and in many cases we ourselves benefit from such exports to at least as great, if not a greater degree than Germany. Even in this class of goods, however, we aim at reducing the exports to Germany as far as practicable.

There remains a group of intermediate cases where the neutral country has a manufacturing industry dependent on imports of raw materials. These are the most difficult cases to deal with; and our aim in the case of important commodities has been by agreement either to prevent entirely or to restrict to trifling quantities the exports to Germany of such manufactures. But the degree of restriction naturally depends on the circumstances and particularly on the importance of the commodity concerned.

In general, the war trade agreements aim at securing guarantees against the re-export of contraband goods to Germany, with the machinery for their enforcement, and thus facilitating the operation of our contraband control and, at the same time, enabling the neutral countries concerned to maintain their own domestic economy. But I should make it clear that there is nothing in these war trade agreements which prevents us from exercising our full belligerent rights in respect of any consignments in regard to which we have evidence of enemy destination.