HC Deb 26 May 1950 vol 475 cc2419-39

12.52 p.m.

Mr. Peter Smithers (Winchester)

I rise to divert the attention of the House from the important and the difficult problems which it has been considering for the past hour to the question of our interests in Latin-America. I suppose that when any hon. Member rises to address this House for the first time he must hope to speak upon a subject which he feels to be of real importance to those whom he represents. Few subjects could have a closer bearing upon the standard of life of the people of this country than that of our interests in Latin-America. After all, the Latin-American Continent is one of the great producers of food and raw materials and also one of the great markets open to us. I should like to remind the House that it is one of the few areas in the world today which has both great natural potential wealth and also a small population, and which, at the same time, is cut off from us by no political curtain of any kind.

It therefore seems fairly certain that as we face the problem of providing food and raw materials for the expanding human family during the latter half of the century, we shall have to look very largely to Latin-America. It is true that the days when great corporations could exercise almost extra-territorial rights in Latin-America are long since gone by. On the other hand, we now have a market for our manufactured goods which is about four times the size it was before the war. It is also true that the Latin-American peoples are now, rightly, very jealous of the interests of their own nationals. But it is also the fact that never before have they stood in such need of our technical skill.

I submit that the twin pillars of our policy towards Latin-America should accordingly be, first, to endeavour to fortify the position of those Republics as members of the free community of nations, and, second, to increase our trade and commerce with them. I believe that the Minister, with whom I have had some discussions about these matters, feels that some of the questions which I shall raise today ought to be addressed to other Departments, but the point of what I wish to say at the outset is that we have operating in Latin-America five or six Departments of State, and it is, after all, the function of the Foreign Office to coordinate and bring together their various activities and make sure that they amount to a foreign policy.

I should like to draw the attention of the Minister to one instance of what I think is a failure to do this. The Minister will be aware that the Ministry of Food have recently been chartering Soviet vessels to trade for us in the Caribbean. I do not want to enter into the merits or demerits of those transactions now, but I would suggest that the Caribbean is one of the politically explosive corners of the world today and that if we are to charter Soviet vessels to go there, political consequences must flow, one way or the other, from that action.

The point I wish to make to the Minister is that the Ministry of Food, when questioned in the House about matters of this kind, say that they should be guided by purely commercial considerations. In other words, they do not contemplate the political consequences of what they do. Is the Minister satisfied that his Department really has adequate control and influence over the actions of other Government Departments in the Latin-American area? Is his Department properly consulted, and is its advice regularly followed? I think it is most important that the Foreign Office should be consulted and its advice followed when other Government Departments, not necessarily the Ministry of Food, but others as well, contemplate action in such an important trading area as Latin-America.

If, on the home front, we could draw together the activities of different Government Departments, I submit to the Minister that in Latin-America itself our policy could perhaps be more effectively interpreted. I do not wish for a moment to criticise our representation there. On the contrary, I think that we are extremely ably represented at present. I wish to ask the Minister whether there is machinery for regular consultation between heads of mission in that area, and, if so, whether there is any effective link between them and political direction of our foreign affairs? I suggest that there should be a biennial conference of our heads of mission in Latin-America, preferably held on British soil, such as Trinidad or Jamaica, and that that conference should sit under the chairmanship of a Minister from this House.

I believe that such regular consultation would result in a much more vigorous and comprehensive approach to Latin-American matters, and would help to keep this House in touch with them. I warn the Minister that in this respect he will probably meet with the opposition of one or two heads of mission who would prefer to stay at home; as they will be the heads of mission who would particularly benefit by this type of conference, I recommend him to make it a three-line Whip. As I have served in His Majesty's Embassies and Legations under 15 heads of mission, I speak with a little experience in this matter.

I now turn to the balance of our diplomatic effort in the area. I do not know if the House is aware of the figures recently published about our foreign investments in Latin-America. I should like to point out what the estimates of them are. Our biggest investment of £170 million is in Brazil; our next biggest investment is £140 million in Mexico; a bad third is the Argentine, with £69 million; and then Chile, with £45 million.

I do not want to build too much on those figures, because I am quite sure that there are various interpretations which can be put upon them and many other factors to be taken into account. What I would like to ask the Minister is whether he and his Department do not think that the time has come for us to lay considerably more emphasis on our relations with Mexico. If I might say so without offence to any of my friends who have been First Secretary in Mexico, the Embassy there has really been staffed by a man and a boy for a very long time, and I would suggest that a greater concentration of the expense, and indeed of the manpower, which we have at our disposal in Mexico would pay us good dividends.

In that connection, I should like to welcome the announcement which the Minister made some time ago, that there are to be treaty negotiations with Mexico this summer. We ought to have had a trade treaty with Mexico long ago, and I urge the Minister to try to bring these negotiations to a conclusion as quickly as possible, because unless we proceed with the utmost despatch our foreign competitors will beat us to the trade.

There is one other way in which I think we ought to readjust our diplomatic effort in Latin-America. This is rather a difficult matter perhaps to mention in a maiden speech because it is controversial, but I believe that my hon. Friend the Member for Woking (Mr. Watkinson), if he is fortunate enough to catch your eye, Mr. Deputy-Speaker, will say something about it. It is simply this: that I feel that our diplomatic effort at the present time, instead of being concentrated upon measures designed to facilitate our trade, is being dissipated in the Government's food purchasing negotiations. I know that that is a controversial matter, so I will do no more than express that view.

I now pass to the structure of our trade treaties. I think we must all agree that, in the absence of any other arrangement, and in the present condition of world trade, bilateral trade treaties are better than nothing at all; but the tangle of bilateral treaties which now unites the countries of Europe with those of Latin-America is really on the point of breakdown—a number of treaties have broken down altogether, and many others are extremely disappointing. The Minister may be aware that European countries such as France and Sweden are experimenting with triangular trade with Latin-America, using Western Germany as the third party, and I should like to ask him, particularly in view of the fact that the United States are becoming very restive at our bilateral trading propensities, whether the possibility of our reestablishing some of the great triangular trades of pre-war days is being examined.

In that connection, I think that we ought to enlist the help, and indeed the advice, of the United States. The Minister may know that 12 American ambassadors to Latin-American States, who met in Havana in January, passed a declaration to the effect that it was in the interests of the United States that there should be increased trade between Europe and Latin-America. To those who served at the Washington Embassy during the Lend-Lease period, that is an extraordinary and most welcome revolution in American thinking, and I beg that we take full advantage of this helpful frame of mind in the United States towards our Latin-American trade.

I now pass to some of the obstacles which stand in the way of trade, and which I cannot but think sound diplomacy and good policy could do something more to remove. I believe that I might incur your displeasure, Mr. Deputy-Speaker, if I were to refer at length to the Amendment to the Finance Bill tabled by the Chancellor. I am not quite sure on that point, but at least I may say that the indication that the Government are prepared to do something to alleviate the burden of double taxation will be very welcome to all of us on this side of the House who have the interests of our firms in Latin-America much at heart.

I would urge the Minister, while the Chancellor is in a yielding frame of mind, to go a step further and to press him to do something to postpone the payment of taxes on profits which are "frozen" in the countries of origin. I would respectfully suggest that, if he can use any persuasion with the Chancellor he should point out that now is the time when we must do everything possible to enable our commercial concerns in Latin-America to compete with foreign firms on even terms; and that they cannot do that if the cost and the risk of trading in Latin-America, which is always high, is disproportionate to the yield.

In this same range of problems I should like to ask the Minister another question, and that is whether any consideration has been given to an important model treaty which the United States have been negotiating with Uruguay. This treaty is apparently to be the prototype for nine other treaties which the United States will seek to negotiate with other countries, and it deals with the controversial and important matters of the withdrawal of earnings, expropriation and compensation. This is a very ambitious diplomatic project, and its particular merit, if it succeeds, is that it will put the treatment of these matters upon a standard footing. I would commend that attempt to the Minister, and ask whether he thinks we might not with profit study it and perhaps adopt a similar approach ourselves.

I pass now, very briefly, to another topic—our disagreements with certain Latin-American Republics on the subject of our Colonies. I cannot go into that in detail, but I want to give the Minister forewarning about Guatemala. I feel very strongly that we cannot allow the quarrel with Guatemala about British Honduras to continue indefinitely on its present basis. I am advised that it would be inappropriate to debate this matter at length at present because there are to be elections in Guatemala in the autumn. I do not myself believe that those elections will materially affect the position, but I do say that when they are over, we shall have to raise the matter from this side of the House, and I would suggest to the Minister that we cannot leave a Colony which is, as British Honduras is, subject to great economic difficulties, and which is also the recipient of very large amounts of money from the British taxpayer, indefinitely open to this threat to its sovereignty.

I come now to my last point, which relates to our resident British communities in Latin-America. The Minister of State was kind enough to write me a lengthy letter on this subject, in which I suspect that some of my friends from diplomatic missions in Latin-America may perhaps have had a hand. While appreciating the interest which he took in this matter when I raised it, I should like to say that it is not enough for us to adopt a passive attitude and to say that our resident communities are managing to survive. We ought to adopt a policy of giving them active help and encouragement. The changing pattern of trade, the blight of exchange control, domestic legislation in certain Latin-American countries and penal taxation here at home have made it almost impossible for a private person to settle in Latin-America and trade or enter into business, and very difficult for firms to send out personnel to recruit their staffs.

I would therefore ask the Minister, in this respect, to use his influence, first with the Treasury, to try to bring about a more sympathetic attitude in this matter, and, second, with the Governments in Latin-America to endeavour to help there. I am well aware that Latin-American Governments are, very rightly, jealous of the position of their own citizens. But it has been my observation that whenever our own people go to Latin-America and are prepared to respect the laws and manners of the people among whom they live, they are invariably made welcome; the local resident Englishman, or Scotsman, becomes the most respected member of the community. They are also a priceless asset to us in this country. I would make a special request to the Minister to look at this matter again to see if we can do something more to help.

If I may sum up my rather long requests, they are these: first, that the Foreign Office should exercise proper control and direction, if they can, over certain actions of other Government Departments, and make sure that they do not run contrary to our diplomatic interests; second, that there should be closer consultation between our missions in Latin-America and better contact with this House; third, that something should be done to redress the balance of our diplomatic effort so as to give more prominence to Mexico; fourth, speedy con- clusion to the negotiations and, if possible, a Mexican treaty; fifth, the concentration of our diplomatic efforts on measures intended to help trade rather than to promote Government trading; sixth, the exploration of the possibility of re-opening some of the triangular trading circuits; seventh, that we should enlist the help of the American Government in that matter; eighth, to go a little further along the road of double taxation relief; ninth, to go also along the road of relieving the burden of taxation on frozen profits; tenth, I hope that the new American system of trade treaties as embodied in the financial prototype will be studied; eleventh, I warn the Under-Secretary of State that if he is still on those benches in the autumn I shall have something to say to him about Guatemala; and, finally, I want him to take some positive action about our British resident colonies.

I apologise for detaining the House for a few minutes longer than is usual in a maiden speech. My only excuse is a conviction that we should approach the problems of Latin-America with vigour and in a constructive spirit, for by so doing we can make a real contribution to the standard of living of our people and strengthen appreciably the ties which bind the Latin-American family of nations to the remainder of the free world.

1.13 p.m.

Mr. Watkinson (Woking)

It is a very pleasant duty to congratulate my hon. Friend the Member for Winchester (Mr. Peter Smithers) on his first speech in this House, and I do so with the greater pleasure because we both served in the Royal Naval Volunteer Reserve during the war. I cannot claim, as with my hon. and gallant Friend the Member for Gosport and Fareham (Surgeon Lieut.-Commander Bennett), that we were torpedoed together, but we are at least a small task force, trying to draw attention to this very vital matter, which affects us not only on the political and diplomatic level, but most intimately and deeply on the commercial level. It has been to me, as I have listened to my hon. Friend, a most enlightening thing to realise what knowledge and what breadth of experience he can bring to this very difficult problem of relations between these inter-related countries, which counts so little to the ordinary man in the street in this country, and yet which ought to count for so much, because so much of his well-being and trade depends on our success in maintaining friendly relations and close commercial associations with those countries. I congratulate my hon. Friend on one of the most erudite maiden speeches that I have had the pleasure of listening to in this House.

Let us now leave the diplomatic level and come down to hard facts and talk about the commercial relations between this country and Latin-America. I am sorry that there is no one on the Government Front Bench from the Board of Trade, but perhaps the Under-Secretary of State for Foreign Affairs, who I know has already been asked a lot of questions, would be kind enough to pass one or two more which I wish to put to him about trading relations. The main point I want to make is that trade between our country and almost all central and other American countries ought to be complementary. They want to sell things to us, and we have many things to sell to them. That should be one of our most prosperous export markets for this country's manufactures.

I have some interest in this matter because my company is an exporter to many of the countries in South America. Since the war we have been making big efforts to get back into the happy trading relations we enjoyed before the war, but often we are considerably hampered by the activities of His Majesty's Government. Let us look into this for a moment. It is my view that the duty of His Majesty's Government in our trade relations with those countries should be that of the big brother—that they should be there if they are required, but I do not think they should step into the arena and start exchanging blows all round without full consultation with those on the spot. That is one of the things which has been hampering many of our trading arrangements in South America.

Let us deal with the Argentine. It is very difficult to argue that their State trading has not been encouraged, if not actually sponsored, fostered and initiated, by the fact that we have gone to them and dealt with them on the basis of State purchases of meat and other commodities. In my view it is a question of State buying leading to State selling and encouraging State selling, whereas our whole object should have been to continue those intimate and long-standing—they are almost personal—relationships which existed in those countries between the British senior traders out there and their opposite numbers in the Argentine and other countries. Much of that relationship has now been destroyed, and, therefore, our trading position has been greatly weakened. It is because of the efforts of the Government that our position has been so very weakened.

Let me turn for a moment to a question that has already been mentioned—the growth of competition from other countries in these markets. Almost anybody, in my opinion, could have done business in Latin-America in the last few years. There were numerous shortages of capital and other goods. Out there they had fairly good years and there were surpluses of meat and other goods which could be exported. The position has now changed. They have had some bad years out there, and their internal consumption is growing as their standard of living rises, that standard of living having risen as a result of their purchases of capital goods from countries such as ours. Therefore, the whole pattern of trading is beginning to change and becoming more difficult.

I would ask the Minister to pass on to his colleagues in the Board of Trade my request for an assurance that in the current Argentine negotiations, or in any other trade negotiations that may take place, the opinions of the people on the spot will receive most careful consideration before any negotiations are concluded, and that they will be taken into consultation at every stage where their specialised knowledge and contacts with the people on the other side of the table can be used. It is essential that friendly and practical relationships shall continue in the more difficult trading conditions that we have to face in the years to come in those countries.

I do not want to take up the time of the House at this stage, but I would raise one other point. Again, it is not entirely within the purview of the hon. Gentleman, but I hope he will pass it on to his colleagues, because it is a matter of great importance. It particularly applies to the Argentine, where a great many British firms have done what they were told to do by the British Government, that is, to push capital goods into the South American countries and thus swell our export figures. It is very nice, but those companies now cannot get any payment at all for the capital goods which have been sent out, and if we are to increase our export figures in this way, while it may look very nice on paper and pleasing to the President of the Board of Trade, it does not please the unfortunate companies, who have debts of literally millions, in the Argentine, and who have little hope of seeing those debts repaid.

Perhaps this matter falls a little more within the purview of the hon. Gentleman than may appear, and I would ask him, therefore, whether, in the conduct of future negotiations, it could be made a prime factor that the debts owing to firms in this country should receive a definite promise of settlement. I would mention one figure from the Argentine, in respect of railway locomotives and rolling stock, of £3 million owing to this country. That is a lot of money. In trade negotiations with these countries some firm attempt might be made to see that the money will be paid.

I will not ask the hon. Gentleman any more questions, except for an assurance that in all negotiations he will see that the men on the spot, the representatives and agents of British firms in places like the Argentine, Brazil, Chile, also the local British chambers of commerce and all the other businessmen, many of whom spend their working lives in those countries, shall have a chance to express their views to Government missions and to brief them with information about the local position, when negotiations are going on. Finally, firms who loyally obey the instructions of the Government and try to trade, very often at cut prices which show very little profit, should not be penalised by having their capital locked up in debts which they see very little opportunity of having repaid.

1.22 p.m.

Mr. Walter Fletcher (Bury and Radcliffe)

I take the opportunity of congratulating my hon. friend the Member for Winchester (Mr. Peter Smithers) on a maiden speech of the very highest quality both in matter and manner. It is very rare for a maiden speaker to be able to make in his maiden speech a real contribution of high value that could probably not be made by any other Member. That should ensure to my hon. Friend that most valuable thing that any hon. Member can acquire, a hearing from both sides of the House from those who desire to enrich their store of knowledge and hear a contribution which must help the work of the House as well as the object which hon. Members have in view.

I support very much what my hon. Friend said about trade with Latin-America. I usually speak about the other end of the world, but I do a great deal of export trade with Latin-America, and I can vouch for the accuracy of the picture which he has drawn. Latin-American countries have been the greatest cause of providing us with frustrated, unrequited, and very often just unpaid-for exports that one can find anywhere in the world. Those who follow these things factually must know, when they see trade figures, that those figures are thrown into a great deal of doubt, and that while exports may have been made, they frequently have not been paid for, or even more frequently have been paid for only after a great deal of delay, and very often we have had nothing in return.

This country did more to develop Latin-American countries than any other. For more than 50 years, enterprises such as railway and engineering projects, stemmed from the imagination and financial strength of this country. It is incumbent upon the Government that in their policy that fact should not be forgotten. Under the various systems of exchange control, which is the villain of the piece in trade with Latin-America, it too often happens that the importer into that country, possibly advised by his Government, sees in the delay that arises an opportunity to repudiate his contracts. When markets are dropping off and other goods are becoming available at lower prices, there is a temptation to get out of contracts. There is very considerable delay and difficulty about our trade with Latin-America, but an increase of such trade would very materially assist in raising the standards of living both here and there.

One of the great obstacles is the large cost of consular services provided by the consuls of those countries. Those services seem to be carried out with only the least desire to foster trade and with more desire to find some technical fault for which a fine can be imposed, than in the case of any other series of countries. I have made known to the hon. Gentleman's Department one or two instances of this kind. It would be very well if he were to circularise the various Embassies concerned, pointing out that the cost and delay imposed upon traders through the working of the consular services might well be a matter for protest.

The question of dual taxation has been touched upon. It is coming up for discussion in certain of its forms after the Recess. There is no greater irritant, and at the same time no greater means of stopping trade flowing between countries and of stopping mutual confidence and development, than dual taxation. The responsible director of any firm, thinking in terms of the risk he is taking for his shareholders, will find frequently that owing to the incidence of dual taxation he is taking a five-to-one debt on behalf of his shareholders which would be much better carried out at Epsom tomorrow than in the ordinary daily trade of a merchant. If he pays 40, 50 or 60 per cent. here, and then 30 or 40 per cent. upon the transaction in the country concerned, the residue for the shareholder, who is taking the commercial risk, is very small. Moreover, he knows that inevitably and invariably he is allowed to take 100 per cent. of the loss.

We are now entering a different era of trade in which competition is getting greater. I would like to point out that the old and well-established connection that Germany had with Latin-America is just beginning to make itself felt. In regard to the Far East, four and a half years ago I warned the House of what might happen about Japanese competition. Now, anybody who is in trade with Latin-American countries knows that German competition, missions and men, are being built up again and that the process of knitting up all the connections that were severed during the war is going on apace.

The Minister himself, during Question Time recently, appeared to me to take rather lightheartedly this question of German competition and to cry it down with the idea that until it really became critical it was not worth watching or doing anything about it. If he will examine the position in Latin-America he will find that German competition is growing. Men are going out; and so is literature, beauti- fully got up. Deliveries that Germany can give of a great many things are being supplied in competition with what little trade remains to us.

I support both of my hon. Friends very much in their main thesis. If we can get the series of curtains that have been let down against our trade in Latin-America raised, if by strong diplomatic representation and by contact with the trading community both in the countries concerned and here, it becomes known that our policy without hesitation is that we intend to protect and encourage our trading community and not let it be pushed around, one of the great missing links in our foreign trade will have been repaired and reformed. If we could get trade going in Latin-America proportionate to what it was before the war, our exports from this country would be on a very much more certain basis than they are at present.

1.30 p.m.

Lieut.-Colonel Hyde (Belfast, North)

I want briefly to raise two points in addition to those which were so eloquently put by the hon. Member for Winchester (Mr. Peter Smithers) in his maiden speech and by other hon. Members. The first is the inconveniences to British travellers in Latin-America on account of the present visa system. There are 20 countries in Latin-America and all of them have different and sometimes quite oppressive requirements in regard to both transit visas and visas for tourists to visit the country.

I have been in South America on several occasions and I can remember being asked to supply a dozen photographs and certificates that I was not suffering from trachoma and other strange diseases, and that I had not been in gaol. It is a fairly easy thing to produce a certificate that one has been in gaol but it is more difficult to certify that one has not been. I wonder whether some reciprocal arrangements can be made between us and the different Latin-American countries in order to ease these restrictions in connection with visas.

The second point I want to make is what I might describe as the promotion of cultural relations between Great Britain and Latin-America. The British Council seems to be withdrawing gradually from Latin-America except for the Argentine Republic, Uruguay and Brazil. They have withdrawn from Paraguay and Ecuador and do not seem to be doing very much in the other parts of Latin-America, including Mexico. There is a tremendous appreciation of British culture among the Latin-American peoples, and everything ought to be done, particularly at this time, to foster and increase those cultural interests.

The hon. Member for Winchester referred to British investments in Latin-America. We still have very considerable investments there. Although our investments in the railways to the extent of about £200 million have recently been liquidated, we still have something in the region of £630 million invested in Latin-America, and that represents a very considerable interest on the part of Great Britain and British capital, and it is an interest which the Minister ought constantly to bear in mind.

1.32 p.m.

The Under-Secretary of State for Foreign Affairs (Mr. Ernest Davies)

I most sincerely congratulate the hon. Member for Winchester (Mr. Peter Smithers), who initiated the Debate, on his extremely able maiden speech. I congratulate him on having the patience and good sense to wait until he was able to raise a subject in which he is really interested and with which he is so well acquainted. The speech which he has contributed today will certainly be remembered by those of us who were present—I regret that there was not a fuller House to listen to him—and I can assure him that those who were here will do their best to see that in future a larger number of hon. Members are present when he speaks. The hon. Gentleman has raised a very large number of questions and I will endeavour to answer as many as I can. I thank him for the extreme courtesy which he displayed in informing my Department in advance of many of the questions which he was proposing to bring to the attention of the House.

His first question was whether the Foreign Office considered that it had adequate control over the activities of other Departments in connection with Latin-America. The answer is that the Foreign Office is, of course, ultimately responsible under the Cabinet for our relations with other Governments and for furthering the interests of British subjects and protecting their interests also, and that there is considerable machinery for co-ordinating the activities of other Departments with the Foreign Office. There are committees at high levels and inter-departmental committees, and we are well satisfied that our interests in Latin-America are fully and satisfactorily co-ordinated through such committees; but when it comes to the Foreign Office itself I know that the hon. Gentleman is well aware that the matters are centred in His Majesty's ambassador in each capital city and that it is His Majesty's ambassador who is responsible to the Foreign Office which is finally responsible for the activities even of other Departments and other missions which have to be there. Therefore, in that respect we are satisfied that the co-ordination and responsibility is as it should be.

The hon. Member also asked me whether there was machinery for regular consultation between the missions in the different countries and whether there was a sufficient link in their political direction. Again, the Foreign Office is responsible for keeping our missions informed as regards political directives, and the ambassadors are, of course, responsible direct to the Foreign Office, and it would not be practicable, or it would be a departure from normal procedure, to delegate that responsibility as between the different missions linking together in the field.

I know that the hon. Gentleman did not entirely suggest that, but he also suggested that there might be a biennial conference between the various ambassadors, ministers and so on. He made the rather novel suggestion that Ministers from this House should go and preside over such meetings. He then suggested that there should be a three-line whip for the ambassadors. I wonder what he thinks would happen if there were three-line whips for the Ministers while they were away? I am not sure that this is not a manoeuvre to get some Ministers out of the way during the present situation in Parliament.

Taking this seriously, there are considerable difficulties in the way of having such meetings. One must not overlook the very vast distances in Latin-America, nor the necessity for our representatives abroad to come back to this country. In some ways it is more important that they should return to this country to learn what is happening here and to obtain a knowledge of political developments and policies, and so on, rather than meet out there on the spot. There are a great number of differences and different problems as between one Latin-American country and another, as the hon. Member is well aware, but we are certainly interested in the comments which he has made in this respect, and I assure him that we take them seriously and will examine them with great care.

The hon. Member for Winchester then dealt with Mexico, in which he expressed a certain interest. He wanted more emphasis placed on our relations with that country. He suggested, rather unkindly I think, that the mission there was practically confined to an office boy and another person. I have looked this up and I find that we have in our mission there an ambassador, a first secretary who is head of the chancery, a commercial counsellor who deals with the commerce in which the hon. Member is so interested, and a commercial secretary as well as other staff, including a labour attaché, which gives eight members in the reasonably high grades. Considering the size of the country and our interests there, I think that Mexico is pretty well served in the representation there of His Majesty's Government. It is true, as the hon. Member stated, that a Mexican trade mission is coming to this country. We are anxious to receive this delegation and to discuss with them the furtherance of trade with Mexico. I can assure the hon. Member we will do all in our power to make the visit of that delegation here a success.

On the matter of international trade generally with these Latin-American countries, the hon. Member suggested that we should develop triangular trade. I suggest to him that there is a large amount of it carried on at present between the Latin-American states, ourselves, and the United States of America. That is so because a certain number of these countries are what we term the "American account" countries, where sterling is convertible into dollars, and vice versa, and in those countries there is free trade and multilateral trade. Then there is another group of countries where trade is carried on which have transfer- able sterling and, in those cases, triangular trade can be developed within the transferability of sterling. So I think the hon. Member under-estimates the extent to which there is triangular and even multilateral trade in that area.

What is of great benefit to this country is the fact that we have succeeded in carrying on our trade with these Latin-American countries in sterling. Arising out of remarks made by some other hon. Members who have contributed usefully to this Debate, I suggest that the trade with those countries is on a somewhat greater scale than they indicated and that there is considerable trade between us and the Latin-American countries. I will give one or two figures to indicate this.

In the four years 1946 to 1949, we have received from the major supplying countries in this area no less than 1,786,000 tons of meat, 1,280,000 tons of animal feedingstuffs and a considerable quantity of hides, and £55 million of cotton. That represents a considerable volume of goods and money. Against that we have exported to these countries a considerable amount of capital goods and heavy equipment which, as was mentioned by one hon. Member, are in particular demand in the Latin-American countries. In the same years, to the Argentine we have exported over £86 million of such heavy goods, to Brazil over £44 million and to other countries £58 million, making something like £189 million of capital goods and heavy equipment during those four years.

So I suggest that if one takes into account all the difficulties with which we are faced in those countries: the extent to which they have sterling available for purchasing; the extent to which there is local protection inside the countries, by which I mean partly the development of their industries which is going on to a great extent; the fall in the production of certain goods such as meat and grain, and the increased internal consumption of such goods; and the industrial development of those countries—if we take into account such difficulties, we have reason to congratulate ourselves on the success with which we have continued to maintain the Latin-American market.

The hon. Member for Winchester mentioned also the model treaty which has been under consideration by the United States. In connection with Latin-America we cannot compare ourselves with the United States, as the hon. Gentleman is so well aware. For instance, the United States is today a large investor of capital whereas we are not. We have examined and are still examining this model treaty, many of the conditions of which are already covered by our agreements. We are not sure whether the Americans are convinced as yet that they can have a standard form for all countries, since there are bound to be certain differences in view of the differences in those countries. I can assure the hon. Gentleman, however, that we will study the model treaty further with great care.

Then there is the question of taxation, raised by more than one hon. Member. One way of dealing with it is by allowing taxation in the foreign countries to be offset against payment of British Income Tax, and that is being provided for and will be debated shortly in this House. It would be out of order to refer to coming legislation. There was the other point raised about not insisting on payment of taxes where the funds are frozen overseas; that is to say, in countries such as the Argentine, where taxation is due in this country and remittance of funds is not permitted, the Treasury should not press for payment. I can assure the hon. Gentleman that the Treasury takes a lenient view in such cases.

Mr. P. Smithers indicated dissent.

Mr. Davies

The hon. Member shakes his head. Comparatively speaking, we think it does. Where there are serious cases of hardship the Treasury is lenient. Where it is a large company with considerable assets in this country, we do not see any reason why they should not use those assets in this country to offset the funds frozen overseas and which they are using for purposes of furthering investment in this country.

Mr. W. Fletcher

The hon. Member used the word "assets"; would he explain what he means by that? The assets of those companies are trading capital. They are being asked to pay out the capital they use for their trade in order to pay tax which is frozen at the other end. That is not leniency.

Mr. Davies

When I referred to assets I referred to the liquid assets or they may be the capital assets, or one thing or another. The simple point is that they have funds available with which to pay off their debts to the Treasury which have been incurred through taxation.

Mr. Watkinson

While we are talking about blocked accounts, will the hon. Gentleman say whether something more cannot be done to assist those companies which have large sums owing to them from South American countries and which are so difficult to recover at the moment?

Mr. Davies

I can assure the hon. Member that that is kept constantly in mind when negotiations are going on for trade agreements and otherwise with the countries concerned. Large sums are involved and it is often difficult to reach agreement on these matters. However, His Majesty's Government are well aware of the claim of British subjects in this respect.

Before I sit down, I must deal with the point about our resident communities in these Latin-American countries. I do not see what His Majesty's Government can do in this respect. It is unfortunate that there has to be exchange restriction and that we cannot give any priority of treatment to the Latin-American countries. In other words, all countries must be treated similarly as regards the remittance of funds, the export of capital, or in other respects, and we do not feel that there has been any case made out which justifies the Treasury departing from this exchange control in respect of any one or all of the Latin-American countries. It is unfortunate that exchange control must continue, but it arose from the war, for reasons well known to hon. Members.

Mr. Smithers

My point is that these resident communities in Latin-America, as indeed elsewhere, are a great capital asset, in one sense of the term, to us in this country. I hope, therefore, that the hon. Member will bring home to the Treasury how valuable they are to us and that there is a strong argument for making it possible to recruit them. They are wasting away by death and other causes, and it is recruitment that is the difficulty.

Mr. Davies

If the resident communities are such a great asset to us, I do not see why it should be necessary to remit sums to them. An asset is generally something which pays dividends and is not in receipt of subsidies. Apart from that, the question of recruitment is not for His Majesty's Government. Quite clearly, there are ways and means whereby people going abroad on legitimate business, and to take up residence there in connection with British concerns, are given facilities for removing from this country, travelling and obtaining necessary currency and so on. If the hon. Member for Winchester, who has had communications with my Department on this, has any specific cases, we are always willing to consider them and make representations to the Treasury if we consider that that is justified.

In conclusion, I wish to express appreciation for the way in which the hon. Member for Winchester raised the matter, for the courtesy he showed in drawing attention ahead of time to the points he was raising, and once more to congratulate him on his excellent maiden speech. The Government are well aware of the importance of the Latin-American market both as a provider of the world's needs, including food, and in particular as a potential supplier of increasing quantities of foodstuffs. We are well aware of the complementary nature, referred to by one hon. Member, of their market and ours, and I can assure the hon. Member that all the points raised this morning will be seriously considered by the Government.