HC Deb 17 November 1958 vol 595 cc845-52
Mr. H. Wilson (by Private Notice)

asked the Paymaster-General whether he has any statement to make about the negotiations for the establishment of a Free Trade Area in Western Europe.

The Paymaster-General (Mr. Reginald Maudling)

Yes, Sir. In October, 1957, the 17 nations of the O.E.E.C. recorded their unanimous determination to secure the establishment of a Free Trade Area that would take effect in parallel with the Treaty of Rome. The Inter-Governmental Committee, of which I am the Chairman, was appointed to conduct the necessary negotiations.

In these negotiations the French Government have always faced difficulties of quite a special order, as has been generally recognised, and they have felt compelled from the start to enter a number of reservations. In February the French Government told us that they were going to combine these reservations in a single set of proposals which would be submitted to the Inter-Governmental Committee by the six partners of the Treaty of Rome.

The resulting proposals reached the Inter-Governmental Committee last month. They confirmed the desire of all six countries to seek a multilateral solution of the problems and to see the Free Trade Area coming into force on 1st January. At the meeting in Paris last week the Inter-Governmental Committee completed its first examination of these proposals. This examination revealed points both of agreement and of disagreement. Arrangements were made for further consideration of a number of points of difficulty.

On Friday, M. Soustelle announced that it did not seem possible to the French Government to establish the Free Trade Area as it had been proposed and that they were looking for a new solution. In these circumstance, the meetings arranged for this week could not take place as the whole basis upon which the Inter-Governmental Committee has been operating, namely, the unanimous determination of all Governments to secure the establishment of a Free Trade Area, seems to have been brought into question.

Her Majesty's Government will enter as soon as possible into consultations with all Governments concerned in order to clarify the resulting situation. This is a matter of particular urgency because of the imminence of 1st January, when the first reductions of tariffs and relaxation of quotas will be made under the Treaty of Rome. Unless arrangements are made to the contrary these measures will not be extended by the six countries to the other members of the O.E.E.C. The consequences of such a situation could clearly be serious, especially if any breach of existing international obligations were involved.

As I have explained to the House on more than one occasion, Her Majesty's Government have always recognised the special difficulties that the French Government face in these matters, and we have constantly expressed our desire to find a solution to them. I should like to confirm once again that any proposals that the French Government, in consultation with their five partners, wish to put forward to safeguard the economic position of France, particularly in the next few difficult years, will be very readily considered. But we do not believe that any solution to these problems need be such as to involve the abandonment of the idea of the Free Trade Area, to which so many Governments are deeply attached.

Mr. Wilson

Is the right hon. Gentleman aware that hon. Members on both sides of the House will want to pay tribute to him for his patience in these very long drawn out negotiations, not least at times when he has had to face almost intolerable behaviour from some of the countries with whom he has been dealing, and even though hon. Members on this side feel that he has sometimes been sent naked into the conference chamber because of the extent to which the Government have weakened the trading links of the sterling area, which would have been his strongest power?

I should like to ask two specific questions. First, is the right hon. Gentleman aware that the concern and anxiety that he has expressed today and upon other occasions about the prospect of Europe being divided economically, and of the onset, on 1st January, of anti-British trade discrimination in Western Europe, will be shared by hon. Members on both sides of the House and people in all parts of the country?

Secondly, as the Opposition have given the Government general support in these negotiations and have shown very great patience, in a Parliamentary sense, over these last two years, and since we have now come to the end of a particular road, will the right hon. Gentleman discuss with his right hon. Friend the Leader of the House the possibility of having a debate so that hon. Members on both sides can express their feelings about the situation and make proposals as to the way in which the Government should move?

In preparation for that, will the right hon. Gentleman also convene a meeting of those countries in the O.E.E.C. which are not members of the Rome Treaty, to ensure that a common line is taken by them, and so that countries which are members of the Rome Treaty will understand exactly what we feel about the situation?

Mr. Maudling

I am grateful to the right hon. Gentleman for the way in which he has received this announcement. Nothing has been of greater value throughout the past year than the clear expression of the general view of the House of Commons in this matter, upon which, I am glad to say, there has been no division upon party lines, so far as I am aware, since this problem is essentially one which faces the United Kingdom as a whole. It also faces many other countries in Europe. When the right hon. Gentleman talks about discrimination against British goods one should say that the real danger is discrimination within the O.E.E.C., as between the Six countries and the other eleven—as I am sure he would agree.

As for a debate, my right hon. Friend the Leader of the House will take note of what the right hon. Gentleman has said, but I am sure that the right hon. Gentleman will realise that in these matters the exact timing of the debate may be a matter of some delicacy.

As for the right hon. Gentleman's final point, I can assure him that Her Majesty's Government are conducting a series of consultations with all the countries concerned in this matter.

Mr. Jay

Does the right hon. Gentleman agree that this is not just a dispute between France and Britain, but between France and almost every other member of the O.E.E.C.? Would it not be best tackled on that basis?

Mr. Maudling

I welcome the opportunity to emphasise once again that this is not an Anglo-French dispute. Nothing would be more tragic than an Anglo-French dispute. As I tried to say in my statement, the French Government feel—and we all recognise their right in this matter—that they have certain special problems, which it is the concern of all Europe to see met without damage to the general interests of Europe.

Mr. Patrick Maitland

In view of the fact that the Commonwealth countries at Montreal said that they hoped that a feature of European economy would be its outward-looking character, will my right hon. Friend bear in mind that the markets of the Commonwealth are expanding even more rapidly than those of Europe?

Mr. Maudling

Certainly; the markets of the Commonwealth are expanding rapidly, both for our goods and for goods of other countries, but it would be a mistake to think of this problem as a choice between the Commonwealth and Western Europe. Any such choice is unnecessary.

Mr. Bellenger

May I ask the right hon. Gentleman whether the House can be put in possession of the suggestions made by the six nations to the Inter-Governmental Committee, so that we may know, before a debate takes place in the House, exactly what the difficulties are as between France and the rest of the O.E.E.C. nations? Further, if agreement is not reached, will it affect the proposed trade treaty between Britain and members of the six nations?

Mr. Maudling

The negotiations are of a confidential character and, therefore, it is not for one Government to disclose details of all of them.

I am sure that my right hon. Friend the Leader of the House, when considering arrangements for a debate, will take into account the needs of Members on both sides of the House for adequate information to be put at their disposal for a proper debate.

The important point is that all our expansion of trade and prosperity in Western Europe over the last ten years has been based on the O.E.E.C. and that there is definite danger here to the fundamental principles of the O.E.E.C.

Mr. Fell

Will my right hon. Friend take consolation from the fact that people in this country will feel very deeply that he has tried very hard to solve an almost insoluble problem? Will he also take consolation from the fact that many of our people will now feel that the Government's hands are free to develop, as hard as they can, and, indeed, concentrate upon, the supreme effort which is needed to develop the Commonwealth markets as they were developed at the time of Ottawa and to get the results in foreign markets which were achieved after the Ottawa Conference?

Mr. Maudling

Everyone has worked hard on this problem, but the consciousness that one has worked hard is no consolation should failure occur.

I must repeat that in the view of Her Majesty's Government there is and can be no conflict between expansion of our relations with the Commonwealth and expansion of our trade with Europe.

Mr. Wade

While agreeing with the Minister as to the very serious consequences of a breakdown of these negotiations, may I ask him two questions? First, to what extent has the retention of Imperial Preference provided an obstacle to arriving at agreement, and, secondly, are we to understand that there is no prospect of another meeting of the Common Market countries before 1st January?

Mr. Maudling

The question of Imperial Preference was not raised in the Inter-Governmental Committee until Thursday afternoon of last week, when it was agreed to discuss some detailed points that the six Governments wanted to raise at subsequent meetings that take place this week and thereafter. I welcome the opportunity to make clear that all that has been decided so far is that the meetings arranged for this particular week cannot take place with any useful purpose in the present confused situation. That is all.

Mr. Hay

Arising out of that reply, will my right hon. Friend make it clear that what has been abandoned are the meetings for this week, which, I understand, were to deal with two particular problems, and that there is no question at the moment of the whole of the negotiations in the Inter-Governmental Committee itself being abandoned? Further, would my right hon. Friend resist any attempt to turn the attention of the country against the Six as a whole and also bear in mind that in some of these very difficult matters he has had very good allies among some members of the Six?

Mr. Maudling

Certainly, Sir. The only thing that has happened so far is that the meetings arranged for this week have been postponed, which was obviously necessary in the confused circumstances. It has always been the view of Her Majesty's Government that the Free Trade Area, so far from damaging the Treaty of Rome and the Common Market, will, in fact, provide the only context under which that Treaty can redound to the general benefit of Europe as well as of the six members of the Common Market.

Mr..J. Hynd

While the right hon. Gentleman states that he appreciates the special difficulties of France in this matter of the Free Trade Area, may I ask whether he does not also recognise that in every one of the actions taken towards the building up of European unity the difficulty has basically arisen from the constant refusal of this country to take a full part in those actions and to seek a special position, whether justified or unjustified, a point which we can discuss on another occasion? Will he make it clear that we in this House recognise that it is our reluctance to take our full part in these matters that has caused most of the difficulties? Will he not agree that an early debate in the House, in which the full expression of different views on both sides can be made, might well break up the rigid attitude which has been taken in both camps on this matter?

Mr. Maudling

Without referring to the question of an early debate, the fact I must emphasise is that the Free Trade Area has commanded for a long time now the complete support of the very large majority of Western European Governments.

Mr. H. Wilson

Owing to the cancellation of this week's meetings, the right hon. Gentleman will have a little spare time. Will he therefore use some of it to explain to his hon. Friend the Member for Yarmouth (Mr. Fell) the reasons why he says that there is no conflict between the Free Trade Area and more Commonwealth trade, and bring to his attention particularly our statement from this side of the House on 26th November, 1956, that we were supporting the Government on this only on condition that they went more actively into expanding Commonwealth trade?

May I also ask the right hon. Gentleman, in the hope that we shall have a debate at not too distant a time—and we agree that the timing problem is difficult—to take up the point made by my right hon. Friend the Member for Bassetlaw (Mr. Bellenger) in relation to the publication of a White Paper to show exactly what stage has been reached in the negotiations? We have seen statements attributed to the right hon. Gentleman that the Government had moved very considerably from the position which they originally took up, as explained in the previous White Paper, and I think that to help the debate the House has a right to know what moves and what changes the Government have made since the last White Paper was presented to the House.

Mr. Maudling

I welcome the fact that the right hon. Gentleman has pointed out that this is not a matter on which to score party points. The issue of a White Paper is, of course, a matter which we shall consider. As far as I am aware, the House has already been informed of the departures that we have made in the course of the negotiations since the starting point.