HC Deb 29 June 1966 vol 730 cc1811-4
The President of the Board of Trade (Mr. Douglas Jay)

I will, with permission, make a statement.

I am glad to report to the House the successful conclusion of the trade discussions which I have had with Mr. Marshall, Deputy Prime Minister and Minister of Overseas Trade of New Zealand, during the past few weeks.

Our trade relations with New Zealand are at present governed by the United Kingdom/New Zealand Trade Agreement, 1959, and by a separate agreement of 1952 relating to meat. The 1959 Trade Agreement provides for the continuance of duty-free entry for New Zealand products into the United Kingdom, for certain preferences in her favour, for unrestricted access until 1967 of New Zealand dairy products and pork, and for possible anti-dumping action for the benefit of New Zealand exports to the United Kingdom. In return—[Interruption.]

Mr. Speaker

Order. I hope that hon. Members will allow the Minister to make his statement in reasonable quietness.

Mr. Jay

In return, the United Kingdom received guaranteed margins of preference on an extensive list of products.

The effect of the understandings reached in the talks concluded yesterday is that the 1959 Trade Agreement remains as the basis of trade relations between the two countries; but a number of important matters were agreed which will modify the Agreement:

  1. (1) the admission to the British market without restriction of quantity of imports of dairy products and meat from New Zealand will be extended until September 1972; imports of apples and pears from New Zealand will be treated in the same way;
  2. (2) New Zealand will guarantee margins of preference for certain United Kingdom exports at a higher rate than at present provided for by the Trade Agreement; and will bind duty-free entry for tariff items to be listed; this will cover a further £8 million approximately of our exports;
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  3. (3) revised arrangements have been agreed for the operation of the butter quota system;
  4. (4) the Trade Agreement of 1959 will be extended for three years from 1st January, 1967.
I am sure that the results of the trade negotiations will be welcomed both in New Zealand and in the United Kingdom.

The understandings which we have reached still require in some respects to be worked out in detail. It is intended to embody them in a Protocol to the Trade Agreement which will be laid before the House as soon as it has been signed. I hope that this will be in about three weeks.

Mr. Barber

Naturally, we shall wish to study the terms of the protocol which the right hon. Gentleman hopes to publish in about three weeks.

First, were the proposals for dairy products, meat and apples and pears discussed with the British farming and horticultural industries? Were they satisfied, and what will be the effect on those industries of this extension?

Second, will the revised arrangements for the butter quota system have any effect or consequences in relation to our agreement with the Danes?

Third, as Mr. Marshall has been reported as stating publicly that the United Kingdom restrictions on investment in New Zealand are unnecessarily severe, was the right hon. Gentleman able to reassure him on this matter of great importance to New Zealand?

Fourth, what effect will these new arrangements have on the possibility of our joining the European Economic Community, and what discussions did he have with Mr. Marshall on this subject?

Mr. Jay

As to dairy products, my right hon. Friend the Minister of Agriculture is satisfied that these arrangements will have no adverse effects on British agriculture.

Second, the right hon. Gentleman asks how the butter agreement will relate to our agreements with Denmark on the subject. These arrangements are perfectly consistent with the undertakings we have given to Denmark under the E.F.T.A. agreements.

Investment was not a subject discussed in these negotiations, which related wholly to trade.

The right hon. Gentleman asks about the repercussions of this agreement on any possible negotiations with the E.E.C. We have always said that in any such negotiations with the E.E.C. Commonwealth interests will be safeguarded. This agreement shows that that pledge is being kept.

Mr. Bessell

In welcoming his statement in broad principle, may I put two questions to the right hon. Gentleman? Will the agreement completely inhibit the United Kingdom from joining the Common Market? Second, could the right hon. Gentleman say what concessions the New Zealand Government have granted to the United Kingdom?

Mr. Jay

No, Sir; it will certainly not inhibit the United Kingdom from doing that. What it will ensure is that we keep our pledges to Commonwealth Governments.

The hon. Gentleman asks what concessions the New Zealand Government have made. They have bound some preferences and free entry in our favour which have not been so bound before. They are extending the area of goods to which this applies. In order to assist our arrangements with Denmark, New Zealand has agreed to continue for a further period the waiver of previous tariff preferences on butter to which New Zealand previously had a contractual right.

Mr. Burden

May I ask the right hon. Gentleman whether the New Zealand Government have also undertaken to remove some of the strict licences that they have imposed in the past upon some British merchandise, and whether they will now relax their licensing system? Will there be any relaxation of the import into New Zealand of British textile manufactures?

Mr. Jay

The New Zealand licensing system is a temporary one, imposed for balance of payments reasons. It is eased from time to time, and this agreement relates more to long-term trade arrangements.

Mr. Sheldon

Can my right hon. Friend give some examples of the im- provements in British exports to New Zealand that might be expected as a. result of this agreement?

Mr. Jay

I could not name individual items, but the area of exports over which facilities given to us apply has been widened by a further £8 million above a total at present of something like £60 million or £70 million a year.

Mr. Biggs-Davison

Do not responsible people in the Common Market fully understand that the United Kingdom must safeguard New Zealand's interests? Is it not a case that many of us, deeply anxious to have closer relations with other European countries, are very firm in wanting to keep preferential arrangements for that country?

Mr. Jay

Yes. That applies to a great many Members on both sides of the House.

Mr. Worsley

Will the right hon. Gentleman be a little more precise about the application of the agreement to our joining the Common Market? Will he say whether the pro-Common Market Ministers or the anti-Common Market Ministers are in the ascendancy over this? Is he aware that he has not answered the question of my right hon. Friend the Member for Altrincham and Sale (Mr. Barber), whether part of the purpose of this negotiation was to make our application easier.

Mr. Jay

I have already answered that question, but the hon. Gentleman does not seem to have understood the answer.

Mr. Barber

In his discussions with Mr. Marshall about the possibility of our joining E.E.C. did the right hon. Gentleman give the New Zealanders an assurance that, in the event of our joining E.E.C, these new arrangements would remain in being?

Mr. Jay

As I have explained in my original statement, these arrangements continue until a certain date. That is an undertaking which we have given to New Zealand and it is perfectly clear. It is not inconsistent with possible future negotiations with E.E.C.

Several Hon. Members rose——

Mr. Speaker

Order. I must protect the business of the House.