HC Deb 20 February 1968 vol 759 cc232-5
Q5. Mr. Roebuck

asked the Prime Minister what proposals he now has for new economic groupings, in view of the failure of the attempt to enter the European Economic Community.

The Prime Minister

I have nothing to add to the speech by my right hon. Friend the Foreign Secretary in the Foreign Affairs debate on 24th January.—[Vol. 757, c. 428.]

Mr. Roebuck

Does my right hon. Friend not recall that, last May, he envisaged the possibility of talks about such groups if the Common Market negotiations did not proceed with pace and momentum? Why have we not had them yet? Is it because of some rigidity among some of his right hon. Friends? If so, will he teach them the virtues of pragmatism?

The Prime Minister

There is no question of undue rigidity here. My hon. Friend knows the Government's policy. We have made our application for entry of Europe. We have run into—many people forecast this and everyone knows the reason for it—a roadblock, but we shall continue our soundings and contacts with those in Europe who strongly support our entry. Therefore, there is no need at this time for conversations of the kind which my hon. Friend suggests.

Mr. Thorpe

Although the events of last week in Paris would suggest that the Federal German Republic's Government are not as firm allies as some of us had hoped that they would be, do we take it that the Benelux proposals are still regarded by the Government as very much a live issue?

The Prime Minister

Yes, Sir, we regard them as a live issue and as an essential next step forward. As regards what happened in Paris, it is too early to form any clear view, but the German Government are sending a high official over for discussions with my right hon. Friend tomorrow and we hope to know a great deal more by the end of the week about what happened in Paris. No one is very dear about the exact significance of the Paris agreement.

Mr. Heath

Have the Government done an analysis of the consequences of individual tariff reductions covering both industrial goods and agriculture, as would appear to lie behind the proposals in Paris? If so, what conclusions did they come to, especially in view of the fact that the most-favoured-nation clause of G.A.T.T. would have to apply?

The Prime Minister

Yes, there is certainly a good deal of doubt about whether this would be consistent with G.A.T.T., unless it was part of a total free trade area or a total economic union. Also, of course, no one understands what is meant by the reference to agriculture, whether it would mean more exports from E.F.T.A. countries to the Common Market or the other way around. It is not possible to make a detailed statistical assessment, because the proposal has not been put forward at all clearly following last Friday, and there is some doubt about whether any detailed proposals have been worked out by any of those who support that idea.

Mr. Heffer

Would my right hon. Friend in considering any possible temporary alterations not be led astray by those voices being raised urging a North Atlantic free trade area which I am sure most Members of the House recognise is not on?

The Prime Minister

We shall not be led astray. So far as this situation is concerned, we recall, as will the right hon. Member for Barnet (Mr. Maudling), that when we tried to negotiate a free trade area the answer was "No, you must put in your application". This has now been done twice by successive Governments. Now we are told—I use these words—I hope correctly—in the Parliamentary sense—"Back to Maudling. Back to the free trade area proposals", which suggests that there is a rather more fundamental objection to British association.

Mr. Wyatt

Does not the Prime Minister agree, whatever may be said about the change in the German Government's attitude, that Paris last week showed a great change in General de Gaulle's attitude, in his suggestion that we might join the Common Market by stages involving a greater economic association stage by stage? Would it not be worth while, not sticking to our own rigid attitude, but trying to find out what that means, and seeing if we can do something about it.

The Prime Minister

That is exactly what we are trying to do. That is the reason for the talks with the German Government tomorrow, and with other friends in Europe to see exactly which was meant. It would be a great mistake to say that, because of last Friday, we should withdraw our support for the Benelux proposals. These should be examined. It has been suggested that we might come into the Common Market at some point, as a result of this particular lead, but there does not seem to be so far any definition of when or with what degree of guarantee.

Mr. Crouch

Before the Prime Minister considers any alternative groupings, can he say that he has not finally excluded from his mind the possibility of some association with the Economic Community?

The Prime Minister

We made clear our position about association with the Economic Community. If by that the hon. Gentleman means Article 238, we have made clear that we regard this as an unsatisfactory alternative to our main application. The proposals from Paris so far at any rate seem a good deal vaguer than a straight Article 238 association.

Mr. Raphael Tuck

Has my right hon. Friend envisaged progressive reduction of tariffs between E.F.T.A. and the E.E.C. to the point where we get the establishment of the Thirteen as a much wider-looking Community?

The Prime Minister

That was the proposal made by Her Majesty's Government at the E.F.T.A. Prime Ministerial Conference in Vienna in May, 1965, but when the proposal was further urged with the Six it ran into the same kind of blockage as we have had with other proposals.

Several Hon. Members rose

Mr. Speaker

Order.