HC Deb 26 July 1972 vol 841 cc1819-25
The Chancellor of the Duchy of Lancaster (Mr. Geoffrey Rippon)

With your permission, Mr. Speaker, and that of the House, I should like to make a statement on the conclusion of the Special Relations Agreements between the European Communities and each of the EFTA non-candidate countries.

On Saturday, 22nd July, I represented Her Majesty's Government at the signature ceremony in Brussels for these agreements. Because of the resignation of the Finnish Government two days earlier the Finnish Agreement was initialled but not signed.

It had always been envisaged that the enlargement of the European Communities should be accompanied by suitable arrangements to meet the needs of the EFFA non-candidate countries. Our own strong interest in the preservation so far as possible of the free trade already established under EFTA has been reaffirmed many times in this House and in the communiqués issued after ministerial meetings of EFTA.

The agreements which have now been concluded provide for free trade in industrial goods between the Communities and each of the EFTA non-candidate countries, after a transitional period, with, in addition, agricultural provisions in some cases. Each agreement follows the same general pattern but there are variations to meet the needs of each non-candidate country. Copies of the texts of the agreements will be placed in the Library of the House.

There are special transitional arrangements for a limited number of products; for example, paper imports from the EFTA non-candidate countries. The conclusion of the negotiations on paper, on which the Communities will be eliminating their tariff only over an extended period of 11 years, presented certain problems. It is particularly satisfactory that these were overcome. We agreed on a solution which tookfull account of the difficulty in which the British Paper Industry finds itself at present, and was also acceptable to our partners in the Communities and EFTA.

I should like to recall that it has long been the policy of successive Governments to seek to heal the division of Western Europe into two trading blocs. The House will no doubt note with satisfaction that as a result of these agreements this division has now been healed. That, I believe, is the real significance of last Saturday's ceremony.

Mr. Shore

The right hon. and learned Gentleman will recognise that we found it a little difficult to follow the final stages of the negotiations for an industrial free trade area agreement as closely as we would have wished because they coincided with the substantial blackout on reporting in the British Press caused by the industrial dispute. Subject to that, is the right hon. and learned Gentleman aware that the whole House will note with satisfaction the conclusion of the industrial free trade area agreement between the European Economic Communities and the non-applicant EFTA countries, with one reservation on Sweden and Finland to which I will return in a moment?

It will give a special satisfaction to such champions of European free trade as the right hon. Member for Barnet (Mr. Maudling), who pioneered this whole concept in 1958, and to all those in this country and in Norway and Denmark who have argued that there is a realistic alternative to full membership of the EEC in a satisfactory free trade area agreement.

Will the right hon. and learned Gentleman confirm that the EFTA countries concerned in the agreement will not have to pay any contribution to the Community budget, that they have accepted no obligation to import high-priced Community agricultural products, that they will retain full control over the movement of capital and establishments, that they will retain the right to pursue their own independent commercial and tariff problems, and that they will not transfer the power to make laws from their own Parliaments to the institutions of the Six? If that is so, as I believe it is, is it not clear that this is exactly the kind of arrangement that we in Britain could and should have negotiated once it became clear that reasonable and satisfactory terms for full membership were not available to us?

Turning to Finland and Sweden, I remind the right hon. and learned Gentleman that throughout the negotiations he reiterated that the Government's policy was to achieve an agreement which would avoid the necessity of re-erecting trade barriers, should Britain join the EEC, between ourselves and our existing free trade area partners of EFTA. That has been a persistent theme in Government statements. We note that this has been watered down in the statement today to: in the preservation so far as possible of the free trade already established under EFTA. How does the right hon. and learned Gentleman explain as being consistent with his pledge the imposition of what I believe is to be an 8 per cent. tariff on our paper imports from Sweden and Finland, together with a duty-free quota amounting to considerably less than the average which we have imported from them in the last three years?

I find it all the more extraordinary in that this is not an agreement which the Six have insisted that we should accept, but rather an agreement which we ourselves have demanded of the non-applicant EFTA countries entirely of our own free will.

Finally, does not the Chancellor of the Duchy agree that if he is serious about healing divisions between trading blocsthere is all the more reason now for him energetically to press the Government for a further post-Kennedy Round, so that we cannot get a system of regional trading blocs which will divide the whole world trading system?

Mr. Rippon

May I first thank the right hon. Gentleman for what he said about our satisfaction at the conclusion of these agreements. There was plenty in the Press about the matters raised in the negotiations which were of particular importance to British industry. It is true that the news blackout prevented people appreciating that we concluded matters satisfactorily last Saturday.

As the right hon. Gentleman says, the non-candidate countries do not accept many of the obligations which we have accepted. On the other hand, they do not get the benefits of participating in the decision-making process of the Communities, or in the development of the commercial, industrial and regional policies which are important to us.

The right hon. Gentleman and the House will recall that the Leader of the Opposition when he was promoting this application made it perfectly clear—and we accepted it—that second-class membership would not be suitable for the United Kingdom. He said that on 26th March, 1968.

The right hon. Gentleman said that Sweden and Finland by not becoming full members will not enjoy all the advantages. The new arrangements for paper represent a fair balance of mutual advantage in the changed circumstances. We told the Community that we were quite happy to see a lower tariff and a shorter transitional period to full free trade, but that if there were to be a tariff there could not be discrimination between us and the rest of the Community. We said that if the Community were to insist on 8 per cent. we should have to insist on the same. Throughout the transitional period we shall move up to 8 per cent., while the other Community countries move down to 8 per cent., at least until 1977; thereafter, we move together in equal stages towards complete free trade. That is one example that shows that a country cannot expect to opt for second-class membership and get all the advantages.

We appreciate that the neutrals have particular problems, but in the course of the ceremonies on Saturday various representatives of the countries concerned welcomed the fact that the agreements leave the way open for further evolution and for various non-candidate countries to play a greater part in the years ahead.

I agree with the right hon. Gentleman about the second Kennedy Round and the arrangements which will have to be made in an enlarged Community to bring about a greater liberalisation of trade in Europe. We shall now have to think about our relationship with the rest of the world, and no doubt this will be one of the matters which will be discussed at the summit.

In regard to Sweden and Finland, the arrangements we have made provide for 90 per cent. of their present trade to this country to come in duty-free. This is taking account of the fact that we have offered duty-free quotas for the bulk of their exports of paper.

Sir Robin Turton

While congratulating my right hon. and learned Friend on his success in the enlargement of free trade in Europe, may I ask him to reconsider his decision merely to place a copy of this agreement in the Library of the House? Surely it is important that every Member should have this document as either a Command Paper or a White Paper so that it may be properly examined by hon. Members.

Mr. Rippon

I am sure my right hon. Friend is right. The first step is to put copies of the various agreements in the Library. Thereafter all the agreements will be published in the miscellaneous series of Command Papers. The agreements relating to the Coal and Steel Community, to which the United Kingdom was a party, will be published in the treaty series.

Mr. Jay

Did I rightly understand the right hon. and learned Gentleman to say that these EFTA countries will not have to make any contribution at all to the common agricultural policy?

Mr. Rippon

Yes, that is right; I indicated that they do not have to accept some of the obligations.

Mr. Heffer

Then why should we have to do so?

Mr. Rippon

As a result, of course, they do not get the advantages.

Mr. Bryant Godman Irvine

What effect will this have on traditional imports from Canada, especially on paper imports?

Mr. Rippon

We took action in the earlier negotiations to safeguard in the various provisions in the Treaty of Accession our imports from Canada.

Mr. Mayhew

May we have an assurance that we shall continue to enjoy the big advantages of this important agreement if we withdrawn from the EEC after joining it?

Mr. Rippon

I fear not.

Mr. Blaker

Is my right hon. and learned Friend aware that even if the point appears still not to be understood by the right hon. Member for Stepney (Mr. Shore), it is clear that the non-members cannot expect to play the same rôle in the formation of central policy in the Community in the coming decades as that played by full members?

Mr. Rippon

As a LabourForeign Secretary one said, if we were not full members we would simply be passengers on a train, somebody else would be doing the driving, and we would not have any control over the direction in which it was going.

Mr. Milne

Is the right hon. and learned Gentleman aware that he is talking nonsense in referring to our travelling on a train? Does not this agreement represent a victory for the non-applicant EFTA countries, rather than for those who are within the EEC at the moment? Is he further aware that if he and his right hon. Friend the Prime Minister had pursued this policy from 1957 onwards, the mainstream of European unity would now have been consolidated instead of fragmented, and that the EEC agreement which was concluded and negotiated in the 1960s has held back European unity rather than fostered it? However, we welcome this latest agreement, which will help the Government to be saved from themselves in the years that lie ahead.

Mr. Rippon

When the hon. Gentleman refers to the statement being nonsensical, I would remind him that I was quoting the then Labour Foreign Secretary at the time the Labour Government made the application. I think the then Foreign Secretary made a fair point. No. doubt a number of right hon. and hon. Gentlemen opposite wish matters had taken a different course. A great many people in the late 1950s thought that we could negotiate simply an industrial free trade area. Experience proved that this was not possible for us, nor was it desirable. We have all been agreed on that for a very long time.

Mr. Speaker

This is the sort of occasion when the Chair finds itself in difficulty. The longer I allow questions on the statement to continue, the less time will be left to discuss the Housing (Financial Provisions) (Scotland) Bill, assuming that the next Motion is carried.