§ Q6. Dr. Gilbertasked the Prime Minister if he discussed future arrangements for the defence of Western Europe in his recent talks with M. Pompidou.
§ The Prime MinisterEuropean security was among the subjects discussed at my meeting with the President of France.
§ Dr. GilbertWhat guarantees can the right hon. Gentleman give to the House that should the Common Market decide at some future date to extend its activities into defence any British adherence to such an arrangement will be subject to scrutiny more substantial than the Order in Council procedure provided for under the European Communities Bill?
§ The Prime MinisterIf the European Community wishes to extend in fields beyond the Treaty of Rome there has to be a new treaty.
§ Mr. Biggs-DavisonIs it not essential that the fullest defence partnership should be achieved in Western Europe as early as possible, and at any rate in advance of a European security conference?
§ The Prime MinisterI agree very much with the first part of my hon. Friend's supplementary question, but I should have thought this was unlikely to be possible before a European security conference. It is generally hoped that there might be a European security conference in 1973. On Western European security, a start has been made in particular with the Eurogroup of N.A.T.O., which was started by the former Secretary of State for Defence, but I cannot tell my hon. Friend that progress will be substantial before a European security conference.
§ Mr. HealeyWill the right hon. Gentleman tell the House whether President Pompidou is now prepared for France to join the Eurogroup inside N.A.T.O.? Secondly, in view of the fact that he told a correspondent of Le Monde 1676 that at the meeting at the Elysee President Pompidou thought the time was not ripe for discussing Anglo-French nuclear co-operation, will the right hon. Gentleman tell us whether President Pompidou held a different view at the meeting at Chequers last weekend?
§ The Prime MinisterOn the latter point, the view of both of us remains the same, that the time is not ripe to discuss these matters. My views are well known. At the Elysee we also agreed, as the right hon. Gentleman said, that the time was not ripe for dealing with this. The question of France and N.A.T.O. was not one of the aspects that we discussed. We concentrated on the question of a European security conference, what could be achieved, how the preparations could be carried out, and what our policies should be at the conference.
§ Q8. Mr. Blakerasked the Prime Minister what discussion he had with President Pompidou during the latter's recent visit about the liberalisation of world trade.
§ The Prime MinisterPresident Pompidou and I found ourselves in general agreement on trade matters. It will be in the interest of the enlarged Community that there should continue to be orderly progress towards the liberalisation of world trade; and as the world's largest trading unit it will have a special responsibility in this regard.
§ Mr. BlakerMay I draw the attention of my right hon. Friend to the recent joint declaration made by the European Community countries and the United States in which they undertake to initiate world trade negotiations next year for the expansion and the ever-increasing liberalisation of world trade? Does not that declaration confirm that the European Community, far from being an inward-looking body, is likely to be a powerful force in the growth of world trade?
§ The Prime MinisterYes, I agree with my hon. Friend. We were of course consulted about this matter and we warmly support the declaration. The Community demonstrated in the Kennedy Round that it was prepared to work seriously and hard over a considerable period 1677 of time to achieve greater liberalisation of world trade, and that is still its attitude.
§ Mr. PardoeIs the right hon. Gentleman aware that one of the greatest agents leading towards the liberalisation of world trade is the maximum flexibility of international exchange rates? Did he emphasise to President Pompidou at his recent meeting that we in this country and Her Majesty's Government are—if necessary, against France—on the side of those who are working towards the maximum flexibility of international exchange rates?
§ The Prime MinisterIt depends what the hon. Gentleman means by the flexibility of exchange rates. There is a general desire amongst all members that margins should be narrowed within the Community. This does not preclude wider margins in relation to the world outside the Community. If the hon. Gentleman means that from time to time members of the I.M.F. will change their parities, either upwards or downwards, the hon. Gentleman is right. If he means that all currencies should be floating, the experience after 15th August showed that whereas many people had previously said that they would welcome such a situation, it began to have a deleterious effect on world trade and uncertainty spread, particularly in the heavy capital industries which were involved in long-term contracts. Therefore, most people in business came to the conclusion that this was not something with which they wished to live.
§ Mr. ShoreWill the Prime Minister impress on President Pompidou that trade liberalisation, if it is a serious objective, is quite inconsistent with the pattern of special trade preference which France and other countries in the Six have together been pursuing in the Mediterranean and associated areas?
§ The Prime MinisterI cannot accept that doctrine. We never accepted it with Commonwealth preference—and the right hon. Gentleman has been the strongest supporter of Commonwealth Preference against going into the E.E.C. What we have in the Western world is a generalised system of tariff preferences for the developing world, and that is of advantage to all.