Siberian Gas Pipeline (Hansard, 19 July 1982)

§ 6. Mr. Lennox-Boyd
asked the Minister for Trade if he will make a statement on his discussions with the American Secretary of Commerce concerning United States trade embargoes in connection with the Siberian gas pipeline.

§ Mr. Peter Rees
When I met Commerce Secretary Baldrige in Washington I expressed the Government's strong objection to the measures taken by the United States Administration which purport to restrict the export by non-United States companies of certain oil and gas equipment to the Soviet Union. I stressed the harm that these measures must do to commercial relations between the European Community and the United States. I also informed Secretary Baldrige of the order made on 30 June by my right hon. and noble Friend under section 1(1) of the Protection of Trading Interests Act.

§ Mr. Lennox-Boyd
Did the American Secretary of Commerce manage to explain satisfactorily how he reconciles his Government's policy of seeking to coerce European companies into applying economic sanctions against the Soviet Union, with, at the same time, exporting vast amounts of grain to the Soviet Union?

§ Mr. Rees
I ventured to point out that anomaly to the Secretary of Commerce. I was not entirely persuaded by his explanation.

§ Mr. Sheerman
Will the Minister inquire how British companies will be affected if they try to break the embargo? How do they know when they are breaking the embargo if they use techniques and equipment which they have used in Alaska and elsewhere and lend or sell that equipment in Europe?

§ Mr. Rees
I am reluctant to give comprehensive legal advice from the Dispatch Box, but I understand that such companies would be at risk if they re-exported parts acquired from the United States or if, in the process of exporting to the Soviet Union, they used technology for which they were licencees by agreement with United States companies. I cannot anticipate what counter-measures the United States Administration might be disposed to take if a British company were in that position. We should have to consider that carefully and we might make representations if that eventuality arose.

§ Mr. Eggar
Would any of the discussions with the Americans or our European partners be necessary if Her Majesty's Government and the previous Government had decided to build a pipeline to take gas from the Norwegian and British sectors of the North Sea to the Continent, using the United Kingdom?

§ Mr. Rees
I am asked to speculate on the likely reaction of European consumers. My hon. Friend and the House will appreciate that Britain will not benefit directly from the trans-Siberian pipeline. I cannot speculate whether the interesting alternative that my hon. Friend suggests would have met the energy needs of, for example, German companies.

§ Mr. Gregor MacKenzie
When in Washington, did the Minister point out to the United States Administration the number of jobs that Scotland and the rest of the United Kingdom would lose as a result of the American President's decision? Is the Minister aware that the matter is taken seriously, and that most people believe that it can do nothing but harm to Anglo-American trading and political relationships?

§ Mr. Rees
I stressed the damaging impact that the regulations could have on British companies, particularly those operating in the part of the world that the hon. Member for Rutherglen (Mr. MacKenzie) and the hon. Member for Dunbartonshire, Central (Mr. McCartney) represent. I put that to the forefront of my argument.

§ Mr. Kenneth Carlisle
Is my hon. and learned Friend aware that the United States embargo is also having its effect on businesses here that do not have to import components from the United States to fulfil their share of a contract? Is he aware that the embargo will have an effect on jobs and that he must find a solution to the problem?

§ Mr. Rees
Earlier I stressed that it is a question not only of the import and re-export of parts from the United States, but of the use of United States technology. We are as concerned as any European country to find a reasonable solution. The problem is souring trade relations between the United States and the European Community.

§ Mr. John Smith
Is the Minister aware that I recently wrote to his right hon. Friend the Secretary of State stressing the support that the Opposition would give to any 9 action by the Government to resist the United States embargo? Is he aware, from the feelings expressed from both sides of the House, that it is felt widely that the action is not only economically foolish but commercially backward and politically maladroit in its effects? Will the hon. and learned Gentleman take further action, if necessary, under the Protection of Trading Interests Act? Will he assure the British firms involved of the Government's fullest support at a legal level and of their intention to protect them against commercial repercussions? Will he assure the firms that that solid defence of their interests will involve other Western European countries?

§ Mr. Rees
I did not criticise the measures promulgated by the President in quite the same terms as those used by the right hon. Member for Lanarkshire, North (Mr. Smith) from the Opposition Front Bench, but that was the tenor of my remarks to the United States Administration. I assure the House that, depending on how the situation develops, we shall not be hesitant in activating the further provisions of the Protection of Trading Interests Act.