§ [Relevant documents: European Community Documents Nos. 8127/90 on conclusion of the Fourth ACP-EEC Lomé Convention, 4590/90 on transitional measures between the Third and Fourth Lomé Conventions, 5197/90 on the financing and administration of Community aid under the Fourth Lomé Convention, 6205/90 on the balance sheets and accounts of the European Development Funds for 1989 and 6704/90 on the operation of the STABEX system in 1989.]
§ Mr. Deputy Speaker (Mr. Harold Walker)Mrs. Lynda Chalker.
§ Mr. Bob Cryer (Bradford, South)On a point of order, Mr. Deputy Speaker. The Order Paper states that this instrument is subject to the qualification:
The Joint Committee on Statutory Instruments has not yet completed its consideration of the Instrument.That consideration was completed this afternoon. We have made a report to the House. Both the report and the two memoranda from the Department are available in the Vote Office to help the House to complete its consideration of the matter.
§ Mr. Deputy SpeakerI am grateful to the hon. Member for that information and advice.
§ The Minister for Overseas Development (Mrs. Lynda Chalker)I beg to move,
That the draft European Communities (Definition of Treaties) (Fourth ACP-EEC Convention of Lomé) Order 1991, which was laid before this House on 29th January, be approved.The fourth ACP-EEC convention, or Lomé IV as it is commonly known, was signed on 15 December 1989. The convention governs development and trade relations between the Community and 69 developing countries described as the African Caribbean and Pacific, or ACP, group of developing countries, which includes 33 of the 43 least developed nations as defined by the United Nations.The draft Order in Council to which the motion refers allows the convention's provisions to be effected in United Kingdom law. This in turn opens the way for ratification of the convention by the United Kingdom. The convention takes force when ratified by all EC member states and two thirds of the ACP countries, and concluded by the Community.
This debate provides an opportunity to consider other Community documents, and I am grateful to the hon. Member for Bradford, South (Mr. Cryer) for his point of order. These are the internal financing agreement, 5197/90, to which I shall return, the accounts of the European development fund, 6205/90, a report on the question of STABEX, 6704/90, the transitional measures, 4590/90, bridging the gap between the third and fourth conventions and conclusion by the Community of the fourth convention, 8127/90.
Because of the wide scope of Lomé and the limited time available, I shall not address the Community's other aid instruments outside Lomé, such as programmes for Asia and Latin America and the Mediterranean, or food or emergency aid. That would be outside the debate. But I wish to comment further on one of the other Community documents to which I referred. The draft Order in Council 933 specifying the Lomé convention followed established practice by also specifying the internal financing agreement, document 5197.
As the hon. Member for Bradford, South has said, the Joint Committee on Statutory Instruments met today and reported that it considers that no useful purpose is served by specification of the agreement. The Joint Committee's report draws this to the special attention of both Houses. It is important to comment on that.
I agree with the Joint Committee that this specification is not legally essential. However, politically, this specification is an appropriate method of bringing the agreement before the House in the context of a debate on the whole series of instruments relating to the Lomé convention. This financial commitment, arising from our obligations under the convention, will this year consume 9 per cent. of my total aid budget. I needed to comment on that, and the easiest way to do so was to tag it with the other documents to be discussed.
Having been closely involved in the negotiations, I am especially pleased to present the order to the House. There is much to commend in the treaty, which builds on its predecessors. The convention is the cornerstone of the European Community's relationship with the developing world. The provisions cover a wide range of development instruments and the convention's scope is unique. The high degree of commitment is demonstrated by the improvements contained in Lomé IV.
Lomé represents a partnership between the EC and the developing world, and brings the expertise and resources of the Community and member states to bear on agreed development goals. Under Lomé IV, there are some changes in the structure and, to an extent, to the scope of the convention. Those changes will make it even more effective. The structural changes are in the duration and membership of the convention. Where previous treaties covered five-year periods, Lomé IV runs for 10 years. Increasing the duration to 10 years reflects the Community's commitment to the aims of Lomé and our will to provide a stable framework for all parties involved. Cutting the frequency of full-scale negotiations will better enable us all to focus effort on the tasks involved in implementing Lomé IV.
Within this time period, the money for the financial instruments contained in the convention will be provided under two separate five-year European development funds or EDFs. EDF VII covers the first five years. EDF VIII will be negotiated in 1994. This will also provide an opportunity to review the aid provisions of the Convention at the halfway stage.
I welcome the addition of Haiti and the Dominican Republic to the membership of the convention, but in agreeing to this, the United Kingdom insisted, initially with little support but later with the full agreement of our partners, that traditional sugar and banana interests of the Commonwealth Caribbean should not be put at risk by this enlargement.
§ Mr. John P. Smith (Vale of Glamorgan)Is the Minister concerned at the apparent attempts by the Dominican Republic to export large quantities of bananas to the United Kingdom? That is contrary to the existing Lomé convention.
§ Mrs. ChalkerI shall deal with that in winding up. We are carefully watching what is going on, and I know that 934 the hon. Gentleman takes a special interest in the matter. As he knows from our discussions on the matter, I have fought hard to renew the protection provided for our traditional banana suppliers by earlier Lomé conventions, and I do not intend to give up now.
As the House may know, Namibia signed the treaty on 20 December last year. I know that the House shares my pleasure at that accession. I hope that the Community will help Namibia through the testing early stages of independence and democracy.
There are also important extensions to the scope of the convention. These include a new emphasis on the environment, on health and population planning, on participatory democracy and, above all, on human rights. We pressed hard on all these issues during the negotiations. I shall discuss these further after I have described the technical and financial aspects of the treaty.
The financial package for the next five years is covered by EDF VII, which was, as usual, settled outside the Community's budget procedures. There will be 10.8 billion ecu, or £7.5 billion, available for development assistance. Up to 1.2 billion ecu, or £0.84 billion may be added from the European investment bank's own resources. Those figures represent together a 46 per cent. increase compared with EDF VI. The British share of contributions to the 10.8 billion ecu EDF VII is fixed at 16.37 per cent. of the total. That amounts to 1.8 billion ecu. In sterling, our commitment is about £1.3 billion but the precise figure will depend on the exchange rate prevailing at the time that the funds are drawn down.
This is our largest ever single aid commitment and will represent an important part of the United Kingdom's total aid effort, which for 1991–92 will amount to some £1.9 billion. The funds will be spent and drawn down from the United Kingdom aid programme over a period of years as projects and programmes are implemented.
A particular feature of this convention is that 1.15 billion ecu has been earmarked from EDF VII to provide direct financial support for structural adjustment measures. This is to be used to support countries undertaking agreed economic reform programmes. In this way, the Community aid channel can lend its considerable weight to the work of the international financial institutions and the bilateral donors, including the member states, in this field. This will include in particular the special programme of assistance to debt-distressed low-income countries in sub-Saharan Africa; an effort co-ordinated by the World bank, to which we are giving very active bilateral support.
The Government believe that, if developing countries are to make sustainable economic and social progress, they need to participate as fully as possible in the world economy. That means encouraging trade, investment and private sector development. We therefore pressed hard during the internal EC negotiations for provisions which enable support to be given to the promotion of private sector activity. We believe that a healthy private sector is essential for the economic progress of all the ACP states. There, the role of the EIB is important, as its tasks include indentifying and channelling funds to efficient private sector activities.
It is, of course, of paramount importance that the very substantial resources involved are used effectively. The Commission and the EIB manage the funds in close collaboration with representatives of the member states in the EDF committee which approves all significant 935 spending proposals. EDF VIII in the Commission applies policies and criteria shaped by the discussions of the EDF committee and developed by the Commission. The Development Council of EC Ministers meets twice a year to decide on overall policy issues. The joint ACP-EC Council of Ministers provides a forum for policy dialogue between Ministers of the EC and the developing world.
Lomé IV looks to bolster the trade concessions enjoyed by the ACP states. The new convention retains all the generous provisions of its predecessor for ACP access to the EC market. Some further improvements have proved possible, and the United Kingdom, with other like-minded member states, pressed very hard indeed for those advances.
All ACP industrial products other than rum are already admitted duty-free. The changes to the rules of origin, which define what counts as an ACP product, will provide greater access for ACP goods. Such technical changes hardly make thrilling headlines, but they serve to stimulate processing and manufacturing industries, and help diversify the economies of ACP states. Some agricultural products are still covered by tariff or quota restrictions. Many of these are dismantled or reduced by the new convention. Examples are molasses and rice, on which the access restrictions are reduced, and the inclusion of a number of horticultural products previously outside the benefits of the convention.
Two agricultural projects of major importance are sugar and bananas, which has already been mentioned. The sugar protocol of Lomé IV maintains the position of the separate agreement, which was not renegotiated in 1989. As I said, the United Kingdom fought hard to ensure that the new banana protocol maintained preferential access. We are awaiting proposals from the Commission for the arrangements to apply to bananas in the single market, after 1992. We shall stand by our commitments, as well as taking account of consumer interests, trade policy considerations and the competition and efficiency objectives of the single market.
In extending the scope of the convention, I attach special importance to the human rights provisions. For the first time in Lomé, and among the objectives and principles of the convention, is an explicit statement of the link between development and respect for human rights. I warmly commend this linkage to the House. It will be backed up by the provision of funds to activities aimed at fostering and nurturing good human rights practices. This is not a question of aid donors imposing their will on recipients. It is a partnership, in which both sides recognise what is needed for sustainable development. The convention allows us to promote human rights and participatory development, through the funding of specific projects—for example, by strengthening public administration.
I am pleased that the EDF funds will now be allocated to many more non-governmental and decentralised groups in the ACP countries. Assistance channelled in this way can encourage the growth of greater participation in society, and of more pluralism. These actions will also exemplify our desire to see ACP-EC partnerships established at all levels, and not merely between Government representatives and Commission staff.
936 I should also like to mention the associated Community provisions for aid to member states' dependent territories. The overseas countries and territories, as they are known, will enjoy the same general trade regime as the ACP countries. Where provisions differ, it is right that they are more generous towards our dependencies. In parallel with EDF VII, over the next five years they will be allocated 140 million ecu of aid, a 40 per cent. increase over Lomé III, supplemented by 25 million ecu from the EIB's own resources.
The Lomé convention is the cornerstone of Community relations with the developing world. It is the product of a major effort of discussion and negotiation between the ACP and the Community. To establish an effective aid and trade relationship between the Twelve and such a diverse group of 69 ACP states, is, as I know from many hours of detailed work, no easy task.
The prospects of the ACP states can only be enhanced by the kind of arrangement contained in Lomé IV—liberal trading provisions offering real opportunities for ACP states, and the largest single Community aid programme. For their part, the Government will continue to work hard and constructively to make Lomé work well.
I believe that Lomé IV represents an important advance in the Community's relationship with the developing world, and I am confident that the House will share my view.
§ Mrs. Ann Clwyd (Cynon Valley)The fourth Lomé convention was negotiated at a critical time. It was concluded at the end of a lost decade for development within the African, Caribbean and Pacific and other developing countries, and at the beginning of a decade which will see great change. The completion of the single market, the implementation of any Uruguay round agreement and the development of central and eastern Europe will have profound effects on the European Community and on our relations with ACP countries.
In assessing the Lomé IV convention, we must not only compare it with its predecessor, Lomé III, but measure it against the needs of ACP countries in a new international environment. It must also be assessed according to the original spirit of Lomé—the spirit of innovation of 1973, when the first contractual partnership was entered into between north and south, explicitly recognising the interlinking of air and trade.
As the Minister made clear, compared with Lomé III, Lomé IV contains some significant improvements. The emphasis on the environment and human rights and the commitment to pay earlier and greater attention to the needs of women are much welcomed.
The convention talks of "decentralised co-operation", which should bring non-governmental groups into the process of development in ACP countries. The decision that most Lomé funds will now be given as aid, not grants, is eminently sensible, given the ACP debt burden. At least this Lomé convention mentions the debt crisis. Both STABEX and SYSMIN have been considerably improved; strict rules of origin have been slightly relaxed, new products have been added, falling exports to non-EC countries will be taken into account and their funds have been increased. Of course, those changes must still be implemented effectively, and I hope that the Minister will tell us what work has been done in that respect.
937 Lomé funds are disbursed very slowly. Little more than 20 per cent. of the Lomé III budget had been spent at the end of its five-year duration in 1989. Lomé IV includes new areas of co-operation, but DG VIII has no new staff to implement them. Can the Minister tell us how local communities who were never really consulted in the drawing up of the convention will be encouraged to participate in its implementation, and whether respect for human rights will be used only to hold up aid in cases of gross abuse, or will it be brought to the fore in programming for all countries?
Doubling the life of the convention with the renewal of the financial protocol in five years ensures continuity and guarantees Europe's long-term commitment to the ACP countries. At least the amount of money available for those five years has increased in real terms in comparison with Lomé III. The real increase of 20 per cent. to 12 million ecu is considerably more than the United Kingdom Government's negotiating proposal of 10 million ecu. Fortunately, other member states prevented the Lomé budget from going the way of the UK suggestion; but, when we look at the desperate economic straits in which many ACP countries find themselves, we must ask again, "Is this enough?".
The 1980s saw economic decline and profound human suffering across much of the developing world. In sub-Saharan Africa, average incomes fell last year for the 12th year in a row. With ACP countries relying on non-oil commodities for 60 per cent. of their exports, and prices of those commodities at all-time lows, the main cause of the economic setback is clear: added to the trade crisis is the debt crisis, and the result is that citizens of ACP countries are now threatened with another lost decade.
We need an imaginative response from both north and south in the Lomé partnership, based on a generous commitment by the EC. In the words of the ACP negotiators:
The fourth convention should be seen as a major instrument in arresting and reversing the economic crisis. in ACP states.But, in financial terms, the new agreement gives no more per person than the previous one.The ACP states themselves requested 15.5 million ecu for Lomé IV, but the Commission imposed its own last-minute offer, with no room for negotiation. That "take it or leave it" approach to the financial package sadly indicates a lack of genuine dialogue throughout the Lomé IV negotiations. The first Lomé convention was unique in its emphasis on partnership between north and south, but in these nogotiations the EC Commission clearly dictated the pace.
Last week, we heard that the Lomé ideal of partnership had been extended to the World bank and the International Monetary Fund. Under the new structural adjustment fund of Lomé IV, World bank conditionality is replacing dialogue between the EC and the ACP. When quick disbursing aid for import support was first introduced in 1987, the Commission promised that it would develop a distinctive European policy on structural adjustment.
According to article 244 of Lomé IV, social conditions culture and regional differences would all be taken into account. Food security, environmental protection and other developmental objectives would be supported and
the right of ACP states to determine the direction of their development strategies and priorities shall be recognised and respected".938 Yet only last week, the Commission announced that almost all the 1 million ecu structural adjustment fund would be handed over to the World bank's special assistance programme for sub-Saharan Africa. Countries without IMF or World bank programmes will not even be eligible for assistance. The ACP countries were not even consulted. That calls into question the whole basis of the Lomé partnership. How can article 244 possibly he implemented now?The preamble to the first Lomé convention talked of changing the north-south relations that were hampering development, and of promoting a
new, more just, and more balanced world order.The ideal—that huge gaps in wealth and power could be transcended by a new north-south partnership based on mutual respect—was trail-blazing at the time. That ideal was conspicuously absent, however from the Lomé IV negotiations. There have been improvements, but no major innovations, since Lomé began. As the EC-NGO liaison committee put it,
The spirit of Lomé is lost.Lomé IV bans the export of hazardous and nuclear waste from EC countries, and we welcome that, but a real model of north-south co-operation would surely include an agreement on the activities of all multinationals in developing countries. It would tackle the debt crisis and the international trade regime. Lomé IV unfortunately does not match that task.I will try to demonstrate that by considering the trade provisions of Lomé IV—in financial terms, 20 times more important to the ACP countries than aid. The increased concessions that the Minister described sound impressive, but let us put them into perspective. Some 75 per cent. of ACP exports are to the EC, so we are a vital trading partner. Only 10 per cent. of the exports receive preferential treatment under Lomé, and even those goods are still subject to many restrictions.
Most of the restrictions—particularly on sugar, beef and other essential export—survived the Lomé IV negotiations intact. It is true that the beef quota was increased from 30,000 to 39,000 tonnes per year, but to put that, too, into perspective, that would do no more than supply Sunday lunches in a couple of major cities. The tomato quota, fixed at 2,000 tonnes, is equivalent to about three hours' worth of EC consumption. Increased quotas for milk, cheese and curd sound fine, but in fact less than one tenth of 1 per cent. of EC imports of those products come from ACP countries. They are simply not significant ACP exports.
The changes will not provide the secure market access needed to encourage investment in the ACP. The EC rejected ACP requests for a special programme to improve the processing, marketing, distribution and transport of commodities. The simple industrial products that the ACP countries can most easily produce continue to be blocked by strict rules on value added, rules of origin and the exclusion of "simple assembly" manufactured goods.
Lomé trade preferences have not been able to prevent the increasing marginalisation of ACP goods in EC imports over the past decade. Lomé certainly does not address the changes that can be expected in world trade over the next decade. For example, 1992 and the single market are fast approaching. There is no doubt that exports from some of the poorest ACP countries will be squeezed by the single market even if exports in developing countries benefit. Fifty thousand banana workers in the 939 Windward Islands, and many more workers in the south Wales docks, will risk losing their livelihood if the preferential access given to their bananas disappears.
§ Mr. John P. SmithDoes my hon. Friend share my deep concern that Geest, this country's largest importer of bananas—currently importing two thirds of all the bananas consumed here—is contemplating moving from Barry, which is on the west of the United Kingdom, to the south of England? Does that not amount to a vote of no confidence in the maintenance of supplies from the Windward Islands?
§ Mrs. ClwydMy hon. Friend makes a valid point. Recently, he and I visited Geest's headquarters at Barry docks in my hon. Friend's constituency, when the concern of management and unions was made very clear to us. That source of employment at Barry docks is vital to the employment prospects of south Wales as a whole, which in the past 10 years has suffered very severely as a result of Government policies. Clearly, this is a matter of great concern to the whole of south Wales and, in particular, to my hon. Friend.
The arrival of 1992, the Gulf crisis, changing relations between the EC and eastern Europe, and the Uruguay round, may all have severe effects on ACP trade. The EC should be ready with structural measures to mitigate those effects. Such measures are not covered in Lomé IV, but I hope that action can still be taken to secure them before Lomé V.
Proposals tabled in the Uruguay round will erode trade preferences offered under Lomé in respect of ACP exports. For example, according to an UNCTAD study published last July, the EC-Uruguay offer on liberalisation of trade in tropical products would cut imports from sub-Saharan Africa by about $120 million, with trade being diverted to Latin America and the industrialised countries. Worse, the Uruguay round proposals present a threat which goes to the heart of ACP development, and directly contradicts Lomé principles.
The United States and the Economic Community are moving towards a deal on agriculture that would require the Governments of all developing countries to reduce their support for food producers. Protecting farmers leads to surplus and food mountains in the Economic Community, but in developing countries it can make the crucial difference between having enough to eat and going hungry.
Governments need to protect their farmers from food dumping and to encourage agricultural investment. With 29 million people in 25 sub-Saharan countries starving right now, surely no one can fail to see the importance of encouraging food security. How can the Economic Community talk in Lomé conventions of improving food security in ACP countries, and then support GATT proposals which would outlaw the very Government measures needed to achieve that security?
Instead of making a mockery of its own proclamations of concern, the Economic Community should observe the Uruguay round mandate, which recognises the right of developing countries to special and differential treatment. It should commit itself to GATT rules that outlaw dumping and, as the Common Agricultural Policy reform debate intensifies yet again, should seek to improve the 940 very ACP interests of which it talks so earnestly in the Lomé convention. Unless the Economic Community takes on board those wider economic issues, Lomé cannot possibly pretend to be the catalyst for re-ordering north-south relations.
At last, proposals to write off debt owed by ACP to the Economic Community under Lomé are being discussed, but still the Community opts out of taking a stronger role on international debt initiatives. It has not even established a joint framework for bilateral debt reduction. Commissioner Marin's proposal to cancel Lomé debts—about 1 per cent. of total ACP debt—is modest but important. It is a logical extension of the decision to switch to grants in Lomé IV and of the bilateral action of member Governments. Lomé IV commits the Economic Community. to
support ACP efforts to reverse the outflow of capitalandcontribute to the attenuation of debt burden.This is a good place to start.What position do the Government take? The Minister will probably say that the matter was discussed, has been referred and will be discussed again, just as she said that in reply to several parliamentary questions last year. It is shameful that hon. Members have to rely on the grapevine which operates between Brussels and London, often via other cities and organisations, to discover that the Government have been opposing Commissioner Marin's proposals to write off debts owed by the ACP.
Will the Minister provide details today of every vote—every nod and shake of the head—by United Kingdom Ministers and officials, on 5 November at the Development Council, on 3 to 6 December and 18 December at the General Affairs Council, and on 28 January at ECOFIN? If the Government's policy is defensible, there should be nothing to hide.
That is just one example of the lack of information and accountability from which all EC development policies suffer. We should not only debate the Lomé convention in Parliament once every five years—we should also debate the other half of EC aid to non-ACP countries. We should consider the reforms of food aid that are so desperately needed, the absurdly small amounts of aid which go to Asia, where the majority of the world's poor live, the need to improve monitoring and evaluation and to focus EC aid on the poor—a need made all too clear by the Court of Auditors report of 12 December 1990 on EC aid to Bangladesh. The report concluded:
The allocation of more than half a billion ECU between 1976 and 1988 to Bangladesh has largely failed to achieve the general Community aid objective of improving the conditions of the least favoured inhabitants of developing countries.The House will want to know as much as I do what action has been taken on that.Clearly, the spirit of all EC aid—not only Lomé—needs to be revived. There is growing incompatibility between EC objectives relating to aid, trade, agriculture, central and eastern Europe, and the single market. Within Lomé IV, articles which give priority to long-term, self-reliant development compete with sections on short-term structural adjustment. The Lomé partnership is collapsing back into dominance and dependence.
The spirit of Lomé demands imagination and political will. The ACP states have seen the Community display those qualities in taking the lead in the reconstruction of central and eastern Europe. As a Senegalese delegate said during the Lomé negotiations, the Community has already 941 promised $60 per head in aid to Poland and Hungary over the next two years, but will provide only $9 for each ACP citizen over the five yers of Lomé IV. The exact levels and terms of that aid may be disputed, but the political point is clear: Europe must reinvigorate and restate its commitment to development in the south.
Lomé IV has been described as the best that can be achieved in the present tight circumstances. That analysis may well be right, but it is no reason to be complacent. The challenge for both the EC and the ACP is to rebuild the spirit of co-operation between north and south to transform the very circumstances which constrained our co-operation and their long-term sustainable development.
§ Mr. Bowen Wells (Hertford and Stortford)There is much to be welcomed in the Lomé IV agreement. I particularly want to congratulate my right hon. Friend the Minister on the very constructive role that she played in negotiating and enhancing it. All the parties to the agreement, including the hon. Member for Cynon Valley (Mrs. Clwyd), have always had many misgivings about some parts of it. We all want the agreement to succeed, to be more dynamic, imaginative and helpful to the poorest countries with which the EC has traditionally been associated for many centuries. It is for those reasons that we want to improve the agreement.
I believe that many of the suggestions given to the House by the hon. Member for Cynon Valley are worthy of much greater and deeper study and implementation. The EC's 40 per cent. increase on the last Lomé III agreement is not enough but it is nonetheless an improvement, but before the EC pats itself on the back for that, I remind the House that the Community, through subsidisation of agriculture, does the third world much harm. It reduces world prices for commodities such as sugar, which could be produced in the third world.
When 3 million tonnes of sugar are put on to the world market, that reduces the world price of sugar, and thus the incomes for many people in the third world. The same is true of palm oil. When we look around in the spring and see the yellow fields of rape seed oil throughout Europe, we know that that is due to subsidies and that the people who will suffer for it are those in the poor countries that produce palm oil. There are many other such examples where the CAP severely undermines the trading ability of third world countries.
We could improve the European development fund and its administration in two sectors: first, the co-ordination of the EC's efforts with its 12 member countries and their own bilateral programme; secondly, co-ordination with other international aid organisations. Like the hon. Member for Cynon Valley, I welcome the adherence to the structural adjustment policies of the international monetary fund and the World bank, but they need to be modified and rethought. I am cynical about adjustment policies because, very often, they simply allow payment for imports for which they cannnot otherwise obtain foreign exchange. That does not promote wealth-creating development in those countries—it is simply a form of emergency aid. That does not help the changes necessary to help those countries overcome their economic difficulties.
942 There are problems with structural adjustment policies, but they present a means by which to co-ordinate the efforts of the EC, the World bank, the IMF and bilateral programmes. Therefore, I welcome the allocation of a significant sum of money for that purpose. But there is also major concern about the way in which EC delegates in the various ACP countries fail even to make inquiries about the way in which other countries, which have had bilateral programmes for many years, construct their aid. There is little assessment within the EC of the economic needs and how economies can be helped to grow. Therefore, the combination of efforts and talents that we in the EC, through bilateral and European economic aid, can co-ordinate with the private sector to enhance the development of those countries.
Time and again, I have visited countries and asked the European delegate what he knows about the programmes of the other 12 member states—the answer is often, very little indeed. I am sure that that could be easily rectified and I hope that, through its new organisation, the Community will pay it more attention. That would provide benefits at no additional cost and would aid those countries in a more constructive and imaginative way.
Another concern about Lomé IV is that there continues to be a major gap in ACP-EEC trade, despite all the apparently generous trade concessions that were given in that agreement, as in Lomé I, II and III. They are not taken advantage of by our ACP partners, and we must ask why. The principal reason is the rules of origin, although we welcome the fact that we have reduced the input necessary to qualify for tariff-free import into the European Community from 60 per cent. to 45 per cent. of the product produced by the exporting country.
However, I doubt whether even that will enable those countries to take advantage of the concessions. I refer to the smaller states—especially the island states—where much of the product is imported and only the labour is added. That means that few of the products will qualify for the tariff-free import into the Community. We must improve that, to enable those countries to make use of their most valuable and largest resource—their people's energy and ability to add value to a product which does not qualify for inclusion under the rules—even if the countries could understand the rules of origin which apply to many products.
One way to overcome the problem is to encourage wealth-creating investment from our private sector into those countries. A controversial proposition—although it is an idea in which I have always believed—is that, if those countries are exporting products to sophisticated western markets, they need to be able to benefit from the marketing profits made in Britain. In that way, they will benefit more than they do merely as producers and exporters.
External investment by the developed world will give the developed world a greater interest in ensuring that those economies work well. Equally, investment by the developing countries in the marketing sector of the developed world will give them an insight into what is required and into the standards needed successfully to market their products and give them a greater share in the profits from their efforts. In that way, we can begin to create a world that will enable them to benefit from the Lomé IV agreement. It is a good agreement, but it could be a good deal better.
§ 1.5 am
§ Mr. Bob Cryer (Bradford, South)I will concentrate my remarks on the technicalities of the order because, as Chairman of the Joint Committee on Statutory Instruments, I brought to the attention of the House the fact that the Joint Committee had reported the order. In the ordinary course of events, precautions are taken so that the Joint Committee has the opportunity to complete its examination of an order, under the terms of the Standing Orders of the House, which involves asking the relevant Department for a memorandum or memoranda, depending on the scale of our investigations. On this occasion, the arrangements appear to have fallen down.
I understand that the Government Whips, through the usual channels, offered not to move the order tonight, so that we could make a more leisurely report. However, I did not feel that that was right, because the Committee was able to finish its consideration and we were able to put our report in the Vote Office to enable hon. Members to take copies if they wanted. The Minister was able to make a comment on our observations.
I want to put on record our concern within our range of duties of reporting to the House about the unusual use of powers and the vires of orders. An important issue is involved. The Joint Committee is the only scrutiny Committee for the huge outpouring of statutory instruments by which the majority of legislative powers are applied to the United Kingdom and related organisations, such as those in the order.
We have no quarrel with the first item in the schedule to the order—the fourth ACP-EEC convention of Lomé. We are concerned with the second item in the schedule—the
Internal Agreement on the Financing and Administration of Community Aid".Both agreements are designated as treaties. When we asked the Overseas Development Administration for the reason why the internal financing agreement was designated as a treaty, it gave only one reason, which was not the reason that the Minister gave—it was politically a method of bringing the matter before the House.The Overseas Development Administration said that it was a means of bringing the treaty under section 2(3) of the European Communities Act 1972, and no other reason was given. It enables
expenses incurred under or by virtue of the Treaties or this Act by any Minister of the Crown or government departmentto be paid. That is an unusual way in which to describe payments to the 7th European development fund. As that is an unusual use of ministerial powers—I will come to the qualification that the Committee made—we sought to report the matter to the House. It is an important precedent.There is much talk of a European central bank. It would be wrong if the Minister used the powers under the European Communities Act 1972 to designate a treaty as a means of transferring funds to a European central bank. I hope that that bank never comes into existence, and I believe that it would have little merit. However, the Committee is not considering that. It is considering the way in which Ministers operate. We felt that the procedure set a principle that should not be followed.
In its memorandum, which we attached to our report, the Overseas Development Administration points out that it did not need the powers to bring the internal financing 944 agreement under section 2(3) of the European Communities Act 1972 to authorise payments, because it already has power under section 1 of the Overseas Development and Co-operation Act 1980. With that power to make payments to the development fund, it simply was not necessary to use the other powers. As our memorandum states, that seems to destroy the ODA's case for designating the treaty as a Community treaty. We therefore felt that the matter was of sufficient general importance to warrant being brought to the attention of the House.
We have the right to report something to the House on the basis of an unusual use of powers. I believe that the matter falls under that heading. However, our adviser suggested that, as the power had been used on three previous occasions, this could not be regarded as an unusual use of powers. However, that is a matter of debate. On the three previous occasions when the powers were used in that way—in 1975, 1979 and 1985—I was not the Committee Chairman. They must have crept by during one of the Committee's weak moments.
I place the Committee's concern on record, and I hope that the Minister can assure us that she will find some other way of bringing these important treaty arrangements to the attention of the House. I do not deny their importance or the valid criticisms made of them by my hon. Friend the Member for Cynon Valley (Mrs. Clwyd). This is not a satisfactory way of using unnecessary powers to incorporate something into the schedule of a statutory instrument. It would be at least as good to use the record of the proceedings of this place to explain the internal workings, instead of using what appears to be an abuse of the Minister's powers against which our Committee was established to safeguard.
§ Mr. John Battle (Leeds, West)On every occasion that the Lomé convention has been up for renewal since it was first signed in 1976, the situation facing the African, Caribbean and Pacific countries has proved to be bleaker in terms of development. My main job between 1979 and 1983 was to monitor the implementation of the Lomé convention. The task now facing the convention and the burden that is must bear is much greater than it has ever been. The debt burdens have increased, prices for key exports have been falling and there has been an increasingly unfavourable imbalance in trade with the European Community.
The fourth Lomé convention was signed in December 1989 and at last included a chapter on the environment. However, it took a year to negotiate between the member states and the 68 ACP countries. Although it will last for 10 years, as the Minister explained its financial package will be split and renegotiated after five years. We must put pressure on the convention now to ensure that it fulfils some of its original intentions. Within the context of the fourth Lomé convention, I want to refer, as a case study, to Namibia—the newest ACP member.
At the time of negotiating membership of the ACP, the focus was on Namibian beef. Although Namibia must still sort out who benefits internally from the beef quota, I want to draw the attention of the House to the current key issue—that of fishing.
945 On 11 March, Namibia will begin negotiating with the Community for an agreement on EC access to fishing. In the debate on Second Reading of the Namibia Bill, the Minister for Overseas Development acknowledged:
Namibia's fisheries programme is of great importance because it will provide a major source of income, as long as the fish are not stolen away … the area will then need the policing that it has not enjoyed until now. The income that Namibia will derive from that sector will be enhanced once a fisheries agreement is reached with the European Community."—[Official Report, 5 February 1991; vol. 186 c. 256.]While I welcome that statement, the problem is that Namibia's fishery resources have been plundered by illegal overfishing in both the in-shore waters and off-shore. An estimated minimum of 300,000 tonnes of the offshore hake resources are taken by overseas fleets, which amounts to a not insubstantial amount in monetary terms. There have recently been local accounts of Spanish boats plundering those resources. When approached by the coastguard patrols, they have fled into Angolan territorial waters, taking with them 500 tonnes of hake fillets.However, there is not only a problem with illegal plundering activities; there is also a problem of rebuilding the fish stocks that have been depleted under South African occupation. Furthermore, there is the question of the development of an integrated industry, which involves both the offshore and inshore fishing industries through the development of an indigenous fleet. If Namibian fish stocks were allowed to recover, there would be sufficient to enable the indigenous fleet to work in harmony and co-operation with the European Community fleet.
However, that objective might not fit so neatly with the current European Community objective, because the point of the European Community's fisheries agreement: has been to secure access for EC fisheries fleets to fishing grounds in ACP countries. In other words, the developmental objectives have tended to play a secondary role and to take a back seat.
Despite the reluctant concessions that have been built in with financial compensation in return for EC access, the pattern has been one of dominance rather than of genuine mutual integration for the purpose of development. In other words, the key aim of the EC has been to secure long-term access to internal fishing grounds for EC fleets. However, if that objective is to be faithful to the spirit and purpose of the original Lomé convention, it should be blended with the need for Namibia to develop its own fishing industry in a spirit of genuine partnership and co-operation.
I hope that the Government will support Namibia's need for immediate effective conservation measures that will allow full stock recovery. That may mean minimal or no legal access to Namibian waters for the rest of this year. It will certainly mean backing Namibia's method of stock conservation through the establishment of low total allowable catches.
There will be a need to assist Namibia's ability to monitor and control fishing activities in its own economic exclusion zone, as the Minister acknowledged in the debate on the Namibia Bill. There is also a need to maximise local processing and the development of an indigenous fleet, which would mean the transfer of technological resources and the provision of capital goods, going beyond mere financial assistance.
However, it is also politically important to put pressure on South Africa to withdraw from its continued illegal 946 occupation of Walvis bay, which is Namibia's only deep-water port. Namibia needs its main port. I hope that the Government will recognise the need for an early integration of Walvis bay into Namibia, and that the Minister will confirm that that will take place before the end of this year, and that it will include the 12 islands.
In conclusion, to ensure that positive support to the newest member of the ACP—and in the spirit of the Minister's backing for Namibia's entry into membership of the Commonwealth, which was welcomed on 5 February—we need to ensure that there will be an increase in the allocation of overall resources that will take account of Namibia's membership. Or will Namibia be effectively locked out from that five-year budget and depend upon waiting for EDF VIII to arrive later, when it is renegotiated?
Some have spoken in the past of the lost spirit of Lomé. It is true that the convention could be described as a story of missed opportunities to change the unjust balance of relationships between the north and south worlds, which has undermined development in the past. Attempts have been made to establish rules that would have helped to establish what was referred to in the preamble to the Lomé convention as
a new more just and more balanced world order.But in practice, the EC has tended to sign and then later undermine the realities of the agreement. For example, in the past, the European Community countries have used the loopholes in the international law of the sea to protect their fishing markets, rather than give the ACP fisheries fair treatment.Lomé set out a model for new relations between rich and poor countries. Tonight, the Minister referred to it as the cornerstone. The European Community needs radically to improve the performance of the Lomé convention in Africa. It could start by treating the Namibians as real partners in the fisheries negotiations. The Minister spoke of the testing early stages of independence and democracy for Namibia and of the liberal trading opportunities for the ACP. I hope that the British Government's and her voice will be heard when those negotiations open in March as it is a vital, practical test of the future effectiveness of the Lomé convention.
§ Mr. Mike Watson (Glasgow, Central)I cannot share the Minister's enthusiasm for the fourth Lomé convention. I recognise that parts of it are welcome, but when it was finally agreed in December 1989 after more than a year of negotiations, there was a feeling, particularly in the European Parliament, that the negotiations had been rather half-hearted. The way in which they progressed leads one to agree with that view.
The manner in which the EC countries approached the negotiations illustrated a thinly veiled scepticism about the problems and needs articulated by the African, Caribbean and Pacific states. It seems that the EC countries effectively put negotiating the new agreement on the backburner. They were more concerned with their own economic restructuring and intent on overcoming the many difficulties in completing the internal market for 1992. There were the further distractions of the GATT Uruguay round talks and the needs—which, I acknowledge, were legitimate—of the emergent democracies of eastern and central Europe.
947 It seems that many EC member states give higher priority to bilateral aid than to increased co-operation at EC level. In part at least, it is possible that that is due to the unconvincing nature of the first three Lomé conventions and their failure significantly to alter the north-south balance in terms of development.
As I said, I welcome some aspects of the new agreement. In particular, the link between development and human rights and the commitment to the environment and the needs of women are welcome. However, it has to be said that they are offset by shortcomings, especially on trade, where the concessions made by the EC countries fell far below what the ACP group sought. One instance of that is that the ACP countries' request for an increase of 30,000 tonnes of husk rice. They received an increase of only some 3,000 tonnes.
The agreement also fails to provide the ACP with a preferential trading regime for agricultural products that would allow many ACP exporters to invest in substantial production and distribution units or replace expensive subsidised EC products with competitive ACP products. Equally important, no provisions were made to stop EC dumping on ACP markets where it is a disincentive to local production.
On the crucial matter of debt, the agreement contains only a miserable few measures. They aim to avoid a worsening of ACP debt under the new convention and to give technical assistance for debt management and capital flows. But the EC refused initially to include the debt issue in the negotiations on the new convention. That ignored the fact that most ACP debt is owed to EC Governments and to private banks in the Community. However, Lomé IV contains no European commitment to take concerted action in international establishments or to establish an overall framework for bilateral arrangements that could assist the ACP in restoring their capacity to service their debt. Even the small debt to the Community was not written off.
Negotiations on Lomé IV failed to get to grips with the fundamental problem of previous conventions—the disappointing level of implementation and the poor results which emanated from it. It seems inconceivable that only 20 per cent. of the funds of Lomé III were spent during its five-year duration. That shows an endemic problem in the relationship between north and south. The EC countries still do not seem to have grasped the scale of the structural problems facing ACP countries, particularly in Africa, where there are desperate problems.
The serious deterioration of circumstances in ACP countries since the Lomé conventions began in the mid-1970s is also revealed. There was a fall of 64 per cent. in purchasing power of the convention's signatories in the five years of Lomé III alone. Lomé IV failed to address that problem also. The distribution of the resources and wealth produced in the developed world must be complemented by maximising the contribution which can be made by the underdeveloped world, if given the chance. Until debt cancellation and the real encouragement of preferential trade agreements are pursued by the EC with conviction, something which has not been shown in the negotiations or in the final document of Lomé IV, the 948 status of Lomé will be further downgraded so that it becomes perhaps just one donor among others. Surely the ACP countries deserve better.
§ Mrs. ChalkerWith the leave of the House, I should like to respond to the debate.
I had hoped that the hon. Member for Bradford, South (Mr. Cryer), who chairs the Joint Committee on Statutory Instruments, might have been able to join us again, but perhaps I had better put these remarks on the record. What he said was important, following the consideration of the documents by the Committee.
I want to assure the hon. Member, as I think he recognises, that in tagging the document on the internal financing agreement on to the debate, I do not believe that we have set a precedent in any way. As I said in the early part of my opening speech, I had intended this to be a belt and braces exercise, to make sure that, when the House discussed Lomé IV, hon. Members would have full knowledge of all its aspects.
The worry of the hon. Gentleman about a transfer of moneys to a putative central bank would be more realistic if I had hidden my intention. My aim was exactly the opposite—to get everything on the record and to discuss everything together. I hope that the hon. Gentleman, who has rejoined us, will read in Hansard my first remarks in reply to the debate.
In order to permit Lomé IV to become operational, member states must ratify both the Lomé convention and the internal financing agreement. It is for us to determine how in the United Kingdom we should do that. That is why I recommended to Parliament the procedure for full consideration of all the elements making up the convention.
Lomé is unique. The member states and the European Community are partners to the convention, whereas only the member states contribute to its funding by virtue of the internal financing agreement. The agreement is a separate treaty and could, of course, have been laid alone before the House to satisfy the Ponsonby rule, but that would have deprived the House of the opportunity to consider the internal financing agreement in its proper context and would have denied the intrinsic link between it and the Lomé convention. We adopted the unusual course of bringing it before the House so as to be as open and consultative as possible.
§ Mr. CryerWhile I am grateful to the Minister for her response, I suggest that when in future she wants to make an explanation of that sort, she should include it in the memorandum submitted to the Joint Committee on Statutory Instruments. We did not have any idea of the reason she has given.
§ Mrs. ChalkerGiven the number of explanatory memoranda that I am signing, I did not think that the hon. Gentleman would have wanted more from me. I shall ensure that they are as full as I can make them, keeping him up till even later hours considering such matters. I shall, so far as I am able, provide the fullest possible explanations.
A number of hon. Members expressed concern today about what they see as the loss of the spirit of Lomé. I hosted a visit during the past week by Dr. Bahane, the secretary-general of the ACP countries. He believes that 949 Lomé IV represents a significant step forward and acknowledges the important role that the United Kingdom has played in bringing that about—a subject to which shall return.
In this short debate, we had a rather one-sided view from the hon. Member for Cynon Valley (Mrs. Clwyd). I have always seen the 1990s as an opportunity for Lomé countries. They can participate in 1992 and I have particularly argued with the European Commission that they should be helped to benefit from it. I believe that Lomé IV can help to stimulate growth for their products in the European Community market.
The 1990s provide an opportunity to conclude and implement GATT properly, and the hon. Member for Cynon Valley will recall my saying on 14 December how important a successful end to the GATT negotiations was for the ACP countries. But above all, we can build on the special ACP-EC partnership which has developed in implementing the wide-ranging and increased Lomé IV.
I said that Opposition Members had been characteristically negative in their remarks. That goes for the hon. Member for Glasgow, Central (Mr. Watson). There was nothing half-hearted about the long and detailed de bates which led up to Lomé IV—the largest ever commitment of the EC countries, and rightly so, to the ACP countries. When I visit ACP countries and discuss the detail of i t with them, we talk about how they can better use EC assistance, and they talk about that with enthusiasm.
None of those ACP countries would recognise the image that the hon. Member for Cynon Valley painted of Lomé IV. I assure her that nothing is collapsing and that we are increasingly working together. That applies to the member states and the Commission, the Community and the international financial institutions, and the Community and the ACP countries.
The hon. Member for Cynon Valley and my hon. Friend the Member for Hertford and Stortford (Mr. Wells) spoke about effectiveness, and my hon. Friend spoke of the need for donor co-ordination and the need for links between bilateral donors and EC delegates. Regarding effectiveness, the Commission is looking to the United Kingdom's knowledge and experience of aid planning to help it in the future programming of European development fund funds. It is also looking to us for evaluation methods of project proposals, and the new EDF rules will permit member states to evaluate effectiveness. Hon. Members will know that for a long time I have believed that to be necessary. I am glad to say that the Commission now has a new evaluation unit and that a much fuller use of evaluation work is planned.
It is also important that the Court of Auditors, which carries out annual reviews of aid implementation and makes recommendations for improving value for money, should be able to refer to such evaluation plans. That is why member states are considering the improvements suggested in the auditors' report for 1989, and that could prove valuable.
The hon. Member for Cynon Valley spoke of the slow disbursement rate of EDF VI. The Commission is aware of the problem. We would not have allowed it not to be aware of that. The main sector for aid under Lomé III, as the hon. Lady will recall, is agriculture and rural development. Both are inevitably rather slow in disbursing parts of the programme. It is not justifiable to steer away from these identified priorities simply to speed up disbursement. However, measures must be taken to speed it up, and we 950 are encouraging that with the European Commission. The sectoral import programmes under the structural adjustment facility are fast disbursing and they will help to step up the disbursal rate of EDF VII. They will be able to give the balance of payments support that so many of those countries badly need.
My hon. Friend the Member for Hertford and Stortford asked about donor co-operation. He will probably be aware that British high commissioners and ambassadors in ACP countries are encouraged to call together ambassadors from Community countries, and frequently from other countries, to discuss with the EC delegates what they are doing and how they can reinforce programmes of economic reform and structural adjustment, health care and education, and the other matters that we most value in the programmes in which we are involved.
I am glad to say that co-operation is working rather better than it did a few years ago. Nevertheless, there is a long way to go, and one of the frequent topics of conversation when I meet the Commissioner and his senior staff is how to get better co-ordination on future projects between EC partners and other main donors and EC delegates. We shall set about that with great enthusiasm in the years ahead.
The hon. Member for Cynon Valley implied that there was some secret about ACP debt and our discussions on the subject. I assure her that that is not so. When Commissioner Marin first presented his proposals to the Development Council on 5 November, I willingly undertook to consider them carefully. It is my view, and the view of other member states, that the proposals need a good deal of further work to ensure that the poorest countries benefit—exactly what the hon. Lady asked for—and that the current arrangement for dealing with debt are not undermined.
The poorest and most debt-distressed countries which are following economic reform programmes deserve the encouragement that we can give through the structural adjustment measures which are included in Lomé IV for the first time. Every donor country agrees that we must be sure that the proposals do not cut across the current international machinery for dealing with debt. No decisions have been taken. As I reported to the House after the Development Council meeting, consideration continues, and we intend to see that this is made to work.
Britain has forgiven official aid debt to the poorest in our aid programme, and we aim to view the Commission's proposals in exactly the same policy context of helping those countries to help themselves. The debt under Lorne conventions covered by the new debt proposal is about 3,900 million ecu over 50 years. The United Kingdom's share of that is estimated at about £500 million.
The hon. Member for Cynon Valley referred several times to structural adjustment. She seemed to imply that the Community would be able to work independently of the World bank and the IMF. There is no merit in the European Community, the World bank and the IMF having competing policies. We should work together to reinforce each other's efforts in these countries. As the hon. Lady may know, the Bretton Woods institutions, with their special expertise, play a special role. That means that the Commission, like bilateral donors, should play a supporting role, and we hope that it will do that. 951 The EC decisions on debt followed consultation with individual ACP countries, so it has not been a matter of the Community going off on its own and not consulting.
The hon. Lady also referred to the lack of staff to implement Lomé IV. Expertise is gradually being built up in DG8. I fully accept that there are insufficient specialists in certain areas. That is why Britain has seconded environment specialists to the Commission to work in DG8 and link up with the environment directorate-general. We have also just seconded a United Kingdom economist to DG8, to deal particularly with structural adjustment, and other staff are going to build up exactly the work that has to be done under Lomé IV.
The United Kingdom is committed to a liberal stance on trade because we believe that to be to the benefit of all ACP countries. We have been leading the call for CAP reform. The solution to unfair Community exports in third countries is not to commit them to aid but to tackle the unfair export competition by the EC, and that is exactly what we are doing in GATT.
One hon. Member—the House will forgive me, but I do not remember who—was rather confused by the EC tropical products offer. That has been widely recognised as a good contribution to the needs of developing countries, but like the hon. Member for Cynon Valley I would have liked more trade concessions. We fought hard for greater trade concessions, but sadly not all my colleagues in the negotiations were as willing as I to see greater trade concessions to ACP countries. However, I must exonerate the Dutch from that blame, as they were extremely helpful in trying to open up more trading possibilities for the ACP countries.
This has been a short but good debate. We see the chances of 1992 for the Lomé countries as an opportunity. A single market of more than 320 million consumers, only 952 one external barrier and one set of standards, must make it easier for ACP countries to export to us. The benefits of going to the international trading system which are generated by the Community's new economic dynamism will be a major force for a general liberalisation. We shall go on pressing the Commission to take account of 1992, in all its programming of Lomé IV.
I will repeat something that I said briefly at the beginning about bananas—a very special commodity for our Caribbean friends. Our long-standing commitment to the traditional banana suppliers in the Caribbean will not be changed. We fought hard in the Lomé renegotiations to ensure that effective preferential access arrangements were maintained for the traditional suppliers. The commitments are enshrined in a protocol to the convention, and I assure the House that we shall uphold those commitments when we consider what arrangements should apply to bananas in the single market after 1992.
As I said earlier, the Commission has still to come forward with its proposals, but the arrangments must take account of our commitments to our Commonwealth Caribbean suppliers, of the trade policy considerations, the interests of consumers and the competition and efficiency objectives of the single market initiative.
We are committed to getting on with the job and to ensuring that Lomé IV is even more effective than Lomés I, II and III and the Yaoundé conventions before them. I am convinced that the Commission has the will. It may need a few good ideas from its member countries about how best to act, but together we can deliver a much better deal in the 1990s than we were able to achieve in the 1980s.
§ Question put and agreed to.
§
Resolved,
That the draft European Communities (Definition of Treaties) (Fourth ACP-EEC Convention of Lomé) Order 1991, which was laid before this House on 29th January, be approved.