Latin America

HC Deb 18 October 1995 vol 264 cc263-85

Motion made, and Question proposed, That this House do now adjourn.—[Mr. McLoughlin.]

10.4 am

Mr. Jacques Arnold (Gravesham)

I am most grateful to you, Madam Speaker, for granting this debate on Britain's relations with Latin America. This is the eighth successive annual debate on Latin America and it is the only such debate that this House holds on regions of the world.

The debate brings together members of the all-party British and Latin American parliamentary group. We have here our chairman, my hon. Friend the Member for Wycombe (Mr. Whitney), many colleagues on both sides of the House, my hon. Friend the Member for Upminster (Sir N. Bonsor), the Minister of State, Foreign and Commonwealth Office, and the Opposition spokesman, the hon. Member for Stretford (Mr. Lloyd), to stress this morning the importance of the region.

Latin America, stretching from the Rio Grande to Tierra del Fuego, contains 8 per cent. of the world's population. It has outstanding potential, abundant natural resources, skilled work forces and few of the extremes of poverty with which we are so familiar in Africa and in Asia. Above all, Latin America has a close cultural identification and rapport with Europe.

I sometimes think that we in this country overlook the considerable weight of the region and its component countries. How often do we remember that the region as a whole economically outweighs Africa, the Indian sub-continent and south-east Asia all put together? Furthermore, the individual republics are powerful economies in their own right. How many of us realise that Mexico alone has a greater gross domestic product than those of Sweden, Hong Kong and Nigeria put together?

The economies of the neighbouring republics of Venezuela and Colombia are, together, almost as large as that of South Africa, a country that occupies this House greatly. Chile alone almost equates to either Malaysia or Singapore. Brazil, on the other hand, has an economy equal to that of Spain and its Sao Paulo state alone has a similar GDP to that of Belgium. Not to be outdone, Argentina, with its GDP of $250 billion, is rapidly catching up with Australia. So we are not talking this morning about lightweights or about the backwoods.

Britain has long taken a leading role in this region. In every debate over the past eight years, I have highlighted how, in the House of Commons on 12 December 1826, the then Foreign Secretary, George Canning, referred to Britain's role in the independence struggle in Latin America, declaring that Britain had—I quote from Hansard— called the New World into existence to redress the balance of the Old. It is, therefore, with pleasure that we noted the stress on the transatlantic free trade area in the speech to the Conservative party conference last week by the current Foreign Secretary and, indeed, the similar point made by our right hon. Friend the Prime Minister at the same conference. Indeed, the Prime Minister is the first serving Prime Minister of this country to have visited Latin America. His visits to Colombia and Brazil for the earth summit were very popular. I hope that they will be the first among many visits he makes to this important region.

It gives a perspective to look at our first regional debate on Latin America in 1988, which I also had the honour of opening. At that time, we covered the general agreement on tariffs and trade, British trade, the Falklands crisis and the teaching of the Spanish language in Britain. The hon. Member for Islington, North (Mr. Corbyn) lauded Nicaragua and condemned Chile. How things have moved on! Today, democracy has broken out all over Latin America, with the depressing exception of Cuba. Privatisation and sound finances are the objective and frequently the achievement of so many of the republics. I sometimes think that our debates have become dull, even if most worthy, with the departure of the ideological battles that used so to excite the House when discussing Latin America. Both Chile and Nicaragua are proud democracies with directly elected presidents, and our debates are dominated by economic management, investment, trade and cultural relations.

The affairs of the Falkland Islands remain a concern of particular interest to the House. We have made considerable progress over the 13 years since the south Atlantic conflict—a tragic conflict, and so unnecessary, pitting friend against friend. This country remains committed to the principle of self-determination, and the Falklanders clearly remain committed to self-government under the Crown.

Before 1982 a position leading to a constitutional link with Argentina might have been possible, but as a result of the conflict such a link is impossible, certainly for the present generation of islanders. The Argentines have only themselves to blame, if only for allowing their military rulers to commit such irresponsible folly.

Argentina must understand that our commitment to self-determination precludes any of their ambitions concerning sovereignty. We have no hang-ups over relinquishing sovereignty; our loss of sovereignty over the real estate of Ottawa, Sydney or New Delhi are proof of that. But we stand firm over the legitimate holding of sovereignty and its transfer only in response to democratic will. Any misunderstanding of the view of the House, and in particular the view of those of its Members who are genuine friends of Latin America, would serve only to repeat the tragedy.

Nevertheless, we are admirers of the profound good sense of President Menem in setting the sovereignty dispute to one side and developing the rapidly strengthening bilateral relations. Over the past year alone we have had the presence in the House of both the Foreign Minister, Guido di Tella, and Eduardo Menem, the President of the Senate. Their visits, and the warm reception that they received from colleagues on both sides of the House are a testimony to the excellent relations that are developing.

There are many other examples of the growing relationship between Argentina and Britain. The fourth Argentine-British conference was held in Keble college, Oxford last month, bringing together politicians, business men and journalists not only from Britain and Argentina but from the islands. At such conferences it is moving to see the way in which the wounds inflicted 13 years ago have been overcome, and two great nations are being brought back together.

We must press ahead with the co-operation between Britain and Argentina. That is why I welcome the working agreement on fisheries, and the recent agreement on oil exploration. There are wonderful prospects for co-operation between the islands and Argentina in developing oil production. Clearly Argentina can contribute greatly to, and benefit from, the support infrastructure that the oil business will require. It seems to me that that would be best located on the mainland of Argentina; the challenge for the islanders is to obtain the financial benefits of the oil industry without sacrificing either their outstanding environment or their unique way of life.

In the time available it is not possible to cover the events of the past year in each of the republics. Suffice it to say that considerable progress is being made. Both Brazil and Argentina have made great strides in throttling inflation. That has been accompanied by significant social costs, but the forecast of 5 per cent. growth in Brazil puts the matter into context.

The courage shown by the Government of Colombia in dealing with the scourge of the drug trade is most welcome, and I am delighted by the discreet and effective support given by Her Majesty's Government in that fight. The maturity of the Latin American nations today is best exemplified by the way in which they have helped Peru and Ecuador settle their frontier dispute.

Bolivia's economic and privatisation progress is commendable. We wish Chile success in carrying through peaceful constitutional reforms that will build further on its remarkable economic record. In Peru progress continues to be made with the economy and in the battle against the perennial challenge posed by the Sendero Luminoso, a terrorist movement, and its heirs.

Both Venezuela and Ecuador suffer from instability, and I hope that by next year's debate, if you are kind enough to grant one, Madam Speaker, we shall have seen considerable progress in those two republics.

In recent years much has been said in the House concerning the tragic situations that developed over a long period in central America, and it is probably a blessing that we no longer see that region on our television screens. That seems to suggest that quiet progress is now being made.

Cuba remains, having still to make the great leap into the new Latin American era of proper democratic elections. Nevertheless, progress is being made on the basis of liberalisation and trade, even if the legacy of communist restrictions and controls inhibits faster progress in the island.

The key issue of the year for Latin America holds an uncanny echo of events in Europe. The continent is groping forwards to a new era of trading blocs. Mexico has enveloped itself in the North American Free Trade Agreement, with dramatic consequences. Other nations, notably Chile, are toying with the idea of joining.

Brazil, Argentina, Paraguay and Uruguay have joined together in Mercosur, which is making significant progress. Established as recently as January this year, the organisation covers 200 million people and a GDP of $700 billion. Progressively eliminating internal barriers, it presents remarkable opportunities, especially for British investors and traders.

Last month Mercosur concluded a successful negotiation with the European Union, providing for an agreement that will lead to a free trade treaty. I welcome that, and look forward to ratification at the summit of European Union and Mercosur leaders in Madrid on 15 December.

That raises early echoes, perhaps parallel echoes, of the Foreign Secretary's references to a transatlantic trading community. The most significant aspect of my right hon. and learned Friend's scene-setting both at Chatham house and subsequently at the Conservative party conference was his vision of a close transatlantic free trade area between NAFTA and the EU, in which Britain can play a great part. He will know, of course, that a more accurate and ample vision is that of an association between Europe and all the Americas, covering an area that shares a common cultural and economic heritage. I hope that the debate will do much to stress the fact that not only North America and Europe alone but all the Americas and Europe should be the basis of that new and exciting development in British foreign policy.

We bring to that vision of a transatlantic free trade area a powerful political, economic and cultural inheritance, involving not only the United States but Latin America. Britain can play a vital part in those developments, drawing on our strengths. With the inheritance of George Canning, of the Legion Britanica, which served with Bolivar, of Admiral Cochrane in Brazil and Chile, and of decades of investment in the public services, industry, trade and commerce, we are well placed to play a pivotal role in the developments in transatlantic policies now arising.

Canning house, the outstanding Latin American centre in London, recently celebrated its 50th anniversary, and it plays a significant role in developing trade, investment and cultural links between Latin America and Britain. London is in so many ways the first port of call for Latin Americans to Europe, and it is vital that those relationships, both commercial and with the city, are developed and strengthened by every means and every assistance that the Government can provide.

Ministerial visits in both directions have increased phenomenally in recent years. I hope that there will be many more such visits, and that President Cardoso of Brazil will make an official visit to Britain next year. I look forward to a year of success and further development of our relations with Latin America, and the House will wish my hon. Friend the Minister of State well in his new role as Minister responsible for Latin America.

Latin America shares with the Pacific rim the prospect of being the focus of the 21st century. I hope that this debate will add impetus to Britain's participation in that great potential.

10.19 am

Mr. Jeremy Corbyn (Islington, North)

It is difficult for me to follow the hon. Member for Gravesham (Mr. Arnold), as I found little with which I could agree in what he said, and his interpretation of history should be filed under "Sycophantic". The idea that Britain was the mainstay of the Latin American independence movement rather ignores the roles of Simon Bolivar and many other people, and turns history on its head. The hon. Gentleman also failed to mention that while George Canning might have been in favour of independence for the Spanish colonies, he certainly did not exert the same influence when it came to British colonies or British and other European imperialism.

The House may have noticed an early-day motion in my name deploring the fact that General Pinochet visited Britain two weeks ago. Conservative Members might well smile about that, but their party was the mainstay of his regime during his reign of terror in Chile when the British Tory Government were happy to supply him with arms. I want to put on record my disgust, and the disgust of many other people, that such an evil man was allowed to visit this country and be feted and allowed to do business with British companies to buy arms. General Pinochet authorised the murder of the elected president of Chile in 1973 which led to the reign of terror in which thousands of people disappeared. There are many grieving families in Chile still looking for missing relatives who they know are buried in unmarked graves somewhere in that beautiful country.

While I recognise that things have changed in Chile, which now has an elected Government and President, there are still some flaws in the constitution. Pinochet is still the head of the armed services, and he is able to appoint people to the senate and travel freely around the world. Frankly, he should answer for the crimes he committed against the people of Chile and for the human rights abuses which occurred during his period of control in Chile.

We are talking about a continent which is fascinating and extensive, and it is difficult to cover all the matters relating to Latin America in a short debate such as this. In his little tour of Latin America, the hon. Member for Gravesham failed to recognise that the United States has always sought to dominate Latin America through the Monroe doctrine. The hon. Gentleman ignored that completely, and spoke as if the whole continent was some kind of ex-British colony. In fact, the United States has the dominant hand throughout the continent.

In the past two years—particularly since the introduction of the North American Free Trade Agreement between Canada, the US and Mexico—we have seen the true face of the United States and what it wants to do. The US wants to make Mexico a cheap labour pool for the—[Interruption.] I do not know why the hon. Member for Gravesham finds this so funny. On his next free trip to Latin America, the hon. Gentleman should visit some of the shanty towns outside the capital cities in the region, and he will then see what structural adjustment programmes, the IMF and the World bank are doing to the poorest people of the continent.

In Mexico, the NAFTA is forcing down wages, creating a vast amount of unemployment and encouraging cuts in public expenditure, and the lot of the poorest people in Mexico is very serious. The recent rising in Mexico and the role of the Mexican army in attempting to control that uprising are symptoms of the anger that many people feel about the loss of their land and livelihood and about the way in which multinational capital increasingly controls their lives.

While the results of the changes in Haiti have been mixed, one must recognise that the agreements increasingly being reached in the Caribbean basin by the United States and by United States companies are resulting in the most appalling exploitation of people in that region. The hon. Member for Gravesham mentioned Cuba. While he and I would probably diametrically disagree on much of what has happened in Cuba, the hon. Gentleman must recognise that there is a universal free health service in Cuba, unlike any other country in the region. There is a universal free education service in Cuba, unlike any other country in the region. There is more or less full employment, despite the present blockade.

Cuba has been abominably treated by the United States since 1959. First, Cuba suffered several years of military attacks and military blockades, and there has been an economic blockade for more than 30 years. It is amazing that the Cuban economy has survived at all. While the British Government have never endorsed or taken part in the economic blockade of Cuba, I hope that they will at least put pressure on the United States Administration to lift the blockade of Cuba, which is causing incredible suffering. The blockade is making it difficult for the Cubans to restructure their economy to produce more of their own food or to export medicines, as the Cuban health service is the envy of every country in Latin America.

The economic problems facing so many countries in the region—particularly the former British colonies and the others which have gained independence in the past 30 or 40 years—are now serious. I have received a letter from Father Bobby Gilmore, who used to be a priest at the Irish chaplaincy in Islington and has gone to preach and live in Jamaica. He wrote a nice letter, asking me to press the World Bank and International Monetary Fund to cancel debt owed them by the poorest and most debt burdened countries … Many severely-indebted countries accept World Bank and IMF structural adjustment loans, because these loans provide the international currency countries need to pay their foreign debts. These practices, in fact, underline the economic health of the borrowing countries by bringing about lower wages, deteriorating educational systems, and reduced medical care … What I am witnessing daily here in the Jamaican countryside is general decline in those areas of life, particularly in education, which put democracy and general human wellbeing at risk. Violence is on the increase threatening the tourist industry and other possible investment. The letter ended by urging me to do something to "prevent modern slavery" which is what Father Gilmore believes the conditions imposed by the IMF on the poorest countries of the region to be. There are problems throughout the region, and the economic solutions are being increasingly imposed on countries by the IMF and the World bank. Britain is a major participant in these organisations, and we have a voice on the governing bodies of both of them. But I hear few arguments that the structural adjustment programmes being imposed on countries to encourage an export-led solution to their economic problems are resulting in people paying a terrifying price, with the loss of their social structures, high levels of unemployment and low levels of wages.

Recently, I attended a conference on central America, where I heard a fascinating talk by Victor Hugo Tinoco, the international relations secretary of the Sandinista front in Nicaragua which lost the elections towards the end of the Contra war, on the situation in Nicaragua today. I quote from the briefing which accompanied his talk: 70 per cent. unemployment, crumbling social services, local production destroyed by a flood of cheap foreign imports, lack of credit for small farmers producing for domestic consumption, rising malnutrition and illiteracy and 40 per cent. of the population living in acute poverty. When the Sandinistas were leading the Government of Nicaragua, health care, education, housing and employment all improved, despite the US-supported war against that Government. One must ask what that war was all about. Was Nicaragua such a threat to the United States? It was no threat whatsoever. There never was a military threat from Nicaragua to the United States, any more than there is a military threat from Cuba.

It is the threat by example that the United States could not cope with, and that is why so much money and effort went into destroying the achievements in that country. What is now happening in Nicaragua, El Salvador and Guatemala is that a large number of demobilised soldiers from the national army, or demobilised Contra and other guerillas, are looking for work and an existence, but all that they have are the weapons left at the end of the war. So a number of illicit bands are roaming around those countries, causing mayhem, crime and all the rest—something that will get worse.

We must take the problems there seriously, or there will be a complete breakdown in society as a whole. That can be avoided only if sufficient aid and real support are given for a democratic process, and I do not call the imposition of structural adjustment programmes by the International Monetary Fund any part of the democratic process as I understand it.

There is a similar position in El Salvador, where the United Nations happily was able to negotiate a peace accord and bring about a ceasefire and the development of democratic politics—something that must be seen as wholly welcome. Unless support is given to the agricultural economy of El Salvador, however, people will continue to flood from the countryside to the shanty towns around El Salvador and the other cities and unemployment will continue to grow. All the conditions that led to the civil war in the first place will return with greater vengeance and there will be an even greater collapse in society than there was then.

It is all very well for Conservative Members and, indeed, the United States, to say, "Hang on a minute. We now have quasi-democratic Governments installed in virtually every country in Latin America." The problems of the human rights abuses, which were caused by the destruction of social systems, are very serious.

A Peruvian woman came to my advice surgery last week to ask what could be done about her husband, who had been arrested in Peru. He is not involved in military activity of any sort—either in the Tupac Amarù brigades or the Sendero Luminoso—and totally deplores what they are doing. He was speaking out against unemployment, poverty and so forth and was accused of being a member of Sendero. He was beaten and tortured by the police and is now in prison, in a very serious situation. Because of the way in which martial law effectively operates in much of Peru, his human rights and rights to any decent judicial process are limited, if not virtually non-existent. That is the price that is being paid by ordinary people in countries throughout the region. I do not want to over-generalise as I am talking of the situation in Peru.

While one welcomes any progress towards a genuinely democratic society, to have such a society human rights must be guaranteed for all people. Clearly, they are not. One has to have the right to work, to be educated and to have a decent health service, which is also part of the process. Generally, democracy does not come at the hands of multinational corporations or a visit from the IMF and t0he World bank.

Likewise, the situation in Guatemala is very serious, as I think that my hon. Friend the Member for Stretford (Mr. Lloyd) will mention later, when he speaks for the Opposition. While there has been a reduction in violence since the height of the war, the armed forces and the police, who were unaccountable during the worst days of the problems, are still unaccountable and abusing human rights. The very perpetrators of all those human rights abuses are still at large and anyone who speaks out against them is liable to receive a bullet in the back of the head on a dark night for daring to do so. That is the reality of the life of ordinary people who do not accept that it is right for so many to live in such appalling poverty.

Latin America is a huge subject and I do not want to detain the House any longer, save to say that these debates are very welcome because they at least give us an opportunity to mention important points about economic relations between western Europe, north America and the peoples of Latin America.

I have one question on Antarctica for the Minister and I would be grateful if he could answer it when he replies to the debate. Has he reached any agreement with the Argentine Government about the siting of the secretariat to carry out the functions of the Antarctic treaty that was negotiated and endorsed by the House a couple of years ago?

10.33 am

Mr. Ray Whitney (Wycombe)

I think that I speak for the rest of the House in saying that the contributions of the hon. Member for Islington, North (Mr. Corbyn) would be greatly missed if we were not given the benefit of them because he brings to these debates a consistency and a whiff of nostalgia that are distinctive. He has the consistency of having been wrong in virtually every forecast that he has made in such debates and he brings us a nostalgic whiff of the totally discredited Marxism of the 1960s, which brings happy memories for those of us who used to read what was then called the New Statesman, but have learnt better sense. His other contribution is to remind us that, despite the efforts of the Leader of the Opposition to paint the picture of new Labour, old Labour is alive and well on the Opposition Benches and marching firmly in the wrong ideological direction.

May I return from the world of the hon. Member for Islington, North to the real world, and add my congratulations to my hon. Friend the Member for Gravesham (Mr. Arnold) for yet again—the eighth time—giving the House the opportunity to discuss this subject. Small though the numbers of Members present in such debates are, the debates are significant and have some contribution to make to Britain's relations with Latin America.

Today, I hope that we can awaken a stronger understanding of the opportunities for British business in Latin America. That is the aspect on which I shall dwell in the few minutes available to me. On the whole, the year since our last debate has been a good one for Latin America. Inevitably, there have been ups and downs, as in every other part of the world, on most of which my hon. Friend the Member for Gravesham touched with his profound knowledge.

As I want to concentrate on the economic aspects, I must highlight the upset in the Mexican economy in January. The important point was how quickly the whole of Latin America recovered from what was undoubtedly a serious shock. That was in significant contrast to what happened in 1982, when a severe setback in the Mexican economy had long-lasting ramifications throughout the region, which has not been the case this time. Recovery is well under way in Mexico and the rest of the region has not been affected to nearly the same extent. There is evident attachment to free-market, liberal economies, with all the pressures that those undoubtedly cause. The medicine is not pleasant. Indeed, it is painful, but the results are beneficial, as everyone in the rest of the world knows, with the exception of a few lost souls, one of whom—the hon. Member for Islington, North—spoke just before me.

This year, there were elections in Argentina and Peru, which demonstrated that those Governments, who are dedicated to such difficult free market economic policies, have democratic support. The political and economic outlook for Latin America is favourable for stability and for commitment to the democratic process throughout the region, although there are various problems. I hope that Cuba will come into line before very long.

The economic outlook is particularly encouraging. I must draw the attention of the House to the World bank study completed earlier this year, which predicted that the region's economy as a whole could grow at … 6 per cent. a year between 1998 and 2005, provided that governments learn the lessons of the Mexican upheaval. Let us consider the statistics that my hon. Friend the Member for Gravesham gave on the economic power that Latin America already possesses, which most people in the rest of the world underestimate. Add to that the growth prospects that the World bank thinks that the region could achieve and one has a challenging and interesting market.

Of course, it is a two-way market. Believers as we are in the benefits of free trade and investment—certainly on the Conservative side of the House—we are talking about a two-way, everyone-wins development and we must concentrate on that. I was particularly glad, therefore, that the United Kingdom Government launched their Link into Latin America campaign at the beginning of the year. Unhappily, it coincided with the problems in Mexico, but I do not think that that has derailed the programme. No doubt my hon. Friend the Minister of State will have something to say on that.

The campaign has led to a general and growing awareness in British business of the opportunities in Latin America, which was demonstrated by the large attendance at the conference that the CBI organised on Mercosur on 21 September. I strongly endorse the warm tributes paid to Canning house by my hon. Friend the Member for Gravesham. The Canning house conference on a free trade area of the Americas on Monday 16 October again demonstrated the efforts that are being made by LATAG, Canning house itself, the Department of Trade and Industry and all the bodies charged with developing our interests in Latin America.

However, we still have more to do and I refer the House to one aspect: the European Union's programme for industrial co-operation with Latin America, Alinvest, voted last month 41 million ecu of European Union funds for a five-year programme of technology transfer, know-how initiatives and strategic alliances between the two regions. As I understand it, there are 170 trade multipliers, as they are called, of which only seven are from the United Kingdom—less than 4 per cent. of the total—while 60 per cent. is in three countries: Spain, France and Italy. Keen as I personally am on taking full advantage of our membership of the European Union, I hope that British exporters, led if necessary again by the Department of Trade and Industry and the Foreign Office, will take full advantage of the European Union funds which are available to them.

The panorama is extremely encouraging. The latest agreement between Britain and Argentina on Falkland Islands oil exploration is a development greatly to be welcomed. Neither side must be put off by the rhetoric that is occasionally directed towards that difficult issue. We have experience in our recent past of the dangers of rhetoric going too far. We must concentrate on the practical realities and I believe that the oil exploration agreement is a good example of what can be achieved by responsible statesmen working together for the general good. The agreement will further enhance relations between Britain and Argentina, which are remarkably strong and have withstood the inevitable pressures exerted by the Falkland Islands dispute. There will be a further spin-off effect on Britain's standing with the rest of Latin America.

As my hon. Friend the Member for Gravesham said, the historical and continuing, deep-seated cultural, family and trade links that we already have mean that there is a great basis on which to build. The message of this debate should go out to Latin America that we in Britain recognise what has been achieved and know that there are problems but that we congratulate those countries on the restoration of democracy, the political stability that is developing throughout the region and the economic progress that is being attained. We look forward to working together, possibly through a free trade area of the sort that is now being discussed. There are difficulties with that, but let us hope that we can make progress on it. We look forward to collaborating with Latin America.

The other message is to our own countrymen, especially those engaged in trade. It is the smaller companies to which we must address ourselves and say that while there are opportunities with the Asian tigers and in eastern Europe, they should not forget the vibrant, positive, encouraging opportunity in Latin America. I hope very much that the Government will take the lead in reinforcing the initiatives they have already undertaken.

10.44 am

Sir Kenneth Carlisle (Lincoln)

I, too, am glad to take part in this debate and I pay tribute to my hon. Friend the Member for Gravesham (Mr. Arnold) for the enthusiasm and zest with which he has encouraged good relations with the whole of Latin America and encouraged these debates in the House over the years.

This morning, I want to concentrate on Argentina because I have long family connections with that great country. My family first became involved in Argentina in about 1820. My father was born in Buenos Aires. I had the good fortune to work there for two years in the 1960s. I still have family who live and work happily there. For me, as for my hon. Friend the Member for Wycombe (Mr. Whitney) who has spent time in the embassy in Argentina, it is a joy that they have come through difficult times and that relations between our two countries are now genuinely warm, constructive and show great promise for the future.

I believe that our now firm relations with Argentina are at a juncture where there is great scope for further growth over many facets of our friendship. That potential exists not only because of our old and enduring links with Argentina but because of the impressive economic promise of that country and its democratic stability.

It is worth reminding ourselves that Argentina is one third the size of the United States—I million square miles. It is a huge country with one of the best agricultural industries in the world, which has great potential. It also has enormous reserves of raw materials which are in the process of being developed and which offer it great promise of prosperity in the future. Added to that, of all countries in Latin America, Argentina has one of the best educated and professional middle classes. It has the structure to make good use of its potential.

Those natural qualities always existed, but they are linked now to the prospect of financial stability with low inflation. We all remember those decades when inflation in Argentina seemed extraordinary to us in Europe. Now inflation is low, running at European levels. There is also the promise of stability guaranteed by democracy. We were all impressed by the recent election in Argentina, when the Government had an austere budget before the election to meet the financial crisis and went on to win a genuine victory. Of course, the future will be tough; it always is. Argentina has to bed down those reforms but we can all recognise the promise and the stability. As my hon. Friend the Member for Wycombe said, that provides great opportunities for British companies.

Many British companies are already investing in Argentina. Lloyds bank is a long-established investor there and British American Tobacco, British Gas, Cadbury Schweppes, Glaxo, Unilever and a host of others are investing in Argentina—not simply trading, but putting money into bricks and mortar and enterprises in that country. In fact, UK investment in Argentina is the highest of any European country. There is scope for much more such investment.

The World Bank estimates that for Argentina alone, the investment needed in all sorts of infrastructure by the year 2000, only five years away, is colossal. For example, it requires investment of over £2 billion in railways, £4 billion in gas, £5 billion in water, over £10 billion in electricity generation and nearly £10 billion in telecommunications. So the list goes on. Those requirements offer huge opportunities for British firms. Although we are taking some of those opportunities, we could do much better. There is scope and hope for Argentine investment in this country. We are the natural gateway for Argentina to get into Europe, and London can provide the banking services and other areas of expertise that Argentina needs if it is to exploit European markets.

Although it has been growing, direct trade—the import and export of goods—has not been so good. It came from a low point after the Falklands war and although figures have been encouraging in recent years, our exports to Argentina are still not as high as those of France and Germany, nor as high as our direct investment in Argentina merits. This country must invest in, and work hard at, that. There is an encouraging amount of activity, including trade missions. My right hon. Friend the Member for Wiltshire, North (Mr. Needham), who has just stepped down as Minister for Trade, was a leading light in taking trade missions around the world. He did not neglect South America. Nor did my hon. Friend the Minister's predecessor, my right hon. Friend the Member for Watford (Mr. Garel-Jones). They understood the importance of Latin America and helped to create potential here.

I am glad that this country is in the process of creating a British-Argentine chamber of commerce. One already exists in Buenos Aires but we have now created one here to encourage activity and interest in Argentina and to help companies that wish to trade with Argentina. We must continue to work on those links between the United Kingdom and Argentina.

Although we have come some way with trade and investment, we must make the most of that potential. We still have much work to do. I welcome the growing links, not only in trade, business and investment but in all other areas. Like my hon. Friend the Member for Wycombe (Mr. Whitney), I welcome the fact that the potential now exists to exploit and develop the raw materials around the Falkland Islands. That is good for all three countries involved: the Falkland Islands, the United Kingdom, and Argentina. Once we start to do that, those links will inevitably grow stronger and work better.

The growing affection and practical working between Argentina and the United Kingdom was emphasised last year when a statue was unveiled in Belgrave square to San Martin, the founder of Argentine freedom. That was a great symbolic event which I hope and believe will, over the next few years, set the tone for the enduring links between our two countries, which go back so long and inevitably have such potential.

10.52 am

Mr. Tony Lloyd (Stretford)

I congratulate the hon. Member for Gravesham (Mr. Arnold) on once again being one of the major participants in a debate on Latin America. He may be pleased to know that I have followed these debates with interest over the years. He may not know that I have a long-standing interest in the region. However, it has always struck me as perverse to have a debate that covers the whole of that massive area.

I have listened with interest to points made on both sides of the House this morning. While I accept that the euphoric view of the world put forward by Conservative Members is reflected in reality in some areas, it disguises the fact that the major problems in Latin America have been glossed over, except in the speech of my hon. Friend the Member for Islington, North (Mr. Corbyn). The problem of poverty in the region is enormous and human rights abuse in different parts of Latin America is at horrendous levels and is no better than in previous years. Debt and the way in which structural adjustment programmes have borne down on the poorest people in the region have led to massive human catastrophe. In addition, the problem of drugs—narco-trafficking and narco-terrorism—present challenges not just to that region but to the entire world.

So we should not enter this debate complacently. I recognise that, in such a diverse region, there are areas of great success and I wish to deal with those first. I commend to the House the excellent report, produced in July by the Select Committee on Trade and Industry, on trade with Brazil and with Argentina. The report pays considerable attention to the massive power of those markets and points out that Mercosur is well on the way to becoming the fourth most important economic bloc in the world. That is vital for Europe because, if we are to avoid the serious danger of the world breaking up into competing economic blocs. Europe's relations with Mercosur are central to Britain's interests and those of the Latin American countries, particularly the four countries within the Mercosur union.

Brazil is already an economic super-power with a tremendously important economy. Unfortunately, our balance of trade with Brazil is highly unequal. I do not criticise Brazil for that; it is up to British industry and business to get out there and sell itself within that region. Our relations with Argentina are enduring despite history, particularly the Falkland Islands war. Britain is still a major investor in both those countries and British industry, business and employment have a considerable base in those areas. That is part of the success.

Conservative Members talked about political stability in Latin America. In Argentina, Brazil, Chile and other parts of Latin America, there is now a level of political stability that must satisfy all those with an interest in our relations with the area.

Because of the lack of time, I shall now move on to some slightly more contentious issues. I apologise to those with an interest in the areas that form pockets of stability. While those are important to us, it is equally important that we recognise and place on record some of the problems that exist in the region. We must recognise that debt and the structural adjustment programme that brought on the debt crisis have produced massive social consequences in many countries of Latin America.

For example, in Peru 12 million people—some 55 per cent. of the population—live in abject poverty. Nearly 50 per cent. of children under five suffer from malnutrition and the level of human rights abuse is connected with that poverty. Peru's drugs trade places it firmly as the narcotics regime of the world. That is not surprising when we examine the figures that underlie the problem. For 1 hectare of land in Peru devoted to the cultivation of coffee, a farmer would expect to receive $1,300 a year in return; for 1 hectare of land devoted to the cultivation of coca, the same farmer would receive $10,000 in return. British farmers—I say this without ill will to British farmers, who are particularly good at making as case for the best crops and prices here—will understand why farmers in Peru are forced to make the same harsh economic choices. We must recognise the crude economics of the drugs trade in poor countries.

Mr. Jacques Arnold

Would the hon. Gentleman tell us what he would do about the debt problem?

Mr. Lloyd

The world must heed the calls for debts to be restructured or written off. No progress will be made unless we are prepared to recognise that the poorest people in the poorest countries can be relieved of that burden of poverty only by debt write-offs.

I am sure that the hon. Member for Gravesham is aware of the relationship between poverty, debt and drugs trafficking. He must be aware that that has created a problem in this country. If he wants to do something practical about it, he should accept the need to deal with the debts of certain countries. The hon. Gentleman cannot escape the logic of that conclusion.

The lack of proper international co-operation in tackling the drugs industry is also a problem. Narco-terrorism occurs throughout the world, but specifically in Latin America. If our country is not prepared to play a constructive role in combating it, we shall miss an opportunity to do something about a problem that affects our people directly. We must also be prepared to develop crop substitution programmes and offer investment in alternative farming techniques and methods to people in drug-producing areas; otherwise we will miss an opportunity to do something that would also practically benefit our people. I concede to the hon. Member for Gravesham that such practical steps have been taken, but we are not doing enough and no one should pretend otherwise. We have not recognised the scale of the drugs problem that exists in Latin America and in our country.

Certain Caribbean countries are on the narcotics route from Latin America to Europe and the United States. The stability of their societies risks being destroyed by the power of the drug barons.

Mr. Arnold

What would the hon. Gentleman care to say about the banana regime, particularly in relation to the Caribbean islands and the offsetting effect in Latin America'?

Mr. Lloyd

The problems of the banana regime reveal some of the worst excesses of believing the mantra that free trade is the solution to all problems. There is no doubt that the United States is exerting considerable pressure to open the market for bananas to Europe. That pressure is being exerted in the interests not of Europe or the banana-growing nations, but of those United States companies which, through their own commercial decisions, have been squeezed out of the European market.

It is not in the interests of Britain nor in the interests of our long-term relationship with Jamaica and the Windward Islands for the banana regime to be ripped up. I hope that the Government accept that Britain's long-term interests have already been set through the type of investments that the Government have made in the banana industry in the Caribbean. It would be gross folly to throw away that investment and to see Europe flooded with bananas imported from central and south American countries that have not cheap labour, but practically slave labour.

I urge the Minister to acknowledge that not only do we have a moral obligation to maintain the current banana regime but that it is in our long-term economic interests to do so. I hope that that answers the question of the hon. Member for Gravesham. If the banana regime collapsed, Jamaica would be plunged into abject poverty and the destabilising effect would be hard to comprehend. Such economic destabilisation has already resulted in human rights violations in large parts of Latin America.

I have a long-term interest in Guatemala. The latest intelligence reports suggest that its human rights record is not measurably better than it was at the height of the war there some years ago. It may be better according to absolute numbers, but that is an odd calculation considering the work of death squads organised by the paramilitaries and the police. In that country, not only political opponents but people from all walks of life disappear. The United Nations' verification mission reported "grave and repeated" human rights violations and blamed "persistent impunity" for the lack of progress in ending those abuses.

I must put on record that the current President of Guatemala has done precious little to rein in the security forces and the army, who are most guilty of persecuting the innocent and the blameless. The world cannot simply sit back and ignore what has happened in that country. We cannot ignore the fact that we are training Guatemalan police. We must be given some account of the function of that training at a time when that police force is not subject to proper control.

We know that Colombia has many problems because of the narcotics trade, but it is also suffering because of the violation of human rights. According to Amnesty International more than 1,000 people have been extrajudicially executed by the armed forces or paramilitary groups. We know that attacks against community leaders and human rights activists are a significant feature of daily life in Colombia. No great steps have been taken to improve human rights there. The country is locked in anarchy; Colombian political leaders have said that the budgets of the drug barons and the drug cartels are so enormous that they threaten to subvert totally that state.

Once again, the links between poverty, human rights abuses, an army out of control and the narcotics trade are overwhelming. The hon. Member for Gravesham may smile at the idea of the army being out of control, but I must remind him that the Colombian army was able to sabotage a change in the law which would have meant that cases involving kidnappings and disappearances at the behest of the army were brought before civil courts. Instead, those cases are still heard before military courts and are therefore not subject to the control of the elected Government of that country.

The existence of a notional democratically elected Government does not offer any guarantee of the basic freedoms and standards that we would expect of those with whom we would like to deal on an equal basis. The hon. Member for Gravesham and other hon. Members have mentioned Cuba. I have just returned from that country. I am not an apologist for the Cuban regime, and I raised the issue of human rights abuses with the Cuban Government. Human rights are indivisible from all other issues whether one is talking about Cuba, Colombia, Guatemala or anywhere else.

One of the great problems from which the Cuban people suffer is the misguided blockade that America continues to impose on that small country. A recent editorial in The Guardian described it as an act of "gross pettiness". That is an appropriate description given that at a time when the United States has eased restrictions on China, Vietnam and North Korea, it still continues its peculiar ideological battle with a tiny island in the Caribbean. I was pleased to note that when the Minister for Science and Technology went to Cuba, he described that blockade as blinkered. He spoke not only for the Government but for people in Britain and Europe.

It is not in the interests of the Europeans or of Latin America that Cuba continues to be isolated. Cuba should be brought back into the family of nations in that region and the family of nations of the world. The United States would do us all a service and a favour by recognising that and removing the blockade.

This is the first opportunity that I have had to speak in a debate about Latin America. I said at the beginning that such debates are, by the nature of the region, diverse and wide-ranging. I apologise for the fact that I have missed out far more subjects than I have been able to mention in such a short space of time, but I freely concede that such debates are important. It gives us an opportunity to discuss a region that is vital to the United Kingdom.

I repeat that Britain's self-interest, Europe's self-interest and our role in the world depend heavily on our forging the strongest possible relationships within and between the countries of Latin America. We should be part of the process of supporting their development, and we should take our share of exchange with Mercosur and, more generally, with the whole of that region. It is important for the world; it is important for Britain's narrow self-interest. In those terms, the fact that this debate exists pays tribute to the fact that this is a region that is perhaps as important as any for the future of Britain and of the world.

11.10 am

The Minister of State, Foreign and Commonwealth Office (Sir Nicholas Bonsor)

I congratulate my hon. Friend the Member for Gravesham (Mr. Arnold) on introducing the debate and on bringing the subject back before the House. His expertise on Latin America is well known and his knowledge is invaluable. His contribution to the debate took us a long way forward in the discussion of our relationship with Latin American and south American countries.

I welcome what the hon. Member for Stretford (Mr. Lloyd) said about the importance of our relationship with Latin America and that region. I agree that we should trade heavily with the region, in our own interest and in their interest, and continue a dialogue designed to help them in their development.

Remarkable political and economic changes have occurred in the region. Apart from Cuba, democracy is universal and has been further consolidated in the past few years by a series of peaceful and open elections. In 1995, elections have been held in Argentina and Peru, and next month they will be held in Guatemala.

There has been an economic transformation. The economy has been opened up and inflation has been reduced. Structural changes have been adopted, privatisation programmes pursued and debt re-scheduled. The pace and depth of change may vary from one country to another, but the trend is unmistakable and, in my opinion, irreversible. Latin American economies have grown at a rate second only to the Asian Pacific rim countries, and their import markets have grown substantially.

Everywhere there is evidence of Latin America entering the world stage: Mexico's joining the North American Free Trade Area and the Organisation for Economic Co-operation and Development; Chile joining the Asia Pacific Economic Co-operation and negotiating to join NAFTA; the summit of the Americas, which achieved more concrete results on regional free trade than did the rival APEC summit in Bogor; co-operation on non-proliferation issues; participation in United Nations peacekeeping; aspirations to the UN Security Council; or movement towards closer relations with the EU by Mercosur, Mexico, Chile and Latin America as a whole.

Not all has been plain sailing. The hon. Members for Stretford and for Islington, North (Mr. Corbyn) concentrated heavily on some of the problems that have arisen. In 1995 the Mexican economic crisis occurred, as my hon. Friend the Member for Wycombe (Mr. Whitney) said, but there has been rapid recovery. We should all welcome that, as he did. There has also been a dispute between Peru and Ecuador, some problems between Venezuela and Colombia and political uncertainties in Ecuador.

The Mexican crisis and the economic adjustment that it necessitated have been traumatic for the people of Latin America and for the whole world. Argentina was affected when the crisis created liquidity and banking difficulties, and Brazil was hard hit for a while. However, all those countries have acted decisively and I believe that they are now back on the road to economic prosperity and are making progress.

The hon. Member for Stretford mentioned some problems in the region. He emphasised the problem of human rights abuses, and I assure him that the Government are conscious of the need to work with the Governments of all countries concerned to ensure that such abuses are wiped out. There are still far too many instances of such abuses throughout the region. We shall work closely to try to resolve that problem. It is, as the hon. Gentleman rightly said, partly the result of the poverty in the region, as is the drugs problem. We are working, as much as we can, to help them on the road to prosperity and to help combat the drugs trade.

The hon. Gentleman appeared to complain about our training some police forces, and especially about some training that we give in Guatemala. However, only by giving proper training and by encouraging police forces to act as responsible police forces should act can we help to prevent the abuses to which he rightly drew our attention.

Despite all those difficulties, the United Kingdom remains confident that Mexico specifically and Latin America as a whole have laid the basis for an increasingly prosperous and stable future and will overcome the problems that we have discussed and any future setbacks.

One lesson that the international community could learn is the need constantly to be vigilant in the surveillance of key economies, even when monitoring a country with an excellent track record of economic reform. I believe that the Mexican crisis took most experts by surprise. We must ensure that we are not taken by surprise again.

Mr. Corbyn

Which Mexican crisis is the Minister referring to? Is it the financial crisis or the earlier crisis in the Chiapas region? There is a connection between the terrible poverty in southern Mexico and the uprising and the later agreement that was reached—forced on Mexico by the United States of America.

Sir Nicholas Bonsor

I was referring to the economic crisis. I believe that that has been resolved. I was in Mexico earlier this year and I discussed the Chiapas problem with the Mexican Government. They are conscious of the difficulties. I agree with the hon. Gentleman that poverty is a significant factor. The Mexican Government are now trying their hardest to resolve those difficulties and to reach a democratic, stable and peaceful solution to the Chiapas difficulty.

The conflict between Peru and Ecuador has obviously caused us substantial concern, not least because both countries are very good friends of ours. Such conflicts are anachronistic and they damage not only the images of Peru and Ecuador but the whole region. We were impressed, however, by the determined effort of the Rio protocol guarantors to achieve a ceasefire and set in train a process leading to a long-term settlement of the dispute. I believe that that is now achieving its ends and that the relationship between those countries is rapidly improving.

The long-standing border disputes between Colombia and Venezuela lead to raised voices from time to time. They were exacerbated earlier this year by a clash between Colombian guerillas and Venezuelan marines, resulting in the loss of some Venezuelan lives. However, both countries, as close partners in the increasingly successful economic group of three—Mexico, Colombia and Venezuela—are working hard to settle those problems diplomatically.

Thankfully, neither the important structural reforms to economies nor the new spirit of regional co-operation has been put at risk by disputes in the region. The transformation is irreversible. Moreover, the changes in Latin America are opening up new opportunities for Britain.

We once enjoyed a predominant economic position in the region, and it is important that we now recover it. There remains a large reservoir of strong good will towards Britain and we must ensure that we tap it to the full.

British assets in the region are considerable. We have diplomatic representation in every country. British academic expertise on Latin America is second to none. The British Government are actively encouraging those positive developments.

In 1992, my right hon. Friend the Prime Minister made the first ever visit by a serving Prime Minister to Latin America. The former Foreign Secretary, my right hon. Friend the Member for Witney (Mr. Hurd), visited Latin America three times in the past four years. There is a regular and growing flow of Ministers travelling in both directions.

Mr. Tam Dalyell (Linlithgow)

On the issue of sustained ministerial relations, the Minister will know that the question of the Brazilian Atlantic rain forests was discussed, and indeed it was discussed by the Latin American group with Paolo e Flecha Tarso de Lima and the present ambassador. It concerns economic policy and cocoa prices. I do not expect the Minister, off the top of his head, to give any answer to this, other than an assurance that the specific European concerns in relation to trade, prices and possible consequent damage to the Atlantic rain forests have been taken into account. Indeed, that subject was mentioned by the Prime Minister at Rio.

Sir Nicholas Bonsor

I am grateful to the hon. Gentleman for raising that issue and for not expecting me to give him an impromptu reply. I shall consider the subject closely. The importance of the rainforest is fully recognised by Her Majesty's Government.

I am glad to be able to announce to the House that, with effect from September 1995, the United Kingdom has acceded to the Organisation of American States as a permanent observer, with our ambassador in Washington, Sir John Kerr, as the United Kingdom representative. The OAS is a unique forum for discussion of hemispheric affairs throughout the Americas. It has been given an important new responsibility by the summit of the Americas, especially in overseeing the consolidation of democracy and good government in that region. Most of our European partners are already observers. We have been applying for some time and the fact that we have now acceded to that organisation is a useful step.

Several of my hon. Friends have mentioned the Falkland and Argentine oil agreement. It is, of course, extremely welcome and marks a step forward in the relationship between our two countries. It is important. It demonstrates the fact that we can set aside our long-standing disputes over the sovereignty of the Falklands and re-establish good relations with Argentina. We hope that we shall be able to use the oil agreement as a catalyst to improve the already excellent bilateral relationship that we enjoy. The non-governmental Argentine-British conference in Oxford in September discussed ways of improving links between the two countries. I think that it was held in my old college, which I take as a good omen, especially in a sporting and cultural context.

Military contact talks to be held in Buenos Aires later this month will discuss a graduated improvement in military relations—part of a step-by-step process that has been in progress for two or three years. We hope to sign a double taxation agreement later in the year.

I should like to concentrate my remarks on the trade that we enjoy with Latin America. As the hon. Member for Stretford recognises, it is of vital interest to this country. The trade is growing at an impressive pace, and increased by 27 per cent. in 1993 and 21 per cent. in 1994 to more than £2 billion. This year, following the Mexican crisis, the increase is lower, at more than 11 per cent., but exports to South America generally are up by a further 20 per cent. Despite that growth of UK exports, our share of the market is disappointingly low—1.7 per cent. compared to our share of world trade which is about 5 per cent.

British investment in the region offers a better picture. After the United States, Britain is the second largest investor. British investment rose by 60 per cent. between 1991 and 1992, to £4.7 billion. But we do not seem to be able to carry that increase over into our export markets, which is a matter of substantial concern to us.

It is for that reason that the Department of Trade and Industry and the Foreign and Commonwealth Office, in association with the Confederation of British Industry, have launched the Link into Latin America trade campaign. My right hon. Friend the Deputy Prime Minister formally launched the campaign at a conference in January at CBI headquarters in the presence of every British ambassador accredited to Latin America. The aim is to make British companies aware of what Latin America is like today rather than the stereotyped image of it which some people seem to hold and which is outdated and inaccurate.

A co-ordinated media strategy has been developed to generate wide coverage of the positive changes that have taken place in Latin America and the increased business opportunities in the region. A programme of conferences, seminars, trade missions and VIP visits to the region have been organised. In the eight months since the campaign was launched, more than 30 events have been attended by more than 1,200 UK companies and representative bodies. For example, a highly successful and well-attended conference was held on 21 September in London to promote opportunities in Mercosur. The conference was opened by my hon. Friend the Minister for Trade and a keynote speech was delivered by my right hon. Friend the Member for Richmond and Barnes (Mr. Hanley), the Minister of State, Foreign and Commonwealth Office. Ministers from each of the Mercosur countries were present and spoke at the conference.

Nine export promoters from the private sector have been seconded to the DTI with specific responsibilities for Latin America. A significantly larger programme, supported at trade missions and trade fairs, has been run this year and is in the pipeline for 1996. As Latin American Governments have opened their markets, the Export Credits Guarantee Department has returned to the region. A series of premium rate reductions has been made for markets where competition was particularly acute.

The Foreign Office's network of commercial sections in British embassies in the region stands ready to support the campaign. Trade promotion is one of Britain's fundamental foreign policy aims. Britain's prosperity depends on success in external trade, and the emerging markets of Latin America offer one of the most promising areas for the expansion of that trade. In parallel with the launch of the Link into Latin America campaign, commercial sections throughout the region have been strengthened and new posts have been opened, including ones at Porto Alegre and Curitiba in Brazil, and Monterrey in Mexico.

We have also sought, with success, to increase bilateral co-operation. We have negotiated investment protection and promotion agreements and double taxation conventions—or are in the process of doing so—with the most important markets. Visa abolition, anti-narcotics and air services agreements are other examples of the practical advances in co-operation that have been achieved with Latin America.

As my hon. Friend the Member for Wycombe said, there is a need to focus on medium-sized and smaller companies. In the past, some of the attention has been focused wholly on large companies and what might be described as the great and the good. I believe that the greatest opportunity for expansion lies in attracting our smaller companies to trade in the region. To do so, we need, first, to focus on what is needed in those countries and, secondly, to identify the British companies that can provide it. It is to that end that the Link into Latin America campaign is now directing its attention.

On the more general issue of United Kingdom and European Union aid and trade co-operation with Latin America, our technical co-operation programmes in the region are modest in size—they were £27.3 million in 1995–96—but they are much valued locally. Their size has roughly doubled over the past five years. The scheme focuses on natural resources, the environment and aid to the health and education sectors. We are also strengthening the assistance that we give towards promoting good government. Our aid programmes have been highly praised by many Governments in the region for their effectiveness and value. We also contribute substantially to EC aid in Latin America.

The British Government also strongly support the move towards closer relationships between the European Union and Latin America. Last year the EU agreed a basic document on policy towards the region. In 1994 and 1995, successive European Councils at Corfu, Essen and Paris agreed to develop proposals for deeper relationships with Mercosur, Mexico and Chile.

The EU already has a high-level dialogue with Latin American groupings. The UK values both the EU-Rio group dialogue and the San José dialogue between the EU and central America. My hon. Friend the Minister of State, Foreign and Commonwealth Office, the hon. Member for Boothferry (Mr. Davis), attended both the EU-Rio group and the EU-San José ministerial meetings in Paris and Panama last year. I hope, if my diary permits and the party Whips allow me, to attend meetings in Bolivia and Italy next year.

We welcome recent moves to re-assess the San José dialogue in the light of democratisation of the region during the decade that the dialogue has been taking place. We support recommendations that the focus of the dialogue should be widened to cover economic as well as political co-operation. There has been considerable progress in negotiations on political and economic agreement with Mercosur, Mexico and Chile during the Spanish presidency.

We welcome the initialling of the new EU-Mercosur framework agreement in Montevideo on 29 September. The final agreement should be signed in Madrid at the European Council in December. We also support the ultimate objective of agreeing to an inter-regional association agreement, including the progressive and reciprocal liberalisation of trade in accordance with World Trade Organisation rules.

We welcome the decision taken on 10 April by the Foreign Affairs Select Committee for a new EU-Mexico agreement that would provide for trade liberalisation and enhanced political dialogue to replace the existing EC-Mexico trade and co-operation agreement of 1991. The scope of the new agreement was set out in an EU-Mexico joint solemn declaration signed on 2 May this year. I hope that we can make early progress to enable approval of a negotiating mandate for talks with Mexicans at the Madrid European Council in December.

We also greatly welcome proposals to strengthen EU relations with Chile to reflect its economic development and political stability. The UK supports the decision of the 17 July Foreign Affairs Council to adopt the most ambitious option for a new bilateral EU-Chile agreement, which will provide enhanced political dialogue and trade liberalisation.

Mr. Corbyn

rose—

Sir Nicholas Bonsor

I am afraid I have only one minute left. I had intended to answer the hon. Gentleman's question about Antarctica at the end of my speech, but I shall do so now. We have not yet agreed on the placement of the secretariat for that operation. We are prepared to consider any country that is not in competition with us with regard to our Antarctic rights, but Chile and Argentina do not accept the United Kingdom's claim and, therefore, would not be suitable places to locate the secretariat. However, our views remain open as to where it should go.

Mr. Corbyn

That is short-sighted.

Sir Nicholas Bonsor

I do not think that it is short-sighted. The United Kingdom Government must protect the United Kingdom's interests.

In conclusion, the area is a very important to us. The trading opportunities are magnificent and the whole region is becoming more democratic and prosperous. We must ensure that we take full advantage of any opportunities that may arise.