HL Deb 30 May 1905 vol 147 cc211-8

VISCOUNT RIDLEY rose to call attention to the despatch of the late Lord Salisbury [Cd. 1630] of July 28th, 1897, in which the British Government inform the German Government that, in the negotiations for a new treaty of commerce with Germany, they will be happy to consider any suggestions for improved stipulations; and to ask whether, in view of the importance of the question to the commercial interests of the country, it is possible for the Government to make any statement as to the present state of negotiations. He said: My Lords, the passage to which I wish to direct your Lordships attention is at the end of the despatch from the Foreign Office on July 28th, 1897. It runs thus— Her Majesty's Government feels confident that the Imperial German Government will share their wish for the conclusion of a new and mutually satisfactory treaty, in the negotiation of which Her Majesty's Government will be happy to consider any suggestions for improved stipulations which may be suggested by the experience gained during the period of over thirty years for which the Treaty of 1865 has subsisted.

The treaty with Germany, which gave us the privilege of the most-favoured-nation clause, was denounced on the ground that it stood between us and the action of our Colonies in fiscal matters. In the words of the despatch from which I have already quoted— Certain of the British Colonies, which are all comprised within its operation, find themselves committed by treaty to a commercial policy which is not in accordance with the views of the responsible Colonial Ministers, nor adequate to the requirements of the people.

The Foreign Minister went on to say that certain provisions of the treaty— Constitute a barrier against the internal fiscal arrangements of the British Empire, which is inconsistent with the close ties of commercial intercourse which subsist, and should be consolidated between the mother country and the Colonies.

I have read these extracts to make the position perfectly clear to your Lordships. I do not wish to refer to the reasons which induced this country to denounce the treaty; they are matters of debate under another set of considerations. But what I do wish to call your attention to to-day is the fact that as the result of the step then taken in the interest of the Colonies, this country is now, so far as I can gather, without any treaty from Germany involving the stipulations of the most-favoured-nation clause, and at the same time we are face to face with a great revision of the tariff by the German Government, in the process of which the other States of Central Europe bear a considerable part.

The present system is that our trade relations with Germany are governed, not by the treaty which existed from 1865 to 1897, or by any other treaty, but by an Imperial Ordinance which is renewed from year to year, and which in its main provision is similar to the treaty denounced in 1897, but which obviously, from the fact of its being an ordinance renewed from year to year, can offer no security or reasonable expectation that its provisions will last. It is quite true that we have under this Imperial Ordinance the provisions of the most-favoured-nation clause, but I am one of those who think that these provisions are very illusory. As the noble Marquess who presides over the Foreign Office pointed out in this House in February of last year, only 2½ per cent, of the goods which this country imports into Germany get the advantage of the most-favoured-nation clause. Whatever may be the advantage of that clause it is under the present system purely temporary, and we have no guarantee of the permanence of the small advantage we may have.

Why is it that this arrangement is only a temporary one? I have looked carefully through this White, Paper and all the Government Papers which I can discover bearing upon the subject, and I find nowhere any indication that any more satisfactory treaty has been concluded, and I am forced to the belief that the reason why this matter stands in this position is that shortly after the treaty was denounced the German Government became engaged in a great revision of its tariff. As your Lordships know, the tariff has recently been passed and published, and the German Government have also published the treaties which have been concluded on the basis of that tariff with the Central European States. Your Lordships are, of course, familar with the process by which this is done. I have looked through the Papers and find no indications that this country has established any permanent treaty with Germany on the basis of the new tariff, or on the basis of any tariff whatever. The Question I wish to ask is whether we are to rely for the advantages we may have under the most-favoured-nation clause or in any other way on the negotiations carried out and brought to a successful conclusion by the Central European States.

That the dangers of the new position are not illusory I will venture to prove to your Lordships in a few words. The new German tariff has not been published very long. It is a very complicated and intricate document, and I do not attempt to say that I have mastered it in any sense of the word, but I have I done my best to make myself acquainted with its provisions and the new situation which is created by it, and I find that, taking the textile trades, in which this country is largely concerned, there are a great number of articles on which the duty to be imposed under the new tariff has been increased from an average of thirty per cent. to an average of eighty per cent. These are, of course, only rough figures. I find that upon many other articles the duties are similarly increased, although I freely acknowledge that on many articles the duties are reduced.

I then tried to discover how the trading community regard the new position. I find that a number of chambers of commerce are very apprehensive of the result of the new tariff. The Chamber of Commerce of Newcastle and Gates-head passed a resolution declaring that I with reference to articles manufactured in the United Kingdom the rates of duty under the new tariff, speaking generally, are prohibitory or almost prohibitory, and they say that most of the duties to be levied on machinery are so serious that it is difficult to see how trade can extend or even be maintained between the United Kingdom and Germany. I would like to know whether we have any reasonable hope of establishing a treaty with Germany. That our Foreign Office is alive to the situation I am well aware. You have only to study the correspondence contained in this White Paper to see the anxiety of our representatives abroad in watching over the interests of our trade. I do not raise this question in any captious spirit or with any desire to in any way embarrass His Majesty's Government. I would be only too glad to be told that we have the prospect of dealing in a spirit of negotiation with the German Government, and of obtaining those advantages from them which the happy trade relations subsisting between this country and Germany entitle us to have. I would conclude by asking the noble Marquess whether, with the weapons in his hands for dealing with foreign matters, he can hold out any reasonable hope that there are negotiations proceeding with Germany which promise some advantages to our important trade with that country.

* THE SECRETARY OF STATE FOR FOREIGN AFFAIRS (The Marquess of LANSDOWNE)

My Lords, the noble Viscount very naturally took as his point of departure the despatch of Lord Salisbury to Sir F. Lascelles in 1897, immediately after the denunciation of our treaty of commerce with Germany. The denunciation of that treaty, as your Lordships will remember, was due to the fact that, in Lord Salisbury's words, the treaty constituted a barrier against the internal fiscal arrangements of the British Empire, a barrier inconsistent with the close ties of commercial intercourse which subsist and should be consolidated between the mother country and the Colonies. Lord Salisbury went on to say that, while His Majesty's Government were for this reason constrained to terminate the treaty, they were anxious to commence negotiations for a new treaty from which the stipulations of Article 7 should be omitted.

The matter was certainly not put on one side, because in the immediately following years communications did in fact pass between the two Governments upon the subject of a renewal. A draft treaty was even proposed by us, and a counter treaty was proposed on the side of the German Government. But these overtures produced no effect, no doubt mainly because each side persisted in its own view in regard to the question upon which the difference had originally arisen: I mean the right of the Colonies to form special arrangements as between themselves and the mother country, of which the advantages were not to be extended to any foreign country. The Parliamentary Paper from which the noble Viscount quoted carry the history of those transactions a good deal beyond 1897; and the noble Viscount will find in the last Paper of the series a despatch addressed by me to our representative in Berlin, in reply to the note received from the German Government, in which, once again, Germany on one side and Great Britain on the other placed upon record the manner in which they regarded this question.

I will not quote these Papers, as they are already in your Lordships' possession. They show, I think, that each side was perfectly well able to appreciate the point of view of the other. The discussion was carried on in a friendly spirit, and both the German note and the British despatch ended with the expression of a hope that the question might be further discussed. It was suggested on behalf of the German Government that the discussion should take the form of an exchange of ideas in regard to the means of obviating the present difficulty, and His Majesty's Government expressed themselves willing to approach such a discussion in the most conciliatory spirit. That carries us up to 1903. But the situation has been complicated by the promulgation of a new German tariff, the termination of German treaties and agreements with European Powers, and the substitution for them of new treaties and agreements.

The noble Viscount described the manner in which the new German tariff affects the trade of this country. I certainly shall not contradict his statement that the effect of the tariff is distinctly unfavourable to British trade, the more so because it comes upon the top of a former tariff which was in itself of a restrictive character. A Report upon the operation of the tariff, which, as the noble Viscount truly said, is an extremely complicated document, was laid before Parliament not long ago by the committee of the Intelligence Department of the Board of Trade, a committee which has the advantage of being assisted by competent representatives of British trade. But, while it is the case that the tariff is distinctly unfavourable to our interests, it is also true to say that at I some points its effects are mitigated by the fact that at this moment we enjoy the right of most-favoured-nation treatment at the hands of Germany. I am informed that the total value of the British exports which most severely experience, or would most severely experience, the effects of the new German tariff is £3,700,000, and that of this sum £1,700,000, not quite half, have secured reductions of duty indirectly as the result of the commercial negotiations which have taken place between Germany and other foreign Powers.

The other Powers have obtained certain reductions of the tariff on certain articles, and we, under our most-favoured-nation treatment right, have these advantages, such as they are, extended to us. But it is perfectly true that our right to most-favoured-nation treatment depends upon a law of the German Reichstag which has been annually renewed, and our tenure of the privilege is therefore absolutely insecure. We are really in this position: whatever mitigations of the tariff we have been able to secure for ourselves have been obtained as a sort of by-product of the negotiations which have taken place between Germany and other Powers; and even these advantages are only secured to us by a most-favoured-nation agreement which may be terminated at any moment. Therefore I entirely agree with the noble Viscount when he says that he regards our situation as far from being satisfactory. I do not think it is satisfactory that our commercial interests should depend upon a terminable arrangement, or upon, so to speak, the crumbs which have been allowed to fail into our lap in consequence of negotiations between other Powers and Germany.

That is the situation described in a few words. I should certainly be very sorry to dismiss the idea of obtaining some improvement in that unsatisfactory condition of things; and I cannot help thinking that there should be materials for an arrangement mutually advantageous to the two Powers. The fact that we treat the imports coming to this country from Germany with extreme generosity suggests the idea that we should be able by an honourable and business-Bike transaction to obtain something in return from the German Government. But, up to the present moment we have not seen our way to approach seriously negotiations directed to that end. It is only quite recently that we have become aware of the precise operation of the new German tariff; and I think it must be obvious to your Lordships that, considering what differences of opinion exist in this country upon these subjects, considering that there is so much doubt as to the manner in which the people of this country regard the whole of those problems which we are in the habit of grouping under the title of the fiscal question, the conditions at present existing are scarcely favourable for approaching so important a new departure. I shall, however, none the less cherish a hope that under different and more fortunate circumstances we may be able to place the position of our trade with Germany upon a footing more satisfactory and less precarious than if occupies at the present time.

*EARL SPENCER

My Lords, I have only a few words to say, and these will be directed entirely to the concluding remarks of the noble Marquess, that this very important commercial treaty with Germany cannot be satisfactorily dealt with owing to the uncertainty in the mind of the country with regard to the fiscal system. The noble Marquess knows that I differ from him on the question of retaliation, but could there possibly be a stronger argument in favour of the contention advanced over and over again from this side of the House, that this fiscal question should be settled as soon as possible in the only way in which it can be settled, by referring it to the constituencies in a general election? This important treaty is only one instance of the difficulty arising owing to this question not being settled, and we contend that it ought to be settled at once.

House adjourned at half-past Six o'clock, to Friday next, half-past Ten o'clock.