HL Deb 21 June 1932 vol 85 cc38-51

LORD CRANWORTH rose to call attention to the Congo Basin Treaties and to ask His Majesty's Government whether their continuance is in accordance with the present policy of the Empire, and, if not, what steps are being taken to effect their denunciation; and to move for Papers. The noble Lord said: My Lords, even at this late hour I make no apology for bringing this subject before the attention of your Lordships, and that for two reasons. The first is that this is not a matter on which I desire to make en harangue. I ask this Question for the sake of getting information. The second reason is that this is a matter of the very greatest importance to a great many people. It is of the very highest importance to our East African Colonies who are now in grave financial straits. It is of the highest importance to the cotton spinning industry both in Lancashire and in India, and without exaggeration I think it may be said that on the answer to this Question depends the success or otherwise of the Conference which is to take place in Ottawa.

I wish to put the facts of this case as shortly as I can, but I may have to occupy some few minutes because what are called the Congo Basin Treaties are an agglomeration of some forty Treaties of various kinds starting at an early date. The facts that I shall give you I take in the main from a memorandum prepared by Sir John Sandeman Allen presented to the Joint East African Board and through them to the Colonial Office. Sir John is known to be the best lay exponent of this difficult subject, and I believe the facts which I shall give you have not been contradicted up to the present time. The first Treaty which I must bring to the notice of your Lordships is the Treaty of Berlin of 1885. For a year or two prior to that the great Powers of Europe had been conscious of the importance of developing trade in the vast and then largely unexplored and still less administered territories of tropical Africa watered by the Congo and the Zambesi. In accordance with this feeling a Conference of the Powers was held and an International Treaty was signed by the following countries—Great Britain, Germany, Austria, Belgium, Denmark, Spain, France, Italy, Holland, Portugal, Russia, Norway, Sweden and the United States of America and ratified by all except the United States.

The first thing that they did was to delimit the area of this Congo Basin to which the Treaty applied, and they called it the Conventional Free Trade Zone. This zone extends right across Africa far beyond the Congo Basin and includes what is now the whole of the Belgian Congo, Kenya Colony, Uganda, Tanganyika Territory, Nyasaland, parts of Portuguese East Africa, Portuguese West Africa, Northern Rhodesia, French Equatorial Africa, the Sudan, Abyssinia and Italian Somaliland. The Treaty took the form of a general Act and embodied six decisions of which only one is germane to the present subject. That is a decision relative to freedom of trade in this area. It was decided by that Treaty that there should be no import duties imposed by any of the signatories. The period of the Treaty was unlimited. Between 1885 and 1914 there were literally dozens of Treaties and Conventions amplifying and extending this principle as between the various signatories.

Then came the Great War which put an end to all Treaties between such Powers as were engaged therein but did not affect the neutrals. At the end of the War it was agreed at Versailles that all African questions should be settled by a special conference at St. Germain-en-Laye. Accordingly Great Britain and her Allies —the United States, Belgium, France, Italy, Japan and Portugal—signed a Convention which neither the United States nor Italy ratified. This Convention came into force in 1920 for a period of ten years. After that I understand it was open to revision. I have here a summary of the clauses of that Convention. They are fifteen in number, but for the purpose before us now the first is by far the most important. It lays down the principle of complete commercial equality in the area it defines, but I wish to emphasise one great difference between the two Treaties. Under the Treaty of Berlin no duty could be imposed. Under the present Convention no preference can be given. With regard to Tanganyika the position is even more unfortunate both for that Territory and for the United Kingdom. Tanganyika Territory is governed additionally by the terms of the Mandate given in accordance with the Treaty of Versailles, which provides for complete equality of rights of every kind for all nationals of States Members of the League of Nations and its terms are more far reaching and definite than those which govern the Convention. Modification can, however, be effected by consent of the Council of the League and such consent can be given by a majority.

Those being, as I understand, the facts, the first question that I ask is what advantage has this country ever had from these Treaties? I venture to suggest to your Lordships that it has been remarkably small and for this reason: that whereas in our territories we had the will to carry out the Treaties we also had the power. Other countries who doubtless had the will did not have the power. I would like to give an illustration of this. In 1910 I went up from Nairobi to Abyssinia on behalf of the Government to open up a new trade route. The moment I got over the Abyssinian border I and my party were captured and held prisoner. We did not get out through any intervention by the signatories of these Treaties nor any intervention by the Government of Abyssinia. We got out somehow else and it was not much use our pointing out to those thousand or so of wild tribesmen who captured us that we were within the Free Trade zone. They did not understand the Congo Basin Treaties. What is more important is that if you take Customs equality, Kenya, Uganda, Tanganyika and Nyasaland are wholly within the zone and so is the Congo, but else- where—in Portuguese East and West Africa, the Sudan, the French Equatorial Africa, Abyssinia and Italian Somaliland —the line of demarcation cuts across the territories and in every ease the principal ports and distributing areas are outside the zone. It follows therefore that in all these seven territories it is possible—indeed it is the fact—that they can give a preference to goods that come in, but when they cross an imaginary line they are supposed by this Treaty to give a rebate on their preference and clearly that must be impossible unless they have a regular Customs cordon, and I think the only place that definitely carries that out is Northern Rhodesia. It is true that we have had some advantages in the Congo with regard to trading. Twenty years ago I myself used to trade in the Congo and no obstacles were put in the way of trading there, although I must admit that our entertaining bill was of considerable dimensions. But I suggest that any advantages we have had in trade with the Congo could equally have been gained by a bilateral Treaty with Belgium.

I come to a second and more important question and that is as to the future. The nation has given this Government a mandate to go to Ottawa and there to negotiate or endeavour to negotiate methods to increase the reciprocal trade between this country and our Dominions. Everyone awaits the result with anxiety, but no one more than our East African Colonies who are now in financial straits which are, comparatively speaking, far greater than our own. It is vital to Nyasaland to sell more tobacco. It is vital to Kenya and Tanganyika to sell more sisal. It is vital to Uganda to sell more coffee and cotton, and on the other side it is all important to us to get a further market for cotton goods. I have the figures here and it, is only too clear how year after year the cotton goods that we supplied first almost entirely, and later on were supplied by this country and India, have gradually come almost entirely to be in Japanese hands. When we ask why, the reason is simple. It is not that our people are less skilful or hard working, but that the Japanese adopt a much lower standard of living than our operatives could possibly accept. That is why only the other day a hundred members of the House of Commons signed a petition asking that these Treaties should be revoked or at all events revised.

On the whole broad principle of Ottawa we are offering a share in our markets to our partners in the Empire in return for a share of theirs, and I think that, any of your Lordships who have taken part in the preliminary negotiations will have been struck by one thing, and that is that whereas we have a large and almost unlimited market to offer, when it comes to the other side the market is comparatively limited. One of the quite definite markets is that of our cotton goods in East Africa. It will be a very vital factor at Ottawa. It would be an exaggeration to say that if we went there with these Treaties still binding us we would be going into a fight with one hand tied behind our backs, but it would be no exaggeration to say that we were going into a fight with a sprained thumb. Therefore I wish to ask the Question standing in my name, and to amplify it in a somewhat more definite way I would like to put four questions to His Majesty's Government.

In 1928 and 1929 the joint East African Board asked that a Committee might be set up to consider this question. Was such a Committee ever set up and, if so, what were its conclusions? The Convention could, I understand, definitely have come up for revision and, I presume, revocation in 1930. Have any steps been taken in that direction? Thirdly, and this is a question on which I hope I may have a definite answer, have there been any secret negotiations since 1930 that have prejudiced the conditions relating to revocation or revision? There are several who have suspicions, wrongly I trust, that some such action has taken place and I hope the noble Lord who answers me will be able to say that those suspicions are ill founded. Lastly, I would ask, if the answer to the last question is in the negative, what steps the Government now propose to take towards revision or, as I believe would be better, denunciation of this Convention and its replacement by bilateral treaties wherever necessary. I beg to move.


My Lords, the noble Lord has given us a very lucid account of an extremely complicated series of commercial and other agreements and I think there is no doubt that though the arguments may be nicely balanced for and against the abrogation of these agreements on wider grounds, from the point of view of Kenya and Uganda trade with the United Kingdom, there is no doubt whatever that the arguments are overwhelmingly in favour of a change. Kenya would profit very much by preferences which might reasonably be afforded. A most valuable crop is coffee, a luxury product upon which we, in this country, might well afford to grant an increased preference. Another very large crop, the marketing of which causes great difficulty at the present time, because it is a bulky crop handicapped by transport charges, is the crop of maize. We know that that crop very nearly got the benefit of preference, and it was a great disappointment to Kenya in its present difficulties that at the last moment that expectation was frustrated.

Kenya and Uganda could do a great deal to help the British producer. It is very disquieting to see how British exports have lessened in amount in these markets. I have here the report of the Trade Commissioner for Kenya and Uganda, and it shows, taking all cotton fabrics, that whereas in 1929 Japan and ourselves were each sending 24 per cent. of the total importation, in 1931, in two years, Japan had improved her position so that her imports are double ours. Instead of each getting 24 per cent. of the total Japan gets 38 per cent., and we have dropped to 19 per cent. I will not quote at length from this report, but after explaining the very serious drop ill our trade he says that in times of financial stringency the price factor naturally becomes a most important consideration, and to this fact may be largely ascribed the fall in the value of the United Kingdom trade in this market. There is no doubt that this trade could he greatly benefited by preference. The value per lb. of our unbleached cotton is 84 cents, whereas that of Japanese cotton is 69 cents, or only 15 cents difference between the two products, whereas the Import Duty is 30 cents per lb., and so within the existing duty it would be possible to give an effective preference. Unfortunately, in other cases the price discrepancy is much larger. For instance, in other printed fabrics there is a difference of 35 cents per lb. between British and Japanese prices.

If this matter is to be dealt with it could be dealt with in various ways. Either British products could be put on the free list or the duty could be raised against foreign competitive importations. There are, however, disadvantages in both solutions. If you are going to put British products on the free list there is going to be very heavy loss of revenue, because these cotton products are bringing in £76,000 a year in Import Duties, estimated to be paid by the native population, and there are only two other items which represent more than £10,000 a year contribution from the natives—namely, tobacco, £45,000, and kerosene £14,000. If we are going to tackle cotton we should also have to do something for tobacco, because whereas the Netherlands are sending in a very large amount of manufactured tobacco, there is practically no trade with this country in that particular product.

It would be a very serious breach in the revenue system of Kenya to put these articles on the free list as regards home production, with a view of discouraging foreign competition, and if you were going to deal with it by raising the duties against non-Empire products of course there would be great difficulty in avoiding injustice to the consumer, because the consumer, especially the native consumer, is suffering very greatly from diminished purchasing power. It hits him most because he is paying a much larger proportion of direct taxation, which he cannot escape, and it would be very hard to give effective preference to this country by raising the total price, even if you could achieve your end, because my own impression is that the rates of duties in Kenya and Uganda are so high that they have passed the limit of a diminishing return.

If it should be considered best to keep these Treaties it is most imperative that Kenya and Uganda should not suffer. It is not their fault that in the interests of British trade there may be stronger arguments for maintaining the present system than for changing it. They are willing to do their part and give a preference, and they ought to be given such treatment at Ottawa as they would receive if, as I am sure they would gladly agree, these Congo Treaties were abolished and full preference were given to British products in their markets. Of course there are many reasons which make one very uneasy about the denunciation of these Treaties. The noble Lord described some of the complications. I do not know exactly what is the position of the neutral. We know that the Treaties were originally permanent. Belligerents found them automatically cancelled by the War. They still apply to neutrals, and I am not quite sure what would be the effect of denunciation in the case of trade with these neutral countries. And even among the victorious Powers who entered into the St. Germain Treaty there is a very great obscurity as to the position, because Portugal and Italy have either not ratified the Treaty or have done so subject to considerable reservations. The effect of the Treaties has been extended far beyond their original signatories by means of the most-favoured-nation clause.

Apart from these Treaties there is another and, from the British point of view, far more valuable bilateral agreement with France, which was signed, I think, in 1898, which lets us in on reciprocal terms to the Cameroons, French Equatorial Africa, and other French territory outside of the Congo Basin Agreements in return for their right of free trade in Nigeria and the Gold Coast. I understand that these are most valuable markets, and I would like to know whether the Government are taking steps to get the considered opinion of the exporting trades. I see that the Federation of British Industries, in their notes in connection with the Ottawa Conference, report in a very doubtful strain as to the advantage of abrogating these Treaties They admit that the arguments are very nicely balanced. In view of what they say, I very much doubt, whether the British exporter would like to see root and branch denunciation. It is most important that we should not by denunciation lose the benefit of our right of entry into the French Cameroons and Equatorial Africa.

And there is another complication that, if it be the case that in 1930 the late Government agreed that the Congo Basin Agreements should not be reconsidered till 1935, whereas the bilateral arrangement with the French can be denounced at any time after twelve months notice, if we give notice we shall lose, perhaps in twelve months, the very valuable privileges we enjoy in French territory, and it will be three years before we can begin to get any compensating advantage within the old area of the Congo Basin Agreements. It would appear that what would pay this country best would be to negotiate for a reciprocity in preference on the basis of equivalent value received. If it is practicable, could we not withdraw most-favoured-nation treatment, which has now extended the scope of these Treaties practically throughout the world, from those who are enjoying the advantage of these Treaties without any returns? Can we not limit this reciprocity to those who, either in their Colonies or in their home markets, will give us compensating advantages?

Of course, this would involve very large changes and very difficult and delicate negotiations, but I would suggest that, if the denunciation of these Treaties is found, after examination by our exporting traders, on balance to involve a loss of existing markets, it is quite consistent with Empire economic unity to maintain the existing arrangements. Our trade is in such a condition that it cannot possibly afford to block existing channels, and it is most necessary that they should be kept at full flow and that we should endeavour to dig new ones. The East African Customs Union must not suffer. We must give them most-favoured Empire treatment, but we ought in considering this matter to make sure that we are not proposing to abandon greater benefits to our exporters in the rich and more populous markets of Western Africa to achieve smaller preferences within the British territories, of East Africa.


My Lords, I am sure we must all welcome the very able speech of my noble friend who initiated this debate. He has spoken with that authority and knowledge which we expect from him, whenever he addresses us on the subjects of agriculture and the Continent of Africa. His position as a member of the Joint East African Board also gives him additional authority to speak of these Treaties and other matters on which he addressed us. We have had another very interesting speech from my noble friend Lord Moyne. He and my noble friend Lord Cranworth seemed to me to differ in a large degree, because, whereas Lord Cranworth wished for the wholesale denunciation of these Treaties, I think my noble friend Lord Moyne is much more guarded in his opinions, and thought that that might not perhaps be so easy or perhaps so advantageous.

At this late hour it is, I am sure, a matter of great satisfaction to your Lordships when I tell Lord Cranworth that to a large extent he made the first part of my speech for me. I was going to regale your Lordships with details of the different Treaties which have been made on these matters, beginning with the Berlin Act of 1885, then the Brussels Act of 1890, and winding up with the Convention of St. Germain-en-Laye of 1919. This last Convention was signed after a Conference of representatives of the British Empire, Belgium, Italy, Portugal, France, Japan, and the United States. I differ from my noble friend on one point here, because he said that Italy and the United States did not ratify this Convention. My advisers at the Board of Trade assure me that it was ratified by all the countries except the United States. The result of these instruments has been to assure equality of treatment for the goods, subjects, and shipping of all nations over a large part of Africa, and here I think that I can answer the first question which was put to me by my noble friend.

He asked what advantage has this country ever had from these Treaties. While we may lose in certain directions by being unable to establish preferential treatment for United Kingdom goods in our Colonies, we gain in other directions by the régime of equal opportunity extending over substantial areas belonging to or administered by foreign Powers. Other parts of the Empire are also concerned in trade into these territories, and due weight must be given to their interests. We must also bear in mind the interests of the Colonies concerned, though I have no doubt that if they were satisfied that British interests as a whole were best served by the determination of the Treaties they would readily accept that decision. In any case, the House will, I think, agree that the question must be regarded as a separate and distinct one, and the advantages of the present régime must be weighed on their merits against the disadvantages in the changing circumstances of the present time.

Apart altogether from the considerations which I have outlined, there are difficulties of another order which stand in the way of bringing the present régime to an end. Supposing we were to denounce these Treaties, I understand that the mandated territory of Tanganyika would be precluded by the terms of the Mandate from bringing Imperial Preference into operation. The Mandate, fortunately or unfortunately—it is a matter of opinion—is a permanent one, and, although it can be altered at our request by the Council of the League of Nations, His Majesty's Government do not anticipate that situation arising just at present. At present Kenya, Uganda, and Tanganyika have a close Customs arrangement, including a unified Customs tariff, and if Kenya and Uganda introduced Imperial Preference this arrangement would be upset and the trade between these territories prejudiced. Moreover, I am informed that there would be rather large international obstacles in the way of bringing the present régime to an end.

Now I come to the second question which my noble friend asked me, whether the situation has been reviewed by any committee since 1928. From the point of view of the trade of this country, I should explain that so lately as 1920, ten years after the Treaty came into force, when the occasion arose for reviewing the position generally, the whole question of the advisability of retaining the existing régime in the Conventional area was very carefully considered by His Majesty's Government in consultation with trading and shipping interests in this country and with His Majesty's representatives in the Colonies concerned. Among the bodies consulted were the Association of the British Chambers of Commerce, the Federation of British Industries, and the Chamber of Shipping. The general consensus of opinion at that time was that the existing position should be maintained. I anticipate my noble friend's objection. I do not at all intend to imply that they would necessarily be of the same opinion now as circumstances have changed.

The statistics bearing on the question are not easy to interpret one way or the other since they depend on so many hypotheses. Moreover, in the rapidly changing circumstances of the present time, it is doubtful how far figures relating to any past period are applicable. I hope I shall not be wearying the House if I refer to some of them. There is first the fact that the latest complete figures available are for the year 1030, the year in which the question was last considered, and that there are no separate figures for the large areas of Conventional territory which form only a portion of French, Portuguese, Italian and British territories. For the most important areas covered by the Convention however, the British and Belgian, some assessment of the comparative value of trade can be made. In 1930 the total imports into Kenya, Uganda and Nyasaland were £8,600,000 while imports into the Belgian Congo were 29,300,000. Turning to a comparison of the percentage of foreign and British trade in these areas I find that in 1930 the British Empire held 64 per cent. of the imports into Kenya, Uganda and Nyasaland. In Belgian territory, the only other largo block of territory for which separate figures are available, the British Empire accounted in 1930 for 23 per cent. of the imports and Belgian goods for 52 per cent. Thus in 1930 British Empire trade stood to lose in the Belgian Congo a volume of trade not very far short of the total foreign trade in the British Colonies, all of which they could not under any circumstances expect to gain.

Now I come to the third and, in a way, the most important question asked me by my noble friend. He asked if in 1930 any secret negotiations had taken place with foreign countries—I understood him to say with regard to this Convention. I am glad to give him the categorical answer for which he asked. No secret agreement of any kind was made in 1930 or any other year, but I must add something else. In 1930 a Conference to review the Convention was due to be held. As. a result of the review of the matter, His Majesty's Government informed the other Powers parties to the Convention that they saw no occasion for holding a Conference immediately. They accordingly suggested that it should be postponed until 1935. Some of the Powers accepted this proposal and others sent no reply. It is therefore difficult to say exactly what the position in regard to that is.

I think I have answered all the questions except the last of my noble friend, but, before I answer that question, I will deal with a question of my noble friend Lord Moyne, which does not exactly come within the terms of the Notice. He asked with regard to the denunciation of the Treaties whether His Majesty's Government were taking steps to get the opinion of exporting traders. The answer is in the affirmative. The matter is being discussed and they are trying to get this information.

The last question of the noble Lord, Lord Cranworth, was what steps the Government now proposed to take. I can only give what I suppose your Lordships will regard as a stereotyped answer, but it is perfectly true. His Majesty's Government are giving their earnest consideration to this whole matter, especially as regards its bearing on Ottawa and other Conferences that are taking place. I can promise the two noble Lords who have spoken that the points they have raised will not be lost sight of. Furthermore, may I assure my noble friend that I do not consider my duty finished when I sit clown in a few moments after having answered these questions? When a few months ago I was appointed to answer for this Department I happened to meet my right hon. friend the President of the Board of Trade and I had a talk with him. He is fully aware of the great knowledge of these questions of trade held by members of your Lordships' House and of the important and interesting debates which we sometimes have on these subjects. He expressed the wish to be kept fully informed of what went on in this House and I give this undertaking that I will, probably to-morrow but certainly without undue delay, convey to my right hon. friend, either by personal interview or by letter, the views which have been expressed to-day, the trend of the debate, and the remarks of the noble Lords who have spoken.


My Lords I must express my thanks to my noble friend who has answered for the Government for the courteous and illuminating reply he has given me and I must also thank my noble friend Lord Moyne for his speech, which was to me of the utmost interest. My noble friend Lord Templemore was not quite right in thinking that we were poles apart, because, as a matter of fact, we were fairly near together. I would not dream of denouncing these Treaties unless I was able to secure bilateral treaties. At the same time we would keep the advantages which we already hold and it seems to me more a case of not being off with the old love before being on with the new than anything else. There is not really so much difference. The noble Lord has answered me very fully. He will hardly expect that he has given me every satisfaction, but he has given me some. I confess to a great feeling of disgust to find that, so lately as two years ago, the late Government entered into what does not appear to be a Treaty, but negotiations with various Powers on a matter of such close interest to our Empire without any more information to those who ought to have had it. In view of the answer I have had, I feel that no good purpose could be served by pressing my Motion and, with your Lordships' leave, I beg to withdraw.

Motion for Papers, by leave, withdrawn.