COMMONWEALTH PREFERENCE AREA (REMOVAL OF WEST CAMEROON) ORDER 1963

HL Deb 19 July 1963 vol 252 cc403-14

11.32 a.m.

LORD DERWENT

My Lords, the effect of the Order before the House, if approved, will be to remove West Cameroon from the Commonwealth Preference Area as from October 1, 1963. Noble Lords will expect me to explain why Her Majesty's Government want to do this, and in order to make the reason clear I must remind the House—I will do so as briefly as I can—of the sequence of events over the last two years or so.

On October 1, 1961, as a result of a plebiscite held earlier in the year, the United Nations Trusteeship Territory of Southern Cameroons, hitherto administered as part of Nigeria by Her Majesty's Government, joined the Republic of Cameroon. The Republic subsequently became a Federal Republic composed of two federated States. These were called East and West Cameroon. East Cameroon is the former French Cameroons and West Cameroon is the former Southern Cameroons. The Import Duties Act, 1958, provides that any country administered by Her Majesty's Government under the trusteeship system of the United Nations shall form part of the Commonwealth Preference Area. If nothing had been done, West Cameroon would automatically have lost her status as part of the area from the date on which she ceased to be British trusteeship territory that is to say on October 1, 1961. In the interests of the West Cameroon economy, however, Her Majesty's Government decided that the status quo at that period should be maintained for a year, in order to give the territory time in which to adjust its trading arrangements to its new political circumstances, and an appropriate clause was included in the Finance Act, 1961, which had the effect of continuing West Cameroon's position as part of the Commonwealth Preference Area until October 1, 1962.

A year later we were engaged in the Brussels negotiations which involved, among many other subjects, the difficult questions of the appropriate tariff arrangements for tropical produce, our relationship with the overseas associated territories of the European Economic Community and the possibility of negotiating association arrangements for countries which were part of the Commonwealth Preference Area. Given these developments, we thought it right to maintain West Cameroon's position in the area for another year, by which time we expected to be clear about the outcome of the Brussels negotiations. Effect was given to this decision by an Order in Council made under Section 2 (4) of the Import Duties Act, 1958. In announcing this decision in June 1962, my right honourable friend, the President of the Board of Trade said the present intention was that the inclusion of West Cameroon in the area shall be maintained until September 30th, 1963, but not beyond that date. The question would, he said, be reviewed again not later than the following April—that is, April this year. We are now, of course, clear about the outcome of the Brussels negotiations, and there was no uncertainty on that score in the review of the West Cameroon question which has now been carried out by Her Majesty's Government, but other factors had to be carefully considered.

The effect of the removal of West Cameroon from the Commonwealth Preference Area will be to make her produce liable to the same rates of import duty as any other foreign country. Her main export is bananas, and these will become dutiable, if the Order is approved, at £7 10s. 0d. per ton, equivalent to about ¾d. per lb., after the end of September, instead of being admitted, duty-free as they are now. Those concerned with the trade have expressed grave anxiety about the possible effect of the imposition of this duty on the prospect for West Cameroon banana-growers of selling their produce at economic prices. They fear that they may not be able to sell the bananas elsewhere at equally remunerative prices. This aspect has been very carefully considered. While the duty will clearly be a handicap so long as our severe restrictions on imports of dollar bananas are maintained, the price of bananas in Britain is likely to remain higher than in most other major consuming countries. The Cameroon will have the advantage of this. Their bananas, unlike the dollar area bananas, will still come here without any quantitative limit. Moreover we expect West Cameroon in due course to develop outlets in the markets of the Six.

As against these factors, we have to take into account the philosophy underlying the Commonwealth Preference system. It is self-evident that there Is absolutely no reason why we should have a tariff at all on any tropical produce except—and this is important—to provide a margin of advantage for Commonwealth producers. Our main suppliers of bananas are Jamaica and the Windward Islands, both vitally concerned to increase their export earnings and worried about the tendency, especially in the winter months, for the British market to be over-supplied with bananas, with consequent effects on the price that can be obtained for them. These coun- tries do not see why they should share their preferential advantages in our market with West Cameroon, which is not only outside the Commonwealth but part of a country—and I ask your Lordships to remember this—in an associated relationship with the European Economic Community. This means that the Federal Cameroon Republic enjoys tariff advantages for her produce in the markets of the Six.

We had to balance the merits of these opposing considerations. We had already given West Cameroon two years' grace. My right honourable friend had made it quite clear last year that Her Majesty's Government's intention at that time was to maintain West Cameroon's preferential status only until the end of September. West Cameroon is now entitled to preferential access to the markets of the Six. It is anomalous to continue to grant preference to part only of an independent country which has never been remotely associated with the Commonwealth; that is, the other part of the Federation of Cameroon. Her Majesty's Customs could never be happy with an arrangement which obliged them to differentiate in tariff treatment between two parts of the same sovereign State; it obviously would not work. Jamaica and the Windward Islands were strongly of the view that the status of West Cameroon as part of the Preference Area should now be terminated. The decision was not an easy one to take, but the cumulative weight of these considerations led Her Majesty's Government to decide, with some reluctance, I admit, that it would be right to take West Cameroon out of the Commonwealth Preference Area after the end of September this year. My Lords, I beg to move that this Order be approved.

Moved, That the Commonwealth Preference Area (Removal of West Cameroon) Order 1963 be approved.— (Lord Derwent.)

LORD OGMORE

My Lords, I am grateful to the noble Lord, Lord Derwent, for explaining this Order so fully and, in my view, so fairly. He came to one conclusion that I do not share with him, but he gave us a fair résumé of the facts as I know them. The situation is, I think, a difficult one for this country. West Cameroon has been part of the British Empire and of the Commonwealth since the 1914–18 war. It was formerly the German Cameroons, taken over by British and Nigerian troops in that war. The territory then received a mandate from the League of Nations, that was subsequently turned into a Trust, and a Trust Agreement was entered into with the United Nations. During that whole period of forty-odd years trade with this country was built up by the West Cameroons; and, as we all know, trade, as it ebbs and flows, cannot suddenly be switched away almost at a moment's notice without great hardship.

The United Nations, of which I am a strong supporter, occasionally does, I must admit, some extraordinary things. The noble Lord, Lord Colyton, has on many occasions pointed out with great force to your Lordships the extraordinary results of their action with West Irian; and I am very glad he does so, because unless we are careful there is going to be a most awful tragedy there, with the Indonesian Government having control of these unfortunate and primitive people. But that is not the question this morning: the question is the results of the extraordinary action of the United Nations in the Cameroons. They determined on a plebiscite, and they asked two questions, both of North and of South. They asked, "Do you want to go in with Nigeria, or do you want to go in with the French?" That was the only alternative that was put to these people. Many of them would undoubtedly have liked to stay with the British; they would have liked to stay in the Commonwealth; they would have liked to become an independent country of the Commonwealth. They have a certain amount of assets—far more assets, I may say, than many others who have been admitted into the Commonwealth as independent countries. But they were never allowed that choice.

Now what happens? They are now part of the European Economic Community, in an associated status. What the noble Lord, Lord Derwent, says is quite true, and they will get certain advantages from that. But the fact is that their trade is with this country, and they will lose £7 10s. a ton on bananas, or, at least, their bananas will be £7 10s. a ton more than West Indian and other Commonwealth bananas. This comes at a most unfortunate time for the Cameroons because last year, in common with those of most other primary producers, their products were very severely affected. As we all know, as the world gets richer, the rich countries become richer and the poor countries become poorer, not only in comparative terms but in actual terms; and this is an example in point. Last year, oil palms, rubber and tea were all down in price; the only commodity up in price was cocoa. So far as bananas are concerned, as the noble Lord, Lord Derwent, said, they are the staple export crop. Last year, bananas had their worst year for very many years indeed. I should have thought that it was the worst year so far as price is concerned for at any rate the last ten or fifteen years. One cannot raise an objection to this Order because they are not any longer in the club, and if you are not in the club you cannot expect the perquisites of membership. As I say, I think they were not given the opportunity, or very much of an opportunity, of remaining in the club, but they did choose to go with the French. That has of course made certain difficulties of language and things of that kind; but there we are; they have got to accept that.

What I am asking the noble Lord is whether the Government—and I am sure they can—will do everything in their power to make easy the transitional position. It will be some years before the Cameroons will be able to swing their trade to any large extent either to Scandinavia or to the Community. There is no question about that. After a country has been trading for forty years with this country—and we are the main market for their bananas—it cannot within six months swing the trade anywhere else. We all know that: it is impossible. I would ask the noble Lord, and through him the Government, to do everything possible to make this transition easy. This is almost a matter of life and death for this territory. I do ask him to look at that most favourably.

There is just one other point I should like to make, and this is the point on which I do not agree with the noble Lord. He says he does not think there is going to be any difficulty about the market; that we shall be able to take all the supply. I only wish I felt that, but in view of the fact that the West Indies does not feel that—

LORD DERWENT

My Lords, if I may interrupt the noble Lord—I will answer his other points later—I did not say quite that. What I said was that they would not have any quantitative limits put on their exports to us, unlike the dollar area bananas which have a quantitative quota.

LORD OGMORE

I appreciate that may be some slight advantage—provided, of course, that the West Indies cannot supply us with all the bananas we need, because of course they will get the tariff preference. The West Indies will obtain Imperial preference. Therefore, if they can supply a very considerable amount of the bananas we need that dollar point will not be much satisfaction to West Cameroons. However, I do not want to press this any further this morning. I would ask the Government, who have shown themselves sympathetic in this matter—they have given an extension of the term, for the Imperial preference to run on; they have already shown considerable sympathy for these people—to extend that sympathy in every way they can into the future in order to help these poor people.

LORD MOYNE

My Lords, it is with great hesitation that I venture to say anything on the spur of the moment on this subject, on which I claim no expertise at all, but I should like to say just a few words in support of what the noble Lord, Lord Ogmore, has said. I was in West Cameroon earlier this year for a few days. I found that great anxiety prevailed there among the banana exporters regarding the continuance of Imperial preference, which they felt was so vital to them. I also found an anxiety among the importers of British products regarding the duties that the French area of the Common Market were likely to impose upon them, to some extent in retaliation. I must at this moment declare an interest, because some of the stout which bears my family name goes to the Cameroons, and that is how I came to hear about these things.

It seems to me that our entry into the Common Market, as I think the noble Lord, Lord Derwent, rightly pointed out, would have removed these difficulties. Is it not possible that some degree of cooperation in these matters might be arrived at with the French authorities for our mutual benefit—for the mutual benefit of the French Commonwealth and our own in these territories? With the history of their British connections, could they not be treated in an exceptional way? Is it not better, instead of striking the first blow in a commercial war, to negotiate a special arrangement? Have we even discussed this question on its merits with the French authorities? The noble Lord, Lord Ogmore, has admitted that the West Cameroon is not in our club. Can we not form a little special club with our friends the French in this small but primitive and, in many ways, rather poor area which deserves the help of both our great countries?

THE EARL OF LISTOWEL

My Lords, I had not intended to intervene, but this discussion has become, I think, so interesting and important that I should like to make just two observations. First of all, I agree entirely with what the noble Lord, Lord Ogmore, has said, that this Order is inevitable, even though we may regret it, because it is always the case that a Colony or a Trust territory which either becomes foreign or joins a foreign country loses the advantages of Imperial preference. I do hope that, as both noble Lords have said, the Government and the noble Lord opposite who is responsible in this matter will do everything they can to soften the blow for West Cameroon.

To my mind, this raises the much broader issue of trade policy. As both noble Lords have said, if we had gone into the Common Market this problem would not have arisen. Then there would have been free trade in bananas between us and the Six (we should have been the seventh) and the Cameroon Republic. We have not gone in, and the result is that this foreign country will have to pay the same rate of duty as other foreign countries for its agricultural products.

Does this not really raise the issue of trade policy in relation to developing countries? We all know that these developing countries will benefit more from an increase in trade than from aid; and the most important responsibility of the developed or industrialised countries like our own is to see that they are able to expand their trade. Is there not an overwhelming case for the free entry of tropical agricultural products into all the three trade blocs to which the developed countries belong—into the United States, the United Kingdom and the Six? Will Her Majesty's Government do all they can in negotiations with GATT and, of course, through normal diplomatic channels to urge on the United States Government and the Governments of the Six that restrictions on the entry of primary agricultural products—I will limit it at this moment to agricultural products and foodstuffs—should be removed altogether at the earliest possible moment? That is my second observation.

Now may I ask one question? Of course, the removal of preferential treatment on imports from the Cameroons also means that the Cameroon Republic will remove preferential treatment from exports from the United Kingdom. Can the noble Lord tell us what exports are likely to be affected and what rate of duty there will be in the Cameroon Republic on British exports?

11.52 a.m.

THE EARL OF MANSFIELD

My Lords, I should like to congratulate the noble Lord, Lord Derwent, on the clarity with which he explained this Order, and also Her Majesty's Government most heartily on their bringing the Order into being. At this stage I must declare a small interest in the subject, in that I grow bananas in Jamaica; but it is not so much on my own behalf that I am speaking as on behalf of the whole of the banana growers of the West Indies, to many of whom bananas represent their staple, and often their only, considerable and very valuable cash crop. The noble Lord, Lord Ogmore, put forward a rather pathetic plea on the ground that the West Cameroons had been under British administration for something over forty years. I would remind your Lordships that Jamaica has been British for over 300 years and that the Windward Islands have all been British for a period of from 150 years upward. Therefore I think that we owe them more consideration. Furthermore, they became ours by conquest whereas the Cameroons were taken over only by agreement with our allies at the end of the 1914–18 war.

If this Regulation were not brought into effect, the result on the West Indian banana trade might well be serious. Bananas are one of the most considerable products of Jamaica. At one time—although I am not absolutely sure of this—bananas were the third most important export; in fact, they were second only to sugar. Now bauxite has taken the lead. In the Windward Islands bananas are becoming an ever-increasing export. I would remind your Lordships that a great deal of the ground in these Islands is not suitable for growing anything else. Therefore, in my opinion, it is essential that British markets should remain open preferably to bananas from our own territories; and however much we may sympathise with the unfortunate position in which the West Cameroons has been placed by one of the all too numerous ill-considered acts of the United Nations, I feel it is to the West Indies, who, after all, are almost everywhere "bursting at the seams" and whose inhabitants have very few other resources on which to make a living, or to exist, that our first loyalty is due.

11.55 a.m.

THE EARL OF IDDESLEIGH

My Lords, as an old "West Coaster," I venture to support the views of the noble Lord, Lord Ogmore, the noble Earl, Lord Listowel, and the noble Lord, Lord Moyne. I would call attention to the extreme inconveniences that are going to arise through the erection of high tariff barriers in West Africa. The failure of Britain to enter the Six will inevitably create increasing barriers among Colonies which form essentially a geographical and commercial unit. What temptation are we placing upon banana exporters of the Cameroons to slip a few crates of bananas across the Nigerian frontier, receiving perhaps in return a few crates of Guinness! This is a problem to which we all should devote careful attention. The frontiers between these countries cannot become high tariff barriers without grave inconvenience.

LORD MILVERTON

My Lords, I must apologise for having missed Lord Derwent's introductory speech; but I feel I ought to support very strongly what has been said by the noble Earl, Lord Mansfield, in relation to the West Indies. I ought to declare an interest, as I am Chairman of the London Committee of the Jamaica Banana Producers' Association. Surely charity and consideration of this kind begins at home. I know a good deal about this question, because I started the Cameroons Development Corporation at the time when I was the Governor of Nigeria and we were looking after that particular territory; and I know very well the amount of competition there is and was between Jamaica, the country I had come from, and what was at that time the Cameroon section of Nigeria.

I cannot see why we should make this particular exception. It may be unfortunate for some people there; but where is this sort of thing going to end if you start making exceptions? Surely one of the advantages of belonging to the Commonwealth must be the mutual aid and consideration in regard to trade. I do not wish to repeat what has been said so much better by the noble Earl, Lord Mansfield, but I feel that any plea put in on behalf of the poverty of people in the Cameroons could well be matched by those who know very well the difficulties of the West Indies, and any country like Jamaica, which find it extremely difficult to support an ever-growing population with an inadequate area for sustaining them.

LORD DERWENT

My Lords, may I start by briefly thanking my noble friends, Lord Milverton and Lord Mansfield, for their support. I will mention the points they raised in the course of my reply. I should first like to refer to what the noble Lord, Lord Moyne, said. He wanted to start a separate club in West Africa. May I remind him again that the West Cameroons has, rightly or wrongly, by its own choice, become part of an independent country which has never had any Commonwealth connections? It enjoys preferential advantages in the markets of the Six which are not shared by any other part of the Commonwealth.

LORD MOYNE

My Lords, I admit that but I was really suggesting a little bargaining, so that both sides, French and British, would get trading advantages for the benefit of that area.

LORD DERWENT

I will deal with that and the point of the noble Earl, Lord Iddesleigh, when I answer the noble Earl, Lord Listowel. But I repeat that there would be no tariffs on any of the primary products from any of these countries of West Africa into this country if it were not a question of protecting part of our Commonwealth other than ourselves. This applies to countries outside the Community and will not vary for us, so we are no worse off in this respect than anyone else. This will affect our trade with West Cameroon, but we do only about £1 million worth of trade a year with them. At this moment we are having talks with West Cameroon, because we are anxious to help, if we can.

The noble Earl also asked how this would affect our exports to these primary producing and backward countries. He will remember that it was announced some time ago that tea and tropical hardwoods were to be freed of tariffs. We had hoped to get these negotiations completed so that the tariffs could be done away with late this summer, but we had agreed to do it at the same time as the Community, and they have been held up in their negotiations. We hope to sign an agreement with the Community shortly and to do away with these tariffs on January 1. But the fact that we have started with these two particular products does not mean that we shall not continue with our efforts to make other products free of tariff. We shall go on doing our best to work with the Community in doing away with these tariffs.

On Question, Motion agreed to.