HL Deb 29 June 1966 vol 275 cc699-703

4.12 p.m.

LORD BESWICK

My Lords, I should like to repeat a Statement on the United Kingdom/New Zealand trade negotiations given by my right honourable friend the President of the Board of Trade in another place. The Statement is as follows:

"I am glad to report to the House the successful conclusion of the trade discussions which I have had with Mr. Marshall, Deputy Prime Minister and Minister of Overseas Trade of New Zealand, during the past few weeks.

"Our trade relations with New Zealand are at present governed by the United Kingdom/New Zealand Trade Agreement, 1959, and by a separate agreement of 1952 relating to meat. The 1959 Trade Agreement provides for the continuance of duty-free entry for New Zealand products into the United Kingdom, for certain preferences in her favour, for unrestricted access until 1967 of New Zealand dairy products and pork, and for possible anti-dumping action for the benefit of New Zealand exports to the United Kingdom. In return the United Kingdom received guaranteed margins of preference on an extensive list of products.

"The effect of the understandings reached in the talks concluded yesterday is that the 1959 Trade Agreement remains as the basis of trade relations between the two countries; but a number of important matters were agreed which will modify the Agreement:

  1. (1) the admission to the British market without restriction of quantity of imports of dairy products and meat from New Zealand will be extended until September, 1972; imports of apples and pears from New Zealand will be treated in the same way;
  2. (2) New Zealand will guarantee margins of preference for certain 700 United Kingdom exports at a higher rate than at present provided for by the Trade Agreement; and will bind duty-free entry for tariff items to be listed; this will cover a further £8 million approximately of our exports;
  3. (3) revised arrangements have been agreed for the operation of the butter quota system;
  4. (4) Trade Agreement of 1959 will be extended for three years from 1st January, 1967.
"I am sure that the results of the trade negotiations will be welcomed both in New Zealand and in the United Kingdom.

"The understandings which we have reached still require in some respects to be worked out in detail. It is intended to embody them in a Protocol to the Trade Agreement which will be laid before the House as soon as it has been signed. I hope that this will be in about 3 weeks."

LORD DRUMALBYN

My Lords, I should like to thank the noble Lord for having repeated this Statement in the House, and I would ask him to confirm—I gathered from the tone of what he said that it is so—that when he talks of a successful conclusion of these particular discussions he means one that has been concluded in mutual good will and is likely to be regarded as successful on both sides. May I ask the noble Lord one or two questions? I understand that the difference in the timing, the duration of these arrangements for the admission to the British market of the meat and dairy products, and so on, and for the rest of the Treaty, is due to the fact that meat, and only meat, was the subject of a separate agreement. I wonder whether he could tell us why it was necessary to prolong this disparity between the duration of the agreements, and whether it would not have been possible to end them at one time.

Secondly, it is not quite clear for how long New Zealand is guaranteeing the increased margin of preference for United Kingdom exports and the binding of duty-free entry for others of our exports. I take it that is for the duration of the Treaty—that is, for three years from January 1, 1967. I would just comment that the proportion of our trade to which this arrangement applies is, I understand, about one-fifteenth of our exports. I do not know whether the noble Lord could tell us what these particular exports are. I think your Lordships are always interested in the butter quota system for which revised arrangements are being made. May I ask what the changes agreed upon are? May I ask whether the duties on non-Commonwealth butter still remain suspended and whether New Zealand's proportion of imports is increased under this arrangement, or are they guaranteed at the same level as before?

We pay higher regard, perhaps, to our trade arrangements with New Zealand than to those with any other country, despite New Zealand's great distance from us, and their per capita purchases of our goods are high, although the balance of trade between us is about three to two in New Zealand's favour. May I ask the noble Lord whether there is any particular significance in the timing of this announcement in the middle of this debate?

LORD BESWICK

My Lords, I will try to answer all those questions. The significance of the timing of the announcement is, of course, that the agreement was reached yesterday. I would say at the outset that the atmosphere of these talks was most friendly, and I think it can be said that the results generally are acceptable to both sides. I was asked about details of the different articles which will be found by the new tariffs. This is the sort of detail which is still to be worked out and which we hope will be completed and published in about three weeks' time. The same applies to the imports of butter. I cannot give the figure. Again it will be published when the Protocol is signed in about three weeks' time. I can say that the preference on butter will be suspended throughout the period for which this agreement is valid.

There was a further point about the special arrangements between this country and New Zealand. I should like to confirm what the noble Lord has said: that we do accept here that there is a special relationship and a special agreement which has worked out to our mutual benefit. I think the fact is, as the noble Lord says, that our exports to this small country of about 2½ million people amount to one-fifteenth of our total export business.

LORD OGMORE

My Lords, I am most grateful to the noble Lord for repeating this Statement to us to-day. I regard it as an extremely important Statement, not least because of the context of the debate we are having this afternoon and its possible impact upon that debate, or upon any results that come out of the subject of the debate. I have not had an opportunity of discussing with my noble friends their views on the question as a whole; therefore I should not like to go into any detail on the future of this scheme such as the noble Lord, Lord Drumalbyn, has gone into to-day. Speaking, however, entirely for myself I wonder whether it is wise to take in effect all the exports of New Zealand. New Zealand is fertile. I appreciate to the full the long and happy association that we have had with New Zealand. But, as we discovered yesterday (if we did not know it already), two-thirds of the world is under the hunger line, and New Zealand could probably make a far greater contribution than she does to the millions in South East Asia and other parts of Asia, many of which are Commonwealth countries and whose people would, I am sure, appreciate the opportunity of buying New Zealand meat and other products. I should like to know whether Mr. Marshall and the President of the Board of Trade at any time considered this much wider aspect of New Zealand trade in their recent talks.

LORD BESWICK

My Lords, although I appreciate what my noble friend has said—I always refer to the noble Lord, Lord Ogmore, as "my noble friend"—I do not think this arrangement means that any food supplies which we take from New Zealand are being diverted by virtue of this agreement from countries which we were discussing yesterday. This is not so. It so happens that butter is in ample supply and we know that, both as regards meat and butter the New Zealand Government would be quite pleased if alternative markets were available.

I should like to emphasise, now we are talking about mutual benefits from this trade agreement, that New Zealand buys from us some £130 million of goods a year. Apart from our Irish neighbours, they buy more per head than any other country in the world. That is to our mutual benefit. Although the noble Lord, Lord Drumalbyn, said that the ratio of trade was 3 to 2, as Mr. Marshall was quick to point out when this same ratio was put to him during the course of the talks on the agreement, if you take into account invisible exports the balance is not 3 to 2 but 3 to 3.

LORD DRUMALBYN

My Lords, I wonder whether I might return to the point I made before: why it is that there should be this difference of timing in regard to the two sides of the agreement. The noble Lord said that there was a separate agreement relating to meat dating from 1952;but the arrangement to continue to September, 1972, also covered dairy products, and it also covered apples and pears. It is a long time for which to make an agreement of this kind. I wonder why this could not have been brought into the general agreement, which is formed for three years from the beginning of January next year.

LORD BESWICK

My Lords, I am much obliged to the noble Lord, and I am sorry I did not refer to this question earlier. The fact is that the original trade agreement was at six months' notice, and it provided for a guarantee of dairy products and pork until 1967; so there has always been this difference in the timing. So far as agricultural produce is concerned, there is an advantage in having as long a period of stability as possible, and we were able to give this five years' period of stability without committing ourselves, so far as the rest of the trade agreement was concerned, beyond the three years. This, it was thought, was to our advantage.

LORD DRUMALBYN

My Lords, does it mean we are committing ourselves to take some New Zealand produce for a longer time than they are entering into any commitment vis-à-vis our exports?

LORD BESWICK

My Lords, what we are doing is guaranteeing for ourselves a stable and fair supply of dairy produce over this period of time.