HL Deb 31 May 1967 vol 283 cc24-9

3.43 p.m.


My Lords, with the permission of the House, perhaps at this stage I may repeat a Statement which has just been made in another place by my right honourable friend the President of the Board of Trade. The Statement is as follows:

"The essential elements of agreement in the Kennedy Round of trade negotiations were reached on May 15. The Secretariat of the GATT are now engaged in compiling the detailed results of the bargains made both multilaterally and in the numerous bilateral negotiations between individual participating countries. I shall in due course present to Parliament a White Paper setting out these detailed results so far as they affect this country. In the meantime, I can give the House a general account of what has been done.

"Reductions in industrial tariffs will be very substantial. So far as can be judged now, the average reductions made by the major trading countries in their tariffs on industrial goods will be over 35 per cent. This compares with the average of about 7 per cent. achieved in the previous Dillon negotiations completed in 1962. The bilateral arrangements between the United Kingdom and the European Economic Community, the United States and Japan provide for reciprocal reductions which are estimated to average 37 per cent., 38 per cent. and 33 per cent. respectively and affect well over 70 per cent. of our exports to them. British exporters will also benefit from reductions in most favoured nation tariffs negotiated bilaterally between other participants. Large reductions in chemical tariffs have been agreed, and the United States has undertaken to seek legislative authority for the abolition of the American Selling Price system which affects trade in benzenoid chemicals. As a contribution to the final settlement, which called for concessions from all the main participants, the United Kingdom agreed to reduce both its ad valorem and specific duties on iron and steel by 20 per cent.

"The world-wide reductions in tariffs will begin to be made in 1968 and will normally be spread over five stages.

"A new code of practice for dealing with allegations of dumping has been agreed which should be of considerable benefit to British exporters.

"For the first time in the history of such negotiations, the Kennedy Round settlement includes a substantial agricultural element. The essentials of an agreement covering trade in cereals have been agreed. These provide for minimum and maximum prices for wheat; the minimum price is above that of the existing international Wheat Agreement, but below current price levels. They also provide for a food aid programme totalling 4½ million tons a year for the benefit of the developing countries. The British contribution to the cost of this programme will be 5 per cent.

"The less developed countries should gain considerably from the settlement, which included reductions of barriers to trade in tropical products, primary materials and manufactured goods of interest to them.

"I regard the outcome of these protracted negotiations as highly satisfactory and of great advantage to British industry. The high degree of success achieved must be attributed to the wisdom and patience of the negotiators, and particularly of the Director General of the GATT, who played a vital part, notably in the final stages."


My Lords, I should like to thank the noble Lord for the Statement he has just made. I suppose the broad lines of it were already known from what has been said in the Press, but from what the noble Lord has told us to-day it is none the less welcome. This has been a long haul, stretching over something like four years. The outcome, which came at the last moment, was due, as the noble Lord said, very much to the Director General of GATT, and I should like to join with the noble Lord in expressing the great appreciation that is felt of his efforts to secure this general agreement.

It would be inappropriate for me to go into any detail on this, particularly as we are to have a White Paper, and perhaps, if necessary, we can have an opportunity of discussing it. However, I should like to ask one question. The noble Lord said that the world-wide reductions in tariffs will begin to be made in 1968, and will normally be spread over five stages. Does that mean that each stage is an annual one, or will it take a much longer time, or possibly a shorter time than five years, to bring the whole thing into operation? The only other point is this. I am sure we all welcome the new code of practice for dealing with allegations of dumping. I would hope that the United States Government will be successful in persuading Congress to abolish the American Selling Price system.


My Lords, I, too, welcome the Statement and would express congratulations to the participants in the Kennedy Round negotiations on achieving such a successful result. I should like to ask one question on the new code of practice for dealing with allegations of dumping. Can the noble Lord give any indication as to when those details may be published?


My Lords, before my noble friend replies, could he say a little more about the reduction of ad valorem and specific duties on iron and steel, and what we get, particularly from Europe, in respect of that?


My Lords, the questions get more difficult as we go on. To deal first with the points raised by the noble Lord, Lord Drumalbyn, the answer is that this is in five annual stages, and it is the hope that by 1972 the whole of the Kennedy Round Agreement will be put into practice. So far as dumping is concerned, this is, as the noble Lord well knows, a highly complicated matter, and I hope that this will be one of the matters that will be dealt with and explained fully in the White Paper which will be published as soon as possible. The complexity of the subject is one of the reasons why the White Paper is not available at present.

With regard to my noble friend's question about iron and steel concessions, it is not possible simply to say that in return for this we receive that. The whole matter was a complex system of bargaining, in which major concessions were made by all the participating countries; and reduction in iron and steel duties was a very large part of our own contribution to those concessions. I think the important thing to emphasise is this very considerable 35 per cent. reduction in the tariffs which affects approximately 70 per cent. of our exports to the major trading countries, and that clearly will be of enormous benefit to the whole of British trade. So, even though we have made concessions, we must remember that we cannot in any bargaining get everybody else to make a concession and make none ourselves. I am satisfied that we have a good bargain out of this.


My Lords, is my noble friend aware that I should like to congratulate everybody in the negotiations on the Kennedy Round? It is an outward looking thing in the economic field. Can he tell us why we should therefore pursue the Common Market negotiations?


My Lords, I wonder whether I might ask the noble Lord one more question. When the White Paper is published, will it say how the interests of Commonwealth countries which enjoy tariff preferences in this country are affected on those preferences?


My Lords, that will certainly be set out in the White Paper. There are considerable benefits to Commonwealth countries in reductions in tariffs from countries other than ourselves. I can assure the noble Lord that their interests have by no means been forgotten. I think one can safely say that in most cases they are fairly well satisfied.

I am grateful to my noble friend Lord Blyton for his kind remarks and for his added congratulations. It is certainly true that the Kennedy Round is an outward looking achievement. It will promote world trade, and we hope that any future negotiations of any associations elsewhere will have an equally happy result.


Our Government were against it.


My Lords, I do not know whether it is possible—not in the White Paper, but in some other document—to show how the rate of duty, after this Round is over, compares with rates of duty under the Common Market. It would be an extremely interesting comparison to see, if it is at all possible to give it.


My Lords, I will certainly bear that in mind. We do not want to make the White Paper too voluminous; we want it primarily to show what has in fact been achieved by the Kennedy Round. But I think the noble Earl's suggestion is very valuable.


My Lords, I think it would be quite inappropriate to put that information in the White Paper, which will deal with what has been achieved. On the other hand, it would be extremely useful to know—perhaps it could be done through some public relations document of some kind—how the two compare.


My Lords, did the discussions embrace also the internal taxation policies of any of these countries?—because the internal tax levied on tropical produce by some of the continental countries is much more devastating to the economy of the tropical country than are tariffs.


NO, my Lords, they dealt with tariffs and similar types of restriction on imports. That was all that was dealt with.


My Lords, could my noble friend say whether the advantages extended to the Republic of South Africa, which afterwards withdrew from the Commonwealth, are to be maintained?


My Lords, with great respect, I do not think that that is a question which arises from this Statement or, indeed, came into the Kennedy Round.