HL Deb 18 April 1978 vol 390 cc1078-87

7.27 p.m.


My Lords, I beg to move that the draft European Communities (Definition of

Treaties) Order 1978, and the draft European Communities (Definition of Treaties) (No. 2) and (No. 3) Orders, 1978, which were laid before this House on 20th March, be approved.

The Schedule to the first order contains four co-operation agreements between the EEC and the Mashraq countries; that is to say, Syria, Jordan, Egypt and the Lebanon. The Schedule to the (No. 2) order 1978 contains Agreements between the European Coal and Steel Community, and the same Mashraq countries, while the (No. 3) order contains similar agreements between the ECSC and the Maghreb countries; that is, Tunisia, Morocco, and Algeria. The agreements which are the subject of the present orders are similar to the three EEC/Maghreb agreements which the House debated last November. They represent another important plank in the Community's Mediterranean policy, known as the overall Mediterranean approach.

This approach, devised in 1972, is aimed at putting the Community's trade and aid relations with its developing Mediterranean neighbours on a more coherent footing. Previously there had been only a series of piecemeal arrangements, but since 1972 the object has been to treat the developing Mediterranean countries as consistently as possible, bearing, in mind their different needs and capacities. As applied to the Mashraq countries, this approach has meant revising and improving existing agreements with Egypt and the Lebanon, and concluding, for the first time, agreements with Syria and Jordan.

As regards contents, noble Lords will, I hope, have found adequate detailed information in the Explanatory Memoranda, which have been laid before the House, accompanying the texts of the Agreements contained in the various Command Papers. I shall, therefore, confine myself to a few general remarks about the provisions of the treaties. With regard to the trade provisions, the most notable feature of the EEC Mashraq agreements, covered by the order, is the encouragement they give to the development of industry in the four countries concerned through the almost complete removal of tariff barriers on those countries' industrial exports to the Community. In addition, the Community has agreed to forgo reverse preferences; that is, the Mashraq countries are not required to reduce the tariffs which they apply to Community exports for the purpose of protecting their own developing industries.

I suppose there is a danger that in encouraging industry in developing countries the Community will harm its own industries, particularly those which are currently experiencing difficulties, such as the textile and oil refining industries. To guard against this danger and to strike a balance between the spirit of co-operation and that of prudence, the Community has retained the right under the Mashraq Agreements to apply the full rate of Customs duties on quantities of products, such as certain textiles and refined petroleum products, shipped in above certain ceilings. This right expires at the end of 1979; but thereafter the Community will continue to be protected by clauses in the agreements themselves providing for safeguard measures to be taken in the event of upsurges of imports causing serious economic disruption.

On the agricultural side, under the terms of the Mashraq Agreements the Community will grant tariff concessions on various products such as citrus fruit, vegetables and grapes. As with the industrial concessions, various restrictions are placed on these concessions to protect the Community's own agricultural production, particularly by application of calendars—that is a phrase which rather attracts me, the "application of calendars"—which means that tariff concessions are granted only for periods during the year when there is little or no Community production of the product in question.

Besides laying down terms of trade, the treaties before us today also make provision for economic and financial co-operation with the Community. The precise nature of the economic cooperation remains to be defined in future discussions between the Community and its partners. The treaties do, however, lay down broad guidelines—such as promotion of private investments, promotion of businessmen's visits, assistance with marketing and co-operation in the fields of science and technology—and also provide for the creation of machinery to supervise the carrying out of this co-operation. This machinery will take the form of Joint Co-operation Councils meeting yearly to review progress and decide how co-operation can best be defined and further pursued.

With regard to financial co-operation, the details vary, of course, from treaty to treaty, and they are set out in the Explanatory Memoranda. In the case of the Mashraq countries, the financial co-operation is mixed; that is, it consists of European Investment Bank loans, raised on the world market, which are then extended to the Mashraq countries on concessionary terms, thanks to interest-free subsidies provided from the Community budget. In addition, in some cases there are grants.

In looking at the detail of the various agreements it is important to remember that they are intended to form a composite whole aimed equally at encouraging trade and at promoting the development of the countries concerned through co-operation with the Community. Each aspect of relations which the agreements cover—trade, economic co-operation and financial co-operation—is intended to be complementary to the others. Thus, trade concessions on industrial products should, when the agreements come into force, be matched by Community-backed investment in those industries which can eventually find markets for their products inside the Community. This approach towards development as something inseparable from trade policy represents the extension into the Mediterranean of the philosophy behind the already existing Lome Agreement between the Community and 52 African, Caribbean and Pacific States, which are all, of course, developing countries, though the stress in the Mashraq and other Mediterranean agreements is inevitably slightly more on industrial developments than on agricultural developments, given the differences between the economies of the Mediterranean countries and those of the Lomé countries.

The agreements we have before us are not only important economically and developmentally. They also contain a political dimension, in that throughout the negotiations a close parallel was observed between the way the Mashraq countries were treated and the way Israel is treated in its agreements with the Community. This parallel reflects the Community's even-handed attitude in the Middle East

question. Politically, commercially and developmentally, therefore, the treaties before the House today represent important achievements for the Community. As additions to an already long list of agreements between the Community and third countries, the agreements reflect what I think may fairly be described as the outward-looking character of the Community, and also the way other countries, particularly developing countries, increasingly look towards the Community as a partner.

The Schedule to the (No. 2) Order 1978 covers four European Coal and Steel Community Agreements with the Mashraq countries; that is Syria, Jordan, Egypt and Lebanon. The three treaties covered by the (No. 3) Order deal with agreements reached by the ECSC with the three Maghreb countries—that is, the Maghreb countries as distinct from the Mashraq countries, the Maghreb countries to which we refer being, of course, Tunisia, Morocco and Algeria.

In view of the subject matter of the agreements, it might be thought that they could encourage the countries concerned to develop their steel industries more rapidly than they might have done without the agreements. While this is a possibility, we have to bear in mind that part of the purpose of these agreements is to encourage economic development in the countries concerned. Having said that, we should not lose sight of the fact that total steel production in the Maghreb and Mashraq countries is small. Also, these countries will be well aware of the world steel situation, and this is likely to discourage them from taking the financial risks involved in vastly increasing steel capacity at this time. From what we know of the forward plans of the Maghreb and Mashraq countries up to the mid-1980s, there appears to be little cause for concern on this score. Our bilateral trade in ECSC products is currently at a very low level, and the balances in all cases are in our favour. In any case, there are, of course, safeguard provisions in the agreements, which I am satisfied and I am sure the House will also be satisfied—are adequate to cover the relatively slight risk of disruption of trade. My Lords, I beg to move.

Moved, That the draft European Communities (Definition of Treaties) Order 1978, laid before the House on 20th March, be approved.

That the draft European Communities (Definition of Treaties) (No. 2) Order 1978, laid before the House on 20th March, be approved.

That the draft European Communities (Definition of Treaties) (No. 3) Order1978, laid before the House on 20th March, be approved.—(Lord Goronwy-Roberts.)

7.38 p.m.

Baroness ELLES

My Lords, I should like to take this opportunity to thank the noble Lord, Lord Goronwy-Roberts, for moving these draft orders and for giving a very full and ample description of their content and purpose—if I may say so, a complete complement to the Explanatory Memorandum which we have already had at our disposal, and for which I am personally extremely grateful. It is, of course, relevant to say in relation to these co-operation agreements, and agreements, that we are now dealing with an area of the world where the EEC in fact has its main trading partner. The Arab League has now reached that stage, and I think this is very largely due to the "global approach", as it is called, that the European Communities have been pursuing since 1972, fully supported in this area, I am thankful to say, by both Governments, the Conservative Government followed by the present Government. I think they have made a very large contribution to the benefits of the people of those areas.

I am not going to go into great detail over these agreements, and the noble Lord has already touched on them, but I think that we should sometimes be rather pleased with ourselves in the European Community. It is so often knocked about in this country for its supposed internal failures, but this, I think, can be called a success area of the Community policy: that is, in the external policies and the way it has gone out to help such a vast and important area of the world. In this particular case, we are referring, as the noble Lord, Lord Goronwy-Roberts, rightly indicated, to the Mashraq and Maghreb areas of the Arab countries—all of which, as he said, are in deficit to the Community. It is in no way a way of considering we are enriching ourselves at the expense of rich Arab countries; it is quite the reverse. These agreements go towards helping those particular areas of the Arab League which are in deficit.

Here again, I think it should be said that, when so much is said by the developing countries at the UN and in other international fora about the North/South dialogue and the new international economic order, this, to me, is the new international economic order. The West is actually contributing to the social and economic development of these people—and in a very concrete way. This is the result of the North/South dialogue. I think we should sometimes say this with more force than we do.

After all, one aspect of this is that, under these arrangements, financial assistance is going to be given to these countries over the next three years until 1980, to the tune of 630 million units of account. That is no small figure coming from the European Community to an area supposedly so rich in oil and where parts of that area are investing heavily in the West. Sometimes we should remember what we are doing for other countries as well as being knocked for so many other things that in the eyes of the world we apparently seem to be failing to do. This, I believe, is a success story.

I think that there are some things that we have to be careful about, particularly in relation to agricultural products. I should be loth to see free imports of agricultural products which are already being produced by the Southern part of the Community and might affect farming and the lives and financial success of farmers on the Northern shores of the Mediterranean within the European Community. This will have to be watched so that they are in no way harmed by these agricultural imports.

I think that we should be aware also of the enormous increase in trade which we now have with these countries. One figure which came to light in some of the documents I have read is that in 19651967 exports were worth in the region of 3,000 MUA and by 1973-1975 they were worth 11,000 MUA. I give this figure merely to indicate the interchange of financial, technical and other assistance being developed between these two very important areas of the world—and in particular, I would say, that, in a way, the West can help this part of the world to develop its economic and social wealth in order to contribute to the maintenance of peace in what is a crucial and delicate area in international affairs.

There is one other thing which I think is also relevant. It is not only financial and commercial dealings that we are having with these countries. In the West, and in the Community, there are over 800,000 migrant workers from these countries; their rights are protected under these agreements and in connection with them and as a result of them. For instance, there is in Article 43 one of these cooperation agreements between the EEC and the Lebanese Republic under which their nationals are protected within the arrangements made by these agreements. This is a valuable contribition to better understanding between races of different parts of the world.

I shall not keep your Lordships much longer. I am grateful to the noble Lord for having introduced these orders and I should like, on this side of the House, to recommend that we approve them.


My Lords, I should like briefly to join with the noble Baroness in thanking the noble Lord, Lord GoronwyRoberts, for his thorough explanation of these orders. I should like to welcome the extension of what he described as the overall Mediterranean policy by means of these treaties. I was interested in what the noble Lord said about the application of the Lome philosophy to the Mediterranean countries; and the fact that no reciprocal tariffs are insisted upon is an aspect of that philosophy. I very much appreciate what he has said about the even-handed approach of the Community as far as the Arab countries and Israel are concerned.

Finally, I should like to say that I think it very important to strengthen the overall Mediterranean policy at the present time because it may be under some degree of pressure once we proceed to enlargement of the Community, bringing Mediterranean-type countries within the Community. For these reasons, I welcome these orders and hope that the House will support them.

7.46 p.m.


My Lords, may I briefly express my apprecia tion of both contributions to which I think the House has listened with the greatest of pleasure. No questions have been asked of me. I think that is a tribute to the inter-Party way in which we all worked over the need to improve the provision of information in respect of orders like this, which can be very complicated, legally and economically.

I should like to express my appreciation of the contribution made from the Bench opposite and from the Liberal Benches in making it possible for this information to be made available more fully, more precisely and more understandably in its present form. The Explanatory Memoranda, I think, must rank as papers of great capacity and clarity; and I was delighted to hear the noble Baroness refer to them.

As she said, this constitutes a major achievement by the Community. What she said was echoed by the noble Lord, Lord Banks, when he reminded us of the nature of the EEC which is, after all, not so much expansionist as outward-looking. There is a difference. There is nothing imperialist about the Community; it is increasingly universalist, which is a different thing to be. Those of us who spent rather reluctant periods of their very early lives in reading the classics—reluctantly, but with later profit—will recall that the Romans—great pioneers in civilisation and government, and in many ways, in economic planning—always regarded the Maghreb and Mashraq countries as part of Europe for these practical purposes; and I sometimes think that as many inspiring remnants of Roman civilisation are to be found in North Africa as in Southern Europe.

The noble Baroness referred to the balance of trade between the four Mashraq countries, which is favourable to this country; so there is no need to be worried about the concessions we are making to them on tariffs. I see that the figures are £106 million sterling in our favour in regard to Egypt—who is our major trading partner; £54 million sterling with Jordan; £4 million sterling with the Lebanon—and there are circumstantial reasons of recent origin for that comparatively low figure—and £56 million sterling in our favour in our trade with Syria.

We must not expect that these substantial balances will always be of this order. This country has always looked to an ultimate balance over a number of years; otherwise, there can be no steady and mutally beneficial world trade—an impeccable Liberal sentiment with which I am sure the noble Lord will agree.

At the moment that is the positon. Therefore, any of the concessions, which the noble Lord. Lord Banks, quite rightly said ought to be made, are safely made. In any case, there are safeguards for any of the members of the contractual community. If they, or some of their industries, find themselves in serious danger, there are provisions for putting the matter right. There is a good deal of talk about protectionism these days. If protectionism is inevitable or necessary, this is the best way to do it: by paradoxically but effectively uniting the principle of freer trade, especially with people less well off than we are, with a judicious provision within that arrangement for a possible adjustment if and when that is necessary.

On Question, Motions agreed to.


My Lords, I beg to move that the House do now adjourn during pleasure until 8.15 p.m.

Moved accordingly, and, on Question, Motion agreed to.

[Sitting suspended from 7.51 p.m. until 8.15 p.m.]

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