HL Deb 24 November 1982 vol 436 cc906-12

3.53 p.m.

The Minister of State, Foreign and Commonwealth Office (Lord Belstead)

My Lords, with the leave of the House, I shall now repeat a Statement being made in another place by my right honourable friend the Secretary of State for Foreign and Commonwealth Affairs. The Statement is as follows:

"With permission, Mr. Speaker, I will make a statement on the Foreign Affairs Council held in Brussels on the 22nd and 23rd November. The Council dealt with a heavy agenda and reached agreement on a number of issues.

"The Council had a first exchange of views on the Commission's paper on the budget solution for 1983 and later. It was agreed that the Committee of Permanent Representatives should get to work on this immediately and report back to the Council at its January meeting.

"We discussed East-West trade issues and agreed that we should carry forward the studies approved in the recent Washington talks. Our objective is to improve our co-operation in this field and to achieve a greater cohesion in our approach to East-West trade.

"The Council also discussed developments in the final preparations for the GATT Ministerial meeting. The Community will continue to press for improvements in certain areas and the Council will meet again in Geneva if necessary. My honourable friend the Minister for Trade, who was present at the Council, is now in Geneva for the GATT Meeting.

"The Council agreed in principle on the details of the Community's Generalised Scheme of Preferences for 1983. Ministers noted the progress made in the past month in the bilateral textile negotiations under the Multi-Fibre Agreement with the ASEAN countries and Brazil. The Council also agreed that the Commission should proceed with negotiations with the three dominant suppliers (Hong Kong, South Korea and Macao) making full use as necessary of the flexibility available to them within the global ceilings.

"Ministers discussed the Community's external steel régime for 1983. They agreed that the Commission should open negotiations on Voluntary Restraint Arrangements (VRAs) with main third country suppliers of steel to the Community, on the basis of a cutback of 12½ per cent. in import volume in relation to the 1980 base year.

"We raised the problem of the trading imbalance under the European Community/Spain Agreement and asked for a Commission report with proposals for action on Spanish implementation of the Agreement, and on the unequal and unjustifiable tariff imbalance in certain sensitive areas.

"Ministers agreed a special aid programme for Central America. They approved a new management regulation designed to improve the procedures governing the Community's Food Aid Programme. Discussions will continue on other subjects, including the Community's research programme on nuclear safety, the European Parliament's proposals for a uniform electoral system, and a Commission memorandum on the follow-up to the second Lomé Convention.

"A Ministerial conference with the Portugese in the margins of the Council reviewed progress in the accession negotiations.

"Ministers also met in the framework of political co-operation and discussed a number of foreign policy issues, including East-West relations and the Middle East. It was agreed that the Danish Foreign Minister should visit Israel shortly in order to put the Ten's views on the current situation. As applicant members of the Community the Spanish and Portuguese Foreign Ministers were present for part of the meeting."

My Lords, that concludes the Statement by my right honourable friend.

Lord Cledwyn of Penrhos

My Lords, we are grateful to the noble Lord for repeating the Statement. It is clear that the Foreign Secretaries covered a great deal of territory although they did not come to any firm conclusions at this stage. May I put a few short questions to the noble Lord? First, on the question of EEC steel policy and the proposed cutback of 12½ per cent., could the noble Lord say whether this is uniform throughout the Community? In view of the fact that the British steel industry has been truncated and has lost far more jobs than the industry in any other EEC countries, are we not entitled to ask for a smaller cutback than the average for the Community as a whole?

On the question of the EEC budget referred to in the Statement and the prospect of negotiating a very desirable longer-term arrangement, is it proposed that this, in addition to the action which is described in the Statement, should go to Copenhagen where the Prime Minister herself will be able to raise the matter? We on this side of the House warmly welcome the attention paid to the food aid programme and to Lomé III and to the help to the three Central American countries. Can the Minister indicate what the improved procedures are which are referred to in the Statement? As the Minister is well aware, there is great interest in the multi-fibre arrangement in this country. Could he tell us whether any further talks on this subject are in prospect so that the matter can be brought to a satisfactory solution?

We are glad that the imbalance between the EEC and Spain is being studied carefully. Will he agree that this has a special significance for us and particularly for our motor car industry, where the tariff disparity is grossly inequitable to our industry? On the Middle East, could he say more specifically what is the object of the Danish President's visit to Israel at the present time?

Lord Gladwyn

My Lords, we, too, should like to thank the Minister for repeating the Statement, and in many respects we welcome the result of the Foreign Ministers' Conference. Notably, I think, we would welcome the fact that the budget solution is being actively studied. Here I would merely repeat what I said the other day; namely, that we do not think that we ought to go out for 100 per cent. satisfaction of our claims but we ought in the long run to consider some reasonable compromise on the budget.

We welcome the idea that there will be greater cohesion in the approach to East-West trade and we welcome the suggestion that there is going to be some reform of the food aid programme. Here, I think that the Minister would undoubtedly want to consult the report which the EEC Committee published last year on this point, in which we said that progress was necessary on this particular matter. On the other hand, on the whole question of GATT the Statement seems to be remarkably bland, if I may say so. It says: The Community will continue to press for improvements in certain areas". It notes the progress made in regard to the Multi-Fibre Arrangement but it does not say what it is. It talks about making full use if necessary of the flexibility available within global ceilings in respect of the three dominant suppliers, Hong Kong, South Korea and Macao, without saying whether there will be any difficulty about that. As the noble Lord, Lord Cledwyn, has said, it makes a reference to the voluntary state arrangements without answering the questions which the noble Lord has put.

When one thinks that lately in the informed press there have been grave apprehensions about a failure in Geneva on GATT with a possible breakdown apparently of the entire world trading, may I ask whether the Minister is able to say if he shares in any way the apprehensions made by these important critics about the grave dangers of collapse of the whole system in Geneva which this Statement seems to gloss over to a large extent? Does he share those views or not?

I note that the European Parliament is going to study the proposals for a uniform electoral system, and here I beg the Government to consider the possibility that it would be disastrous if the proposals of the European Parliament are not accepted. Is the noble Lord able to say what chances there are that the Government will look favourably on them when it comes to the final solution?

I note that the Danish Foreign Minister is going to put forward the Ten's views on the Middle East. Presumably they have a common policy and a common view. How far does this policy and common view coincide with the American view which was put forward by President Reagan the other day, or is there any substantial difference between the two approaches?

4.2 p.m.

Lord Belstead

My Lords, I am grateful to the noble Lords, Lord Cledwyn and Lord Gladwyn, for the questions they have asked. As the noble Lord, Lord Cledwyn, said, it was quite a considerable agenda. I will endeavour to answer the questions both as satisfactorily and as briefly as possible. The first question from the noble Lord, Lord Cledwyn, was: Will the budget problem be discussed in Copenhagen? The answer to that is, yes. The intention is that the presidency of the Community will raise this issue in Copenhagen at the European Council and will report agreement by the Foreign Ministers in the Council on which I have just read my right honourable friend's Statement about the handling of the recent paper by the Commission on the solution for 1983 and later.

The noble Lord also asked me about the Multi-Fibre Arrangement. The situation there is that substantial cut-backs in the clothing quotas of the dominant suppliers will be necessary to remain within the global ceilings. My right honourable friend the Minister of Trade has emphasised, however, that we believe that the European Community should recognise that Hong Kong is the only dominant supplier to offer a completely open market to European Community exporters. But within that general parameter nonetheless there are the global ceilings, and it is within those that the European Community is continuing to negotiate.

The noble Lord asked me a question about steel. Perhaps I did not make myself clear. The figure of 12½ per cent. which is quoted in my right honourable friend's Statement is the cutback of the volume of imports coming from outside the Community into the Community as a whole. Therefore, it is a 12½ per cent. cutback for each country which is exporting into the European Community.

The point which the noble Lord was putting to me was about the desirability of controlling capacity of production within the Community, a most important matter which has been the subject of newspaper articles recently. On that, I would say to the noble Lord that it is true that the United Kingdom has borne the brunt of capacity and manpower cuts. Let us be fair, however. We made those cuts because we had to do so and it was not done as a favour to the rest of the Community. We are now pressing our partners to do their fair share so that the benefits of the sacrifices already made are not squandered, and we intend to take a very firm stand on this issue. That really was the point which the noble Lord was putting to me.

The noble Lord asked me about improved procedures, which are referred to in the Statement, so far as the regulation of the food aid programme of the Community is concerned. This relates to trying to shift the basis and administration of food aid from dumping surplus production and instead trying to encourage agricultural development in the countries concerned. My honourable friend the Minister, Mr. Neil Marten, said some words about this in another place on 15th June. This really is another step in that particular story in a direction which I must say the Government believe is desirable.

Both noble Lords asked me about the reference made in my right honourable friend's Statement to Spain. The fact of the matter is that the Government feel that certain Spanish domestic taxes—and indeed some administrative practices, including for example fiscal discrimination against tobacco imports—are incompatible with the 1970 agreement. On the other hand, Spanish tariffs are unjustifiably high in relation to Spanish export competitiveness; for example, in areas such as—and I think the noble Lord, Lord Gladwyn, asked me this—automotive products, footwear and steel. It is these things which we are trying to get put right. That is why the Statement refers to Britain raising the problem of the trading imbalance under the European Community/Spain agreement and asking for a Commission report with proposals for action.

Both noble Lords asked about the Middle East. The aim of Mr. Ellermann-Jensen's visit to Israel representing the presidency of the European Community is to manifest to both sides of the dispute European willingness to contribute to the achievement of a peaceful solution. While there, I understand that Mr. Ellermann-Jensen will also express continuing European concern about Israeli policies in the occupied territories. The European view is that settlements are both illegal and an obstacle to peace. If I may answer Lord Gladwyn's specific point, we strongly support President Reagan's call for a settlement freeze.

The noble Lord, Lord Gladwyn, asked about the GATT discussions, which of course are going on at this moment. I understand the criticisms of the noble Lord about the very considerable difficulties which are attending these most important talks at the present time. The situation is that the Commission are in what amounts to negotiation on the basis of guidelines adopted by the Council. I am sure that your Lordships will understand when I say that I do not think that the position of the Community is in any way more difficult at this rather sensitive moment; but it is well known that the European Community concerns include the language of the political declaration, the whole subject of agriculture, the subject of services, the difficult but very important subject of safeguard action, disputes on settlements and the question of the trade of developing countries, among other problems.

I hope that that gives the noble Lord, Lord Gladwyn, an indication of where I think the particularly sensitive points lie in this difficult area. Finally, the noble Lord, Lord Gladwyn, asked about the unified electoral arrangements. The latest position on this is that the Council of Ministers had a brief discussion on proposals regarding the common electoral system and will consider them again in December. A number of difficult questions remain to be resolved and it is clear that final agreement will not be easily or quickly reached.

Lord Brockway

My Lords, the Minister's Statement covered an extraordinarily wide ground: East-West trade, the Middle East, the Far East and Hong Kong; relations with the USA, Central Africa and the GATT. It had only five words dealing with the most serious economic problem in the world. That was a reference to the fact that there is to be consideration of the Lomé Agreement. Is it not the case that in the third world 30 million people are dying every year from hunger and the absence of medical attention and should not the meeting of Ministers have given first attention to the most serious problem of death in the world?

Lord Belstead

My Lords, I am not sure that the noble Lord is being quite as characteristically fair as he normally is. I say that because agreement was recorded on a special aid programme for Central America, which is in fact Costa Rica, Honduras and the Dominican Republic. That is new. Then there was a new management regulation designed to improve the procedures governing the Community's Food Aid Programme, about which the noble Lord, Lord Cledwyn, asked me. Then there was the reference to the Lomé Convention. So that there shall be no misunderstanding, I should say that we are of course talking about Lomé III, which will not come into effect until 1985. This really is a reference to the preliminary run-up work to see that the Community is ready to get Lomé III into position three years from now, when Lomé II comes to an end.

Lord Oram

My Lords, further to that question on the Lomé Convention, will the Government, in making their contribution to these preparations, bear in mind that there is a report of the Select Committee on the European Communities of this House dealing with this question? It includes the view that the provisions of the Lomé Convention should be extended beyond their present ACP coverage, and in particular to include the Indian sub-continent. Will the Minister give the House the assurance that that view will be taken fully into account by the Government in considering the contribution they will make to the preparations for Lomé III?

Lord Belstead

My Lords, I cannot give an undertaking that either Her Majesty's Government or the Community will agree with the point of view expressed in the report, but the report, of course, is valuable and important, and I certainly give the undertaking for which the noble Lord asks.

Lord Soames

My Lords, in the Statement, I noticed the phrase: will continue to press for improvements in certain areas". That phrase refers to the General Agreement on Tariffs and Trade. It seems to me that the phrase could cover a multitude of sins, and I should like to ask my noble friend whether Her Majesty's Government will continue to press for the continuation of the principles of the GATT. Is he aware that, if we do not do that and if we yield and try to take different types of action in regard to various countries which have been mentioned from time to time by the noble Lord, Lord Cockfield, though we could perhaps get some tactical gain, if we move towards protectionism we shall lose out badly in the long run?

Lord Belstead

My Lords, I will not repeat in answer to my noble friend what I said to the noble Lord, Lord Gladwyn, regarding the particularly sensitive areas which are under close discussion at the moment in which at the moment there is no solution. But I would say to my noble friend that any meeting of this sort must ultimately reflect a balance of varied views. We attach great importance to the success of the meeting as a contribution to the maintenance of the open trading system. That must be our primary objective.