GATT: Uruguay Round (Hansard, 5 December 1990)

§ The Minister of State, Department of Trade and Industry (Lord Hesketh)
My Lords, my right honourable friend the Secretary of State for Trade and Industry is this week leading the United Kingdom delegation to the ministerial meeting in Brussels called to conclude the Uruguay round of trade negotiations. Working with our Community partners he will certainly be making every effort to encourage participants to take the difficult decisions needed to ensure success and so strengthen the multilateral trading system.

§ Lord Jay
My Lords, since the extreme agricultural protectionism of the EC is as damaging to this country as it is to world trade, will the Government now make a maximum effort to ensure that more adequate and convincing concessions are made by the EC before it is too late?

§ Lord Hesketh
My Lords, I am sure that the noble Lord will not expect me to negotiate from the Dispatch Box. However, it is perfectly true that without an agreement on agriculture the round will not succeed. The EC must be prepared to move further if necessary to secure an agreement in the final negotiations.

§ Lord Boyd-Carpenter
My Lords, is it not an acid test of the economic management of the Community that in the interests of a successful Uruguay round it should be prepared to curb the excessive protectionism in particular of France and Germany?

§ Lord Hesketh
My Lords, I hope that my previous answer in part answered my noble friend. However, it is also worth reminding your Lordships' House that the proposed United States demands for a 75 per cent. reduction do not include deficiency payments, which form a substantial part of its funding for its agriculture.

§ Lord Hatch of Lusby
My Lords, does the noble Lord agree that the wrangling over the GATT talks at present exposes the hypocrisy of claiming that there is any such factor as a free market in world trade? Does he recognise that the subsidies which are being given to farmers in Europe and North America are causing starvation and poverty throughout the third world?

§ Lord Hesketh
My Lords, it is always a pleasure to have the noble Lord, Lord Hatch, placing his finger on 176 the pulse of the problem and confirming that which I knew to be true: that the free market is the key to removing the iniquities that exist in our world.

§ Lord Harmar-Nicholls
My Lords, does one risk being dubbed non-communautaire if one states that the failure of the GATT talks would be more damaging to the world than the disintegration of the Delors proposals arising from the Treaty of Rome?

§ Lord Hesketh
My Lords, I am sure that, if the noble Lord were to put down a Question on his second point, I or another Minister would be more than happy to answer it.

Lord Bruce of Donington
My Lords, is the noble Lord aware that the common agricultural policy lies at the root of the problem with regard to Europe? Is he aware that, according to the recent draft budget published by the Community, agricultural expenditure is due to increase by £2.496 billion and that the consequent net burden on the United Kingdom will be an additional £300 million over and above the £2.2 billion already in the Government's expenditure plans? Will he take steps through the Council of Ministers to terminate this ramshackle common agricultural policy?

§ Lord Hesketh
My Lords, it is important to remember that the common agricultural policy is not only a name but that it involves people. If there were further reduction in expenditure on direct aid to food production, the Commission would be committed to increase expenditure with regard to the social dimension. That is particularly true with matters that are environmental or production neutral.
The negotiations are extremely difficult. They go far beyond agriculture. There are problems over services and intellectual property. It is important to remember that a record number of 107 countries, with 5,000 delegates representing those 107, are involved in a very difficult and complex round of which the CAP is only a part.

§ Lord Boardman
My Lords, does my noble friend agree that, whatever the iniquities of the CAP, it would be unreasonable to expect the British farmer—I stress "British" farmer—to make further sacrifices when operating in an already extremely depressed industry?

§ Lord Hesketh
My Lords, as I pointed out in my previous answer, in order to provide protection on the point that my noble friend makes, the Commission is committed to increases in expenditure even though there is also a commitment to reduce production.

§ Baroness Seear
My Lords, will the Minister accept that we on these Benches, who have always been the greatest supporters of the Community, have never supported a fortress Europe approach? In these negotiations there are signs of the emergence of fortress Europe, which we greatly deplore. Will the Minister agree that if we cannot achieve our desired settlement some kind of settlement in the Uruguay round is better than total failure?

§ Lord Hesketh
My Lords, I am sure that on all sides of your Lordships' House there is a desire that we should not have total failure because the consequences 177 would be extremely grim. The situation in Brussels is fluid and, as I said earlier, I am sure that the noble Baroness would not expect me to enter into negotiations from the Dispatch Box.

§ Lord Rees
My Lords, will my noble friend confirm that agriculture has played a predominant part in the present and the two previous GATT rounds? Will he also confirm that there is at least a suspicion that it is used to distract attention from other areas where protectionism is rife and that other countries are advancing claims against the European Community?

§ Lord Hesketh
My Lords, my noble friend is entirely correct. It is fair to say that agriculture has provided a smokescreen over the various other sectors to which I referred earlier. They have not been as extensively aired in the press in this country but they are equally important.

§ Lord John-Mackie
My Lords, in reply to the noble Lord, Lord Hatch of Lusby, did the Minister say that the free market is the solution to the food situation? If so, I refer him back to the 1926–34 period during which we had a free market in food. If he would care to consult people about what happened, particularly his noble friend Lady Elliot, he would form different ideas about a free market in food.

§ Lord Hesketh
My Lords, I was referring to the principle. The noble Lord, Lord Hatch, suggested that this example showed that the free market satisfied nothing. I believe that in asking the question he answered it: that the free market was the route to salvation in the overall picture of the GATT negotiations.

Lord Morris
My Lords, to what extent and for how long have the United States Government been protecting and subsidising their farming interests?

§ Lord Hesketh
My Lords, that is another question which I shall be more than happy to answer if my noble friend tables it.

§ Lord Williams of Elvel
My Lords, will the Minister convey to his right honourable friend who is conducting the negotiations the virtually unanimous desire in this House for success? Furthermore, will he indicate that the Prime Minister is taking an interest? Has the Prime Minister been in touch with Chancellor Kohl and President Mitterrand in order to obtain some relaxation in the present Community position on agriculture?

§ Lord Hesketh
My Lords, I assure the noble Lord that I shall convey his message to my right honourable friend. The Prime Minister is constantly in touch with other leaders within the Community but I cannot say whether he has been in touch this afternoon.

§ Lord Williams of Elvel
My Lords, in view of the meeting between Chancellor Kohl and President Mitterrand should not the Prime Minister be in touch in order to press the point?

§ Lord Hesketh
My Lords, I am sure that the Prime Minister is capable of making such a decision on his own.

§ Lord Jay
My Lords, if all else fails is this not a case, if ever there was one, for the heads of government to get together and not to go away until they have reached a sensible compromise?

§ Lord Hesketh
My Lords, it is important to remember that the negotiations on behalf of the European Community are being conducted by the Commission. The Ministers are behind the Commission and the issues at stake are being discussed. However, we are negotiating as a European Community.