§ 7.30 p.m.
§ Lord Reay rose to move, That the draft order laid before the House on 29th January be approved [12th Report from the Joint Committee].
§ The noble Lord said: My Lords, the Fourth ACP-EEC Convention, or Lomé IV as it is commonly known, governs development and trade relations between the Community and the 69 countries described as the African Caribbean and Pacific (or ACP) group. The convention was signed on 15th December 1989 in Lomé. I had the honour of representing Her Majesty's Government so I am particularly pleased to have the opportunity of commending the order to your Lordships today.
§ The draft Order in Council to which the Motion refers was approved in another place on 26th February. It will allow the convention's provisions to be effected in United Kingdom law, which opens the way for ratification of the convention by the United Kingdom. The convention takes force when ratified by all EC member states and two thirds of the ACP countries and concluded by the Community.
§ Lomé IV builds on the success of its predecessors. The convention's scope is unique, covering a wide range of countries. The ACP countries have populations ranging from fewer than 100,000 to more than 100 million. Of the 43 least developed countries, as defined by the UN, 33 belong to the ACP. The convention is nothing if not ambitious, for it seeks to consolidate the existing partnership between the Community and the ACP states, one which will further the aspirations of these countries. As I am sure your Lordships can imagine, negotiating such a wide-ranging treaty between such a variety of countries was no easy task. The Government put great effort into the process and I am happy to report are delighted with the result.
§ The new convention will last for 10 years. That is twice as long as Lomé III and an indication of our commitment to the partnership. The aid money will be provided by two separate five-year European development funds, or EDFs. There is a 46 per cent. increase in spending in EDF VII (which will run for the first five years of Lomé IV) compared with EDF VI for Lomé III. The Community has pledged 10.8 billion ecu, or £7.56 billion, of which the British share is 1.8 billion ecu (around £1.3 billion).
§ Lomé IV recognises the importance of co-operation in the areas of agriculture, trade and industry. The need for the environment to be preserved is also reflected in the treaty. Education and training, technical co-operation and the role of women in development are all emphasised by the convention. The European Investment Bank, or EIB, will channel funds to efficient private sector activities. Money will also be available for public administration programmes: these are the concrete results of the Government's determination to consider aid in the 1174 context of good human rights practices which is reflected in the convention. The fund will also support structural adjustment programmes, thereby bringing the Community's weight behind the efforts of the international financial institutions and of the bilateral donors. The new convention is aware of the need to provide aid effectively by helping the recipients to further their own interests.
§ The Government believe that developing countries can best progress economically by full participation in the world economy. They, therefore, welcome, the improved trade conditions, which were already generous. I should point out that these conditions are bettered only by those for our dependent territories, which are provided for under a decision parallel to Lomé
§ The Government are confident that the convention is a genuine advance, building on the strengths of previous treaties and learning from their weaknesses. The convention is the Community's development flagship. I beg to move.
§ Moved, That the draft order laid before the House on 29th January be approved [12th Report from the Joint Committee].—(Lord Reay.)
§ Baroness Ewart-Biggs
My Lords, I am grateful to the Minister for presenting the order and for his clear explanation of it. I congratulate him on the personal contribution that he made. I wish to make only a few short comments about Lomé IV and ask a couple of questions.
We remember how Lomé III was negotiated in 1983–84 against a background of food shortages caused by drought, deforestation and neglect of the small farmer. However, the biggest problems now facing ACP countries are the burdens of debt, which by World Bank estimates doubled between 1980 and 1987, and the fall in agricultural income. Therefore, given that burden of debt, we welcome the decision that most Lomé funds will now be given as aid and not as grants. We also welcome the emphasis on the environment, on human rights and most certainly on the commitment to pay greater attention to the needs of women.
The convention refers to the decentralised co-operation which should bring NGOs into the process of development in ACP countries. We are also happy to see that both Stabex and Sysmin have been considerably improved. Can the Minister say what is the total estimated fund allocation within the convention's budget for the emergency aid and refugee aid projects for 1990–1991?
I turn now to the other side of the coin. When looking at the desperate straits of many of the ACP countries one wonders whether the 12 million ecu for the convention is enough. I believe that in financial terms the new agreement gives no more per person than the previous agreement. The ACP states requested 15.5 million ecu for the convention but the Commission imposed its offer, although there had been no room for negotiation. However, the 12 million ecu was certainly better than the UK Government's negotiating proposal, which I understand was only 10 million ecu. Therefore, I am 1175 happy that the other member states prevented the Lomé budget from being as the UK Government wished. Can the Minister give the total funds that are likely to be allocated under Lomé IV in relation to the development of trade and of small businesses in ACP countries? Does he know of any new initiative that the Government are taking to encourage investment within ACP countries?
I wish to comment on the spirit of Lomé in the restructuring of North-South relations, which is an important aspect. The preamble to the first Lomé convention referred to changing the North-South relations that were hampering development. It proposed instead the promotion of a new, more just and balanced world order. The ideal that the huge gaps in wealth and power could be transcended by a new North-South partnership based on mutual respect was the call of the time.
That ideal was conspicuously absent from the Lomé IV negotiations. There have been improvements but no major innovations since Lomé began. As the EC and NGO liaison committee said, the spirit of Lomé seems to be somewhat lost. Lomé IV bans the export of hazardous nuclear waste to EC countries, and we welcome that. But surely a real model of North-South co-operation would include an agreement on the activities of all multi-national organisations in developing countries. It would tackle the whole debt crisis in the international trade regime. Lomé IV does not endeavour to do that in any way.
The Labour Party has always pressed for an improvement in the European Development Fund but there is nothing in the convention that will bring that about. In addition, we have also believed that the ACP countries should be given more opportunities to sell their agricultural produce and manufactured goods within the EC. Again, Lomé IV will not assist them in doing that. Also, we recognise how much developing countries would benefit if EC countries stopped the practice of dumping farm surpluses on the world market at subsidised prices. Yet it is clear that EC farmers will continue to be protected and surpluses will continue to grow.
In view of the many other countries in that area whose economies are in such a very bad way, perhaps I may ask the noble Lord if he knows whether there have been any requests from other countries to join the Lomé Convention. A recent press report suggested that South Africa may wish to join. Perhaps the Minister could say what would be the European Community criteria regarding such a possible request from South Africa.
I welcome Lomé IV and the whole idea of giving assistance to the ACP countries. I hope that the convention will revive the fortunes of some of those countries which are struggling with such serious economic problems.
§ Lord Mayhew
My Lords, my noble friends would wish me to add our satisfaction and congratulations 1176 on the new convention with its numerous improvements over its predecessor. Also, we are happy to congratulate the noble Lord on the personal part which he played in negotiations on the convention.
I have one very small but important procedural point to raise. I do not understand why the order requires the financing agreement to be designated as a Community treaty. Surely we can make our contribution without designating the agreement a Community treaty. Perhaps the noble Lord can clarify that point.
I believe that I have on my side the Foreign Office because I see from a report of the Joint Committee on Statutory Instruments that the Foreign Office stated:It would not be regarded as improper to seek voted money for the purposes of the Treaty payment if the Internal Financing Agreement were not designated. Specific statutory authority for the payment of the United Kingdom contribution to the European Development Fund is contained in section 1 of the Overseas Development and Co-operation Act 1980".I am no great authority on these constitutional and legal points. It may be that my vitamin intake is not sufficient for me to comprehend the meaning of the order. However, at least I have the Foreign and Commonwealth Office on my side. Therefore, I am emboldened to ask the Minister to explain that anomalous situation.
§ 7.45 p.m.
§ Lord Pitt of Hampstead
My Lords, I hope that the Minister will forgive me for not being in my place when he introduced the order. I should like to say a few words this evening on the acceptance of the order.
I was an observer at the original meeting in 1974 at the commencement of the organisation of the arrangements between the EC and the African, Caribbean and Pacific countries. That was merely a preparatory meeting. The noble Baroness, Lady Ewart-Biggs, mentioned the good will and the way in which it was felt that we were moving into something good when the first Lomé Convention was signed. Unfortunately, that has not happened. Many of the countries in the ACP are worse off now than when it started. Therefore, we must look at each Lomé agreement in terms of whether it has forwarded the objectives which we had in mind.
It is true that each Lomé convention is an improvement on its predecessor. So Lomé IV is an improvement on Lomé III. On the other hand, Lomé IV has not improved on Lomé III to the extent it should and not as much as Lomé III improved on Lomé II. Lomé IV agreement was reached in an atmosphere which is very worrying from a trade point of view. The agreement is associated with both aid and trade, and the trade atmosphere is very difficult at this time. It is affected by 1992 and the single European market and also by the new GATT round. Therefore, it is a great pity that the EC could not agree to increase the fund at least to the extent to which the fund for Lomé III was increased over Lomé II. It seems a shame that that was so when a greater increase was required.
1177 I shall explain why. Trade difficulties mean that the need for aid is greater. To demonstrate that, I stick to the area of the world from which I come—the Caribbean. We shall have real problems as regards bananas and sugar. Fortunately, we shall do well on rum. Until now there has not been a good regime on rum; now there is. Because 1992 means an open market, the rum can be sold and we shall benefit if we are sensible and the arrangements function properly.
As regards bananas, the United Kingdom Government need to square a circle. The Lomé agreement states:In respect of its banana exports to the Community markets, no ACP state shall be placed as regards access to its traditional markets and its advantages on those markets in a less favourable situation than in the past or at present".I do not know how one relates that to 1992. It is trying to square a circle.
I know that Her Majesty's Government are doing everything possible to square the circle. I am not trying to criticise HMG. I know that they are doing their best and that it is a very difficult situation. However, the opportunity should have been taken to provide additional aid which would have allowed those territories to try to find and develop another market because of the problems with the banana market.
It may well be possible to develop a market in avocado pears or pineapples in the same way that the banana market developed. It did not just happen. Those territories need to find another market so that they are able to earn the income which they now receive from the sale of bananas. Since that is a problem and Her Majesty's Government are apprised of it and are doing everything to help, it would have been sensible to provide the sort of grant which would have enabled those countries to start finding other markets.
Again there is sugar, which is not limited by what happens in the Lomé agreement. The cane sugar price is related to the price that the EC pays for beet sugar. Therefore the GATT agreement, by reducing the subsidy on beet sugar, could make it necessary to pay a lower price for cane sugar. Although technically sugar is not affected by the Lomé agreement, as a result of GATT it could be. Help to enable the territories that rely on sugar to find another way of meeting their problem would have been useful.
I deeply regret that the amount of the fund is as low as it is. I regret that no opportunity was taken to help the ACP countries with their colossal debt problems. When the Prime Minister was Chancellor of the Exchequer he recommended a method of approach which we all welcomed, and which would help the poorer countries by cancelling their debts. However, many countries are just above that level.
The last time I spoke on this matter, I mentioned Jamaica. It is doubtful that Jamaica, which is in my part of the world, is in the most debt and difficulties; it is doubtful whether Jamaica would benefit from the Major plan. One hoped that the Community would accept the request of the ACP to cancel the debts that the ACP countries owed on special loans. The Community could have done that. It could have 1178 converted some of those special loans into grants. That would have helped those territories with the debt problem, which is one of the biggest difficulties those countries face. There was an opportunity of doing something in that regard and one regrets that that opportunity was not seized.
The Lomé agreement is settled. But Her Majesty's Government, by administering the Major plan in the most understanding way, could go a long way to help those territories with their debt problem. The EC regards the debt issue as one that concerns member states and not the Community. I am sorry about that. It means that HMG could do something in that regard without reference to the other territories. I do not expect the Minister to be able to say that that will happen. I hope that he will say that he will convey to the Secretary of State and perhaps the Prime Minister that the most favourable interpretation of the Major plan will be made and that many territories which are on the border line will be helped by that plan. I hope also that wherever possible those territories will be helped with the structural adjustments they must make in order to cope with the present situation. I cannot ask the Minister for more assurance than that.
§ Lord Reay
My Lords, I am grateful to the noble Baroness and noble Lords, Lord Mayhew and Lord Pitt, all of whom made some kind remarks in regard to the convention. A number of points have been raised to which I should like to reply, and some criticisms which I could perhaps try to answer.
The noble Baroness asked what specific allocations were made within the EDF VII for emergency and refugee aid. I have the figures for the whole five-year period. They are 250 million ecu for emergency aid and 100 million ecu for refugee aid. The noble Baroness asked about aid to small businesses. The European Investment Bank, under Lomé IV, strengthened its role to act as a channel for funding to encourage small enterprises. The Commission is placing emphasis on provisions in national indicative programmes to encourage private sector operations.
The noble Baroness raised the matter of the dumping of European Community agricultural products. The United Kingdom is leading a call for reform of the CAP. We believe that the solution to unfair EC exports to third world countries is not so much to commit more aid but to tackle the root of the problem; namely, the unfair competition by the European Community. That is something we are attempting to do through the pursuit of the matter in the GATT round.
The noble Baroness asked if there had been further applications to join Lomé. There are no outstanding applications at the present time. Haiti and the Dominican Republic joined with Lomé IV and Namibia subsequently joined when it became independent, its accession having been agreed in principle during the Lomé IV negotiations. Since then there have been no developments.
It is possible that an application could be received from South Africa. There is no such application at the moment. The Community's relations with a nonracial democratic South Africa will be developed. The Community will want to find the appropriate means to 1179 support a pluralistic democracy in that country. Any request by South Africa for Lomé membership requires EC support before being given serious consideration. Its economy however is in many ways so different from that of most other ACP countries that another form of relationship with the Community may be more appropriate.
The noble Baroness raised the problem of debt, as did the noble Lord, Lord Pitt. It is a matter of concern which we share. The United Kingdom has taken a number of steps to help the poorest countries which are pursuing economic reforms; most recently the Trinidad and Toronto proposals to which the noble Lord, Lord Pitt, referred. When my right honourable friend the Prime Minister was Chancellor of the Exchequer he put forward the framework for forgiving debt of the poorest countries which are undergoing economic reform through programmes agreed with the IMF and the World Bank. Debt is a matter for member states rather than the Community. It is they, not the European Community, which are the creditors. Therefore Lomé does not address debt in the wider sense.
The noble Baroness was critical of the aid volume. Nevertheless it is a substantial amount. As I pointed out, it is 45 per cent. larger than the previous EDF. It is the largest ever single aid commitment made by the United Kingdom. It is not just aid; it has been calculated that four-fifths of the value of the convention lies in the trade provisions, which are remarkable for the fact that free access is given for all manufactured products.
The noble Baroness said that there had been no innovations in the convention. With respect, that is not so. We are continually building on what is already a comprehensive relationship. Lomé IV places new emphasis on the environment and human rights in particular. It is not a convention that has been allowed to remain in its old form; it has been added to in a substantial and meaningful manner.
The noble Baroness referred to multi-nationals. In our pursuit of the liberalisation of international trade we think that it will be inappropriate to legislate on the actions of multi-nationals. The noble Lord, Lord Mayhew, asked me a recondite question. We agree with the Statutory Instruments Joint Committee that the specification is not legally essential. However, doing so accords with the practice followed for the previous three Lomé Conventions. Politically we believe that it is an appropriate means of bringing the agreement before Parliament in the context of the debate on the whole series of instruments relating to the Lomé Convention. That financial commitment arising from our obligations under the convention will this year consume 9 per cent. of the United Kingdom's total budget.
The noble Lord, Lord Pitt, raised the matter of bananas. In the Lomé negotiations the United Kingdom fought hard to ensure that the new banana protocol committed the Community to maintaining preferential access arrangements for traditional suppliers in the Commonwealth Caribbean. We await proposals from the Commission for the arrangements to apply to bananas in the single market after 1992.
1180 We shall stand by these commitments as well as taking account of consumer interests, trade policy considerations and the competition and efficiency objectives of the single market. Those are the only points to which I have to reply. If there is anything further which I have omitted I shall write to the noble Lords concerned.
On Question, Motion agreed to.