EC-US Procurement Practices: Reciprocity (Hansard, 24 May 1993)

§ The Parliamentary Under-Secretary of State, Department of Trade and Industry (Baroness Denton)
My Lords, the agreement reached between the European Community and the United States is an excellent one. Both sides have agreed to liberalise their procurement practices for all central government purchases and for the electrical sector; and, at the sub-federal level, the US administration is to make all efforts to remove "Buy America". It will open up major new opportunities for British suppliers in many areas of the United States public procurement market. Unfortunately, the dispute in the telecommunications sector remains unresolved and I regret that there is still a risk of limited US sanctions as a result.

Lord Campbell of Croy
My Lords, I am grateful to my noble friend for that welcome reply. While it appears that there has been a significant reduction by the United States in its barriers against tenders from the EC—and much of the credit for that should go to Sir Leon Brittan—is there now a prospect of negotiations in the foreseeable future for further reducing the barriers which still remain on both sides of the Atlantic?

§ Baroness Denton of Wakefield
My Lords, my noble friend Lord Campbell of Croy is right to congratulate the right honourable Sir Leon Brittan on the significant rolling back of measures. We can hope that is the start of some significant change; but, in itself, it is a major step forward.

§ Lord Barnett
My Lords, does the Minister's excellent answer mean that Members of your Lordships' House will also have access to those contracts?

A noble Lord
She is mystified.

§ Baroness Denton of Wakefield
Yes, my Lords; I am rather mystified. But I suspect that the answer is yes.

§ Lord Peston
My Lords, I shall not pursue that theme. What the Minister said is good news. But reciprocity means equal treatment from both sides. I understand the point the Minister made about central 10 government. However, am I not right in thinking that it is still true that at the level of the individual states, where a great deal of public expenditure takes place in the US, there is not much reciprocity? Further, if there is to be a next phase, as pointed out by the noble Lord, Lord Campbell of Croy, surely something must be done about what happens at the level of the individual states. Can the Minister give us any information as to what progress is being made? Their tendency to buy American—and, indeed, to buy in the narrower sense —has been known for a great many years as being not unconnected with a degree of corruption.

§ Baroness Denton of Wakefield
My Lords, the noble Lord, Lord Peston, would not expect me to comment on American practice in the detail that he just outlined. However, part of the discussions between the United States trade representative, Mr. Kantor, and the right honourable Sir Leon Brittan covered the fact that the United States is to make efforts to eliminate "Buy America" at sub-federal level. I utterly agree with the noble Lord that that is crucial.

§ Lord Stoddart of Swindon
My Lords, in so far as British Rail's franchising may well be a public service contract (a public procurement contract), will it be possible for the United States to tender for a railway franchise—as indeed the nationalised French railways and the nationalised German railways may do —when BR itself will not be able to tender for such a franchise? If so, will the Minister please explain the position?

§ Baroness Denton of Wakefield
My Lords, I shall contain my answer to that part of the noble Lord's question which reflects the Question on the Order Paper. On that basis, I am delighted to tell the noble Lord, Lord Stoddart, that UK industry has everything to gain from an agreement that opens up procurement. It is for the benefit of the taxpayer that such matters are available.

Lord Bruce of Donington
My Lords, the Minister has already indicated that she cannot comment on the arrangements that apply within the United States of America. Will she therefore give the House an assurance that those liberalisations of public procurement contracts do apply at present within Europe?

§ Baroness Denton of Wakefield
My Lords, I am pleased to tell the noble Lord, Lord Bruce Donington, that Article 29 of the Utilities Directive was seen as a useful negotiating tool—and indeed it has proved to be so. Part of the agreement between the right honourable Sir Leon Brittan and Mr. Kantor was that both sides are to sponsor an independent study into their respective procurement opportunities. With that information, we shall undoubtedly be able to make more progress.

§ Lord Monkswell
My Lords, bearing in mind the Government's replies to the questions so far, I believe it is right to say that they have been about the relationship between the European Community and the United States. Can the Minister advise us what contacts have been made between the United 11 Kingdom Government and the individual states of the United States to ensure reciprocity in terms of realistic trade relationships?

§ Baroness Denton of Wakefield
My Lords, as the noble Lord well knows, the question of negotiation is a matter for the Commission. However, I believe that I have some evidence which indicates that there is constant contact with various areas of the states. I am delighted to tell the House that in the first quarter of 1983, in comparison to 1982, our exports to that country increased by 27.9 per cent.