Investment Protection Promotion Agreements (Hansard, 27 June 1994)

§ The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey)
My Lords, last year we made proposals for Investment Promotion and Protection Agreements to the Governments of Cuba and the Dominican Republic. Negotiations have since advanced with the Cuban Government who are seeking amendments to key points of substance in the draft text. We have sent further proposals to resolve outstanding issues and await their response. We continue to press the Dominican Republic Government to study our proposed text and to let us have a considered response.

§ Baroness Young
My Lords, I thank my noble friend for that reply. Is she aware of the importance which business people attach to these forms of agreements, particularly when they are proposing, or hoping, to export to a country? Can she say, when the time comes for her honourable friend in another place, Mr. Patrick McLoughlin, to visit Cuba in the autumn, whether or not we will be in a position to sign the IPPA between ourselves and Cuba, which would be a great encouragement to exporters and others generally?

§ Baroness Chalker of Wallasey
My Lords, I certainly realise how important these bilateral agree-ments are because they encourage long-term investor confidence by setting high standards of investor protection. It is notable that since 1975, 66 such IPPAs have been signed and indeed in the first five months of this year eight have been signed. Therefore, we give full weight to business interests as regards having such agreements. As regards the visit of my honourable friend Mr. McLoughlin to Cuba in the autumn, we very much hope that we shall have had a satisfactory conclusion to our discussions with the Cuban Government by that time which will enable him to sign, but the ball is at the moment in the Cuban court.

§ Viscount Waverley
My Lords, is the Minister aware that Italy, France and Spain have signed IPPAs thereby giving their business communities an advantage over ours? The Minister must surely be concerned by this.

§ Baroness Chalker of Wallasey
My Lords, we are indeed anxious to sign an investment agreement with 522 the Government of Cuba and with the Government of the Dominican Republic, and with a number of other countries too, but the very fact that some countries will settle for less investor protection than we believe is right for British business does not mean we should proceed in haste and regret it at leisure.

§ Lord Molloy
My Lords, bearing in mind that the UK is the second largest investor in the world and the fact that the Government have a good record on IPPAs, would it not be possible to increase that number and keep up that good record by paying attention to South-East Asia and, of course, the countries that were at one time under the heel of the Soviet Union?

§ Baroness Chalker of Wallasey
My Lords, we have indeed paid attention to every country that is prepared to have a satisfactory agreement on investor protection but what I would not wish us to do is to sign up for half-baked agreements which do not protect British business interests, because that way the investments would not give us the sort of returns that those under the IPPAs have done.

§ Baroness Blackstone
My Lords, while I agree with the Minister that undue haste in these matters would be undesirable, will she explain to the House why it is that our European neighbours have been able to conclude their negotiations for IPPAs in advance of us? Will she also say what interim support is being given to British businessmen in the light of the delay in the signing of an IPPA agreement with Cuba?

§ Baroness Chalker of Wallasey
My Lords, may I first of all correct the impression which seems to have arisen in your Lordships' House that there has been some delay? It was quite difficult to get Cuba to look at Investment Protection Promotion Agreements until fairly recently. Many negotiations in the past have been much more protracted than I sincerely hope these will be. In fact, Cuba and the Dominican Republic only expressed interest in an IPPA last year when we proposed a draft text to them. We are certainly determined to get the right sort of text and, as I hinted in my answer to the noble Lord, Lord Molloy, I would not want our businessmen only to be protected by the text that some other countries may have with Cuba or any other country.

§ Baroness Blackstone
My Lords, I am sorry to intervene once again but I wonder whether the Minister could answer the second part of my question on whether any interim support is being given to British businessmen.

§ Baroness Chalker of Wallasey
My Lords, I apologise to the noble Baroness and to your Lordships' House. The interim support is to give as much support as possible to British exporters and potential investors through the joint Foreign Office/DTI unit and also through our mission in Havana. That is the best sort of help we can give at present but I believe that our exports, which totalled £14 million last year, are a significant step forward despite the fact that until Cuba becomes a member of the IMF we cannot do anything 523 about the debt burden that Cuba carries, and has carried for some considerable time. That, of course, would help as well.