HL Deb 16 April 1996 vol 571 cc618-27

6.46 p.m.

Baroness Chalker of Wallasey rose to move, That the draft order laid before the House on 29th February be approved [13th Report from the Joint Committee].

The noble Baroness said: My Lords, I believe it may be for the convenience of your Lordships if I speak to the draft Orders in Council concerning partnership and co-operation agreements between the European Communities and their member states on the one hand, and the four countries of Belarus, Moldova, Kazakhstan and Kyrgyzstan on the other, together so as not to keep repeating essentially similar facts.

These orders specify the agreements as Community treaties under Section 1(3) of the European Communities Act 1972. They are mixed agreements. In other words, some of their provisions fall within Community competence and others fall within the competence of the member states. They require ratification by all member states, by the European Communities and by the relevant third country before they can enter into force. The draft orders need to be approved by both Houses so that Community obligations under the agreements may be implemented by the United Kingdom. These orders are of a standard nature but are of great interest because they are the first agreements that Europe has had with any of these countries.

The break up of the Soviet Union in 1991 presented us in the West with a unique opportunity to help the new sovereign independent states to find their place in the international order. The Baltics were of course a case apart. We were able to correct the mistakes of history and welcome these countries back into the European fold with the promise of eventual membership of the European Union. But for the 12 countries emerging out of the monolithic Soviet Union, the European Union needed to construct a new, individually tailored relationship with each of them. Membership of the European Union is not on the agenda so a different but nonetheless constructive framework was required. We needed to develop a relationship based on partnership and practical co-operation to help these countries through the difficult process of establishing genuine political and economic reform.

The partnership and co-operation agreements, which are explicitly based on respect for democratic principles, provide the flexibility to take account of the differences between, for instance, Russia and Kyrgyzstan. Generally, the agreements provide for regular political contacts, increased trading opportunities and wide-ranging economic co-operation.

The first such agreements were signed with Russia and Ukraine in 1994, and ratified by the UK in 1995. Negotiations with Georgia, Armenia and Azerbaijan have just been concluded. The European Union intends to negotiate partnership and co-operation agreements with the remaining countries of the former Soviet Union as soon as these countries are in a position to fulfil the political and economic obligations contained in such agreements.

It will take some time before the partnership and co-operation agreements come into force because of the need for ratification by all the parties. To bridge this gap, the European Community has negotiated interim agreements with each country. These agreements, which bring into early effect the trade provisions of the wider-ranging PCAs, can be suspended if one of the countries fails to fulfil its obligations, such as respect for democratic principles.

It is in all our interests that the process of reform in the former Soviet Union should succeed. The success of that process does not lie entirely in our hands. But I believe that the European Union can help that process along by providing practical support, just as we do bilaterally on our own programmes. The agreements provide a framework to achieve that objective of providing practical support. I commend the orders to the House. I beg to move.

Moved, That the draft order laid before the House on 29th February be approved [13th Report from the Joint Committee].—(Baroness Chalker of Wallasey.)

Baroness Blackstone

My Lords, I do not wish to oppose the orders in any of their aspects. Indeed, we on this side of the House very much welcome them. As the Minister is fully aware, the Labour Party supports the enlargement of the European Union. Of course, the partnership and co-operation agreements do not amount to anything like full-scale membership, but they are a first step in closer relations between the countries of central and eastern Europe and the countries which were once part of the Soviet Union. I agree with everything that the Minister said about the extent to which agreements of this kind help to bind those countries to the West and to support them in their legitimate wish to have sustained democracies and to achieve economic prosperity through market economies. They also provide new opportunities for British business both to trade and invest in those countries. I hope that British firms will take up those opportunities.

I have one or two questions for the Minister. Can she say a little more about the similar agreements that are being prepared for other republics in the former Soviet Union? Which ones are now in preparation? What is the likely timetable? Can she give a little more indication as to the main criteria being used in deciding which of the other former republics will be next in line? There is probably quite a long queue, and many of those countries now want to strengthen their links with the European Union.

Perhaps I may ask the Minister one or two slightly more specific questions. I was somewhat puzzled by the meaning of the unilateral declaration by the French Government in all four cases, which is at the end of the partnership and co-operation agreements. I do not quite follow what that refers to.

Can the Minister say why, in the case of Moldova, Austria Finland and Sweden do not appear at be associated in the final Act whereas they are in the case of the other three? The Minister said earlier that ratification by all member states is required.

Next, I wonder whether the Minister can explain why there are articles about monetary policy stipulating the gradual adjustments of their policies to the European monetary system in the case of Moldova and Belarus, but not in the case of Kyrgyz or Kazakhstan.

Finally, can the Minister elaborate a little on the reasons behind the varying provisions with respect to the applicability of GATT to the four former republics? I recognise that these are complex—indeed, arcane—matters, but perhaps the Minister can confirm that the provisions vary and say why.

In conclusion, I particularly welcome the articles in the agreements on education and training. It is vitally important that all those countries improve their educational systems and develop their training systems if they are to succeed economically. I very much hope that particular attention will be given to those articles in the agreements.

Lord Lester of Herne Hill

My Lords, like the noble Baroness, Lady Blackstone, I very much welcome the content of the agreements and would not in any way oppose the Motions that are before the House. However, I should like briefly to draw attention to my anxiety about the process by which we undertake this scrutiny, if that is not too ambitious a word for it. It illustrates as well as anything the need for more information to be provided in advance to the House before one undertakes such scrutiny.

The starting point for the parliamentarian is the notice that we receive on the Order Paper of the Motions to be moved. Because, happily, the European Communities Act 1972 requires an order to be laid in draft before Parliament, we then receive the order itself. The explanatory note which is attached to the order does no more than provide a contents page for extremely detailed treaties, which in the case of the one that I am looking at now runs to some 99 primary articles which deal with an extremely important range of rights and interests, including most favoured nation treatment, the rights to be accorded to foreign nationals in employment in this country, the right to establish economic enterprises, and so on.

The bewildered parliamentarian who then wants to know what on earth we are doing has to obtain a copy of the agreement itself, which is referred to in what is described as the schedule to the order. There is then no explanatory memorandum to explain (even to someone who is relatively legally qualified like myself) exactly the scope and likely impact of the partnership and co-operation agreements. That does not seem to me to be a very satisfactory process. It is only by a happy accident that we are privileged to be here to approve the orders by affirmative resolution, but that does not arise with most treaties.

I therefore repeat the very modest suggestion that I have made in connection with my little Bill, which is that there should be an explanatory memorandum to enable us in advance to know exactly what we are here to do. There should also be some form of treaties scrutiny committee so that the "arcane" points, as the noble Baroness, Lady Blackstone, so described them, which always seem to be important and difficult matters, can be explored in advance by a specialist committee which can then in a practical way advise the House.

I am encouraged by the fact that in the new Liberal Government in Australia, the new Foreign Affairs Minister, Mr. Alexander Downer, MP, is likely to respond positively to the proposals in this area from the Australian Senate Legal and Constitutional References Committee, so I am informed today by its chairman. I hope that in a practical way we can improve the information that we receive in this House about the likely impact of a treaty, as well as having special scrutiny machinery. This is a good working example of a gap in our system and I very much hope that it can be remedied.

Lord Finsberg

My Lords, I should like to say something about the order dealing with Moldova. I had the privilege of being the Council of Europe's Rapporteur when we considered the full membership of Moldova. I had long conversations with Moldovan parliamentarians and made a lengthy visit to Moldova. I shall be going back to assess the progress they have made. One of the reasons why they have been able to have this agreement is that they have received the seal of good housekeeping of the Council of Europe, without which the European Union is not prepared to do very much for any new member state that wishes to have some kind of association agreement. This covers the field of parliamentary democracy, multi-party parliament, which exists in Moldova, human rights, which are now guaranteed under Moldovan legislation, and many other matters. Great progress has been made in Moldova under President Snegur.

However, there are certain difficulties. Perhaps my noble friend will say something about how she believes the agreements will operate inside Moldova where there is the so-called breakaway Republic of Transdniestia. Incidentally, if any noble Lord goes to Tiraspol, the capital of Transdniestia, and is blind-folded, he will believe that he is in the Soviet Union of the 1950s. Probably the last remaining statue of Lenin is at the steps of their headquarters. When I went there to discuss with non-governmental organisations the problems that they had, the matter was rehearsed. All of us had seen it in the past. We were told how wonderful the government was and that there were no problems of any kind. All I need say is that there is gross abuse of human rights in that part of Moldova and virulent anti-Semitism.

The OCSE has been doing a very good job in trying to find a way to make the writ of the freely elected Government of Moldova run throughout the country. It has been aided by both Russia and the Ukraine; that is to be welcomed. In contrast to the somewhat unpleasant things I have said about Tiraspol, I can tell noble Lords that Moldovan wine is very drinkable. I hope to see it on the list in your Lordships' House.

How do we ensure that any benefits that accrue from these proposals will be given to ordinary citizens who are ruled by the so-called government of Tiraspol without interfering with the sovereign rights of the freely elected parliament and government of the Republic of Moldova as a whole?

7.3 p.m.

Lord Thomson of Monifieth

My Lords, I should like to say a few words about these agreements which we support. It is almost exactly 12 months since the Minister introduced the partnership agreements with the Russian Federation and the Ukraine. The present series takes that a stage further. When the Minister spoke a year ago she emphasised how different the new member states of the former Soviet Union were and the need for individually tailored relationships. The present group illustrates vividly that the Minister was absolutely right. Belarus and Moldova lie between the Russian Federation and east and central Europe and the European Union. Belarus has, I believe, a high degree of monetary integration with the Russian Federation. They are both undoubtedly European states. On the other hand, Kyrgyzstan and Kazakhstan are undoubtedly Asian states. The latter is a huge country. Kyrgyzstan is a tiny republic on the Chinese frontier. When one looks at an atlas one discovers that both are more than three times further away from Moscow than we are in London. I was fascinated to read that Kyrgyzstan had a reputation for being the most democratic country in central Asia with a go-ahead president. There is a certain amount of disillusion setting in. One of the Chatham House journals reported that in the elections last year there was a sense of shock when it was discovered that 30 per cent. of the new deputies were being investigated by the state prosecutor's office for illegal financial dealings.

It is against that background that the task of the partnership and co-operation agreements in promoting a plural democracy and a liberal market system must be seen. The noble Lord who has just spoken is absolutely right to draw attention to some of the difficulties in ensuring that the assistance we give is used in the wisest and best ways. I believe that it must be a long term, patient process of well directed assistance and sustained dialogue at many different levels.

The European Union funds of TACIS and PHARE are of great importance, as are Britain's bilateral know-how funds. Recently, I asked the Minister a series of Written Questions about the scale of them. I am grateful for the answers that she gave on 20th March. There are very substantial sums of European Union money involved. It is disturbing to discover how much worrying evidence there is. The Brussels administration is excessively bureaucratic in dealing with them. I draw the attention of the Minister to the Court of Auditors' criticism. It called on the European Commission to discharge its responsibilities in relation to the present state of deadlock and uncertainty.

The Minister may be pleased if I go on to say that my impression is that the United Kingdom's bilateral know-how fund operates more flexibly, effectively and efficiently than Brussels. I make a declaration of interest as the trustee of a charity that receives grants from the know-how fund to try to train journalists in the former Soviet Union in the virtues of a free press. Under our own bilateral know-how funds we spent £228 million to the end of March 1995. In one of her Answers the Minister told me that in the current year we expected to spend £80 million. The contrast between the European Union's efforts and those of our know-how funds is instructive, even allowing for the vast differences in scale. I believe that the know-how funds greatly benefit from the experience of our Civil Service here in being well versed in administering aid programmes. They are much more flexible and less bureaucratic than PHARE and TACIS seem to be. Inevitably, they had to overcome a number of early difficulties with outside consultants who were eager to work for the know-how funds—perhaps we provided some of them—but who knew little about the target countries. I believe that those difficulties are being overcome.

The figures I have given for the British know-how funds do not include the charity know-how fund. A special word of praise is called for in that respect. The charitable voluntary sector in this country—and, I am sure, in other western countries—is a jewel in our crown. However, in the countries of the former Soviet Union the voluntary sector, if it ever existed, was stifled during 70 years of communist totalitarian rule. The charity know-how fund normally does good in terms of the intrinsic value of the projects with which it is associated, but it may be doing even more good by educating others in the virtues of voluntary activity and doing things for oneself.

To create from scratch a tradition of voluntary service in partnership with the state is a further example of the fact that changing a political and economic culture is a long, slow business. It requires infinite patience and tolerance and a capacity to face setbacks and not to be thrown off course by media sensationalism. I believe that it is that long term view, including rigorous scrutiny of the way in which resources are used, that is the important starting point in the years that lie ahead under these partnership and co-operation agreements.

Baroness Chalker of Wallasey

My Lords, I am grateful to all noble Lords who have spoken in this short debate. I shall do my best to answer the questions posed, starting with the noble Baroness, Lady Blackstone. Having welcomed the orders, she first asked me whether there were similar agreements for other republics and what was the timetable. Perhaps we may just look at the signing of the partnership and co-operation agreements. They have been signed for Russia, Ukraine, Belarus, Moldova, Kyrgyzstan, and Kazakhstan. For Uzbekistan, the EU opened talks last month; for Turkmenistan, the possibility of talks is being examined; for Tajikistan, at present there is little chance of a partnership and co-operation agreement, but let us hope that it will put its house in better order, and one such chance may come. We expect signature for Armenia, Georgia and Azerbaijan to take place this month. So that is the state of similar agreements.

The noble Baroness then asked me about the main criteria for the agreements. The main features are obviously that there should be political dialogue at ministerial, parliamentary and official levels; that there should be closer trading links, in particular, through the mutual abolition of quotas on most goods; most favoured nation treatment on tariffs; the abolition of discriminatory internal taxes. The Belarus and Moldova agreements allow for talks in 1998 about eventual free trade areas.

The third feature relates to the provisions on parties doing business in one another's territories, including the terms upon which companies may set up, the regulatory framework for investment and helping to bring the Belarusan, Moldovan, Kazakh and Kyrgyz practice into line with the EU, for example, on competition and intellectual property.

The fourth main area is that there should be continued economic co-operation under the TACIS programme, to which the noble Lord, Lord Thomson of Monifieth, has just referred. I shall return to that issue in a few moments.

There are slight differences in the four agreements, but on the whole they are largely similar. The differences that exist are textual ones reflecting the different negotiating priorities of the four countries. For instance, each country had its own list of goods to be exempted from the requirement to grant most favoured nation treatment. In areas where the MFN treatment applies, the EU and the other party give each other the same trading advantages that they accord to all other countries to which they grant MFN treatment.

On substance, the Belarus and Moldova agreements contain an evolution clause, offering a review in 1998 of the possibility of a free trade area. There are no social security provisions in the Kazakhstan and Kyrgyzstan agreements. All EC goods imported into Kazakhstan and Kyrgyzstan will be free of quotas and equivalent measures. For EC imports into Belarus and Moldova, exemptions for such restrictions will apply to goods other than textiles and coal and steel products.

There are some differences between these four PCAs and the Russian and Ukrainian PCAs. Russia and Ukraine are similar to Belarus and Moldova for the obvious reasons that they have had a similar situation, but only Russia and Ukraine PCAs provide for a dialogue at the highest level; that is to say, at presidential level. The Russian agreement, which is not before us tonight, contains some transition periods which take account of its special relationship with the rest of the CIS.

On the further questions asked by the noble Baroness, let me explain that the reason there is a French declaration at the end is that there is no need for the French overseas territories (the DOM/TOMs) to be bound by the PCAs. That is all that is meant by that.

The noble Baroness then asked why Austria, Finland and Sweden do not appear to have signed the Moldova PCA. That was because the Moldova PCA was signed on 28th November 1994, before those three countries acceded to the EU. I can assure the noble Baroness that Austria, Finland and Sweden agreed on their accession to take on the obligations that apply under the PCAs.

The noble Baroness asked me about monetary policy articles on Belarus and Moldova, but not on Kazakhstan and Kyrgyzstan. I wish to look into that a little more than I have been able to while listening to other noble Lords. I shall write to the noble Baroness and others who have spoken with a full explanation. I can assure the noble Baroness that there is nothing sinister about it.

The last question that the noble Baroness asked me was about the reasons for the GATT differentiation. I believe that she is aware that all agreements contain references to the GATT, including the further development on accession. There are no real differences. I can read her a long explanation of the whole of the WTO arrangements. Obviously the PCAs can be amended to take into account accession to the WTO. There are different situations for each of them. The UK, however, welcomes the prospect of all these countries eventually becoming members of the WTO on the basis that they apply and that they then respect the WTO's rules.

As far as I know, the progress being made is normal for each of the countries. If the noble Baroness would like a note of that, I suggest that I put it in my letter to her rather than detain your Lordships now.

The noble Lord, Lord Lester of Herne Hill, returned to a common interest that he and I now definitely share about getting better explanations to your Lordships in advance of debate. May I assure him that explanatory memoranda are submitted on all PCAs. That is part of the normal scrutiny procedure. I must apologise if he did not know that for these four agreements the committee scrutinised the explanatory memoranda in 1995. I cannot tell him exactly when in 1995 that was, but they have been through the process. He knows full well that he and I believe in this process and that it is already working well for PCAs.

My noble friend Lord Finsberg asked me about Moldova, in which he has taken such an important interest as the leader of the group on the Council of Europe. I understand that he is puzzled about what can be done over Transdniestia. We obviously hope that there will be an early negotiated settlement to the dispute which takes account of the independence, sovereignty and territorial integrity of Moldova. We have warmly supported Moldova's efforts since independence to introduce and sustain reform. We have no reason to doubt Moldova's commitment to fulfilling her obligations under this new agreement, but, as my noble friend made clear, there is plenty of action going on through the OSCE at present to try to resolve the Transdniestia dispute. I believe that that is the way in which to proceed with the matter. It does not invalidate putting the PCA forward to your Lordships tonight.

The noble Lord, Lord Thomson of Monifieth, told us about the importance of auditing what goes on and we will accept that. He went on to talk about the TACIS and PHARE programmes. The TACIS programme relates to these particular orders. His kind comments about the know-how funds and the officials running them are very much appreciated. In 1989, when we introduced the funds, the procedures were experimental. However, as he realised, we had the benefit of many years of experience of technical co-operation in other parts of the world which we put together with new experience of the former Soviet Union countries and the central and eastern European countries. We now see that the British know-how funds are almost a role model for others. We cannot impose our procedures on others but I believe that increasingly the programmes run by the European Union are taking a lesson out of a good housekeeping book. Certainly the PHARE programme has improved considerably and adopts a number of techniques that we have used during the past six years. I hope that the TACIS programme will become a great deal more flexible because my experience is exactly that of the noble Lord, Lord Thomson of Monifieth.

Perhaps I may respond to the noble Lord's comments about the charity know-how funds. During my somewhat limited travels in the former Soviet Union I have found that the idea of helping oneself by charitable or non-governmental efforts is catching on fast. Therefore, anything that the charity know-how funds can do to aid that process reinforces the efforts which are being made initially in small ways in many different areas. That process is many light years away from the experience of the former Soviet Union.

I have sought to explain the matters which were a little less clear. I shall write to the noble Baroness, Lady Blackstone, and copy my letter with extra detail to other noble Lords who have spoken today. It is necessary to move each order individually. I believe that the PCAs will offer substantial encouragement to the process of reform in the four countries. That is in the interests not only of the countries themselves but of the United Kingdom and the European Union as a whole. I commend the order to the House.

On Question, Motion agreed to.