HL Deb 09 December 1996 vol 576 cc911-6

5.50 p.m.

Baroness Chalker of Wallasey rose to move, That the draft order laid before the House on 26th November be approved [5th Report from the Joint Committee].

The noble Baroness said: My Lords, I beg to move the draft order in Council concerning the Europe Agreement establishing an association between the European Community on the one hand and Latvia on the other; and thereafter similar orders with Lithuania and Estonia. I shall speak to all three orders together because they cover essentially the same purposes, but of course I shall separate the answers to any questions that the noble Baroness may have on these orders when I come to reply.

These three orders specify the agreements as European treaties under Section 1(3) of the European Communities Act 1972. They are mixed competence agreements: that is to say, some of their provisions fall within Community competence and others fall within the competence of member states. They therefore require ratification by each and every European Union member state and the assent of the European Parliament before they may enter into force. In the case of the United Kingdom, the draft orders need to be approved by both Houses so that we may ratify the agreements.

The collapse of the Iron Curtain in 1989 led to an historic opportunity to bring together again the whole family of Europe. The European Union has, since then, been pursuing new relationships with the countries which have emerged from the collapse of the monolithic Soviet system as well as with the nations of central Europe. The Baltic states have regained their independence. They have worked hard and fast to establish their position as European nations. The United Kingdom has been one of their strongest supporters, offering through the Know-How Fund a valuable contribution to the transition process. Within the European Union we have worked hard to create the conditions which will lead, through the pre-accession strategy agreed by the European Council at Essen in December 1994 and through the support of the PHARE programme, towards membership for all countries with Europe Agreements.

The agreements before your Lordships today are vital to the process of European Union enlargement. Through these agreements, the European Union and its member states will build a closer relationship with the Baltic states, increasing trade and economic co-operation, engaging in political dialogue and opening up co-operation across the whole range of the European Union's business.

As with the six central European countries whose Europe Agreements are already in force, we look forward to building through the Europe Agreements a path for the Baltic states to full and active membership of the European Union. We shall continue to support and assist Estonia, Latvia and Lithuania along the way.

This is a debate which is good news: good news for us, good news for the European Union and very good news for the three countries of Latvia, Lithuania and Estonia. The agreements before your Lordships' House, beginning with the agreement for Latvia, are vital to that process. I commend first the order on Latvia to your Lordships.

Moved, That the draft order laid before the House on 26th November be approved [5th Report from the Joint Committee].—(Baroness Chalker of Wallasey.)

Baroness Blackstone

My Lords, I am most grateful to the Minister for introducing the orders.

The agreements seem to be broadly similar to those that we discussed earlier this year on a number of other former republics of the Soviet Union, at which time I raised a number of detailed questions about them and was very glad to receive satisfactory answers. So I do not intend to ask any detailed questions on these particular orders.

However, I shall make one comment to the Minister. It is the case, of course, that some Eurosceptics, particularly in her party—there are very many more in the Minister's party than there are on this side of the House—seem to have the view that widening is a way of avoiding deepening. I am sure the Minister would want to resist any such interpretation as the purpose of these agreements. That is not what they are about.

Let me also say that I am extremely glad that the United Kingdom Government have been such a strong supporter of the Baltic states. As the Minister said, they are countries which have recently gained their independence and escaped from the somewhat repressive and monolithic rule to which they were subjected under the former Soviet Union. They are countries which are both geographically and culturally very much part of northern Europe and have close links especially with Sweden and Finland, which are now members of the European Union.

The Minister mentioned the Know-How Fund and the extent to which it had been used to support developments in Latvia, Estonia and Lithuania. Can she perhaps tell the House whether there are any new proposals under the Know-How Fund which will help to take further forward the proposals in these agreements?

On this side of the House we very much look forward to the eventual enlargement of the European Union to include all three Baltic states. We certainly owe it to all three countries to do all that we can to help them develop a market economy and sustain a strong and healthy democracy.

We also welcome the fact that the agreements cover social and cultural co-operation as well as economic and financial co-operation. That means that there ought to be new opportunities for British business. I do not know whether the Minister can comment on whether she is aware of those opportunities now being taken up in any particular sectors, but I hope that they will lead to new joint ventures and more investment by UK companies in the Baltic states as well as an increase in exports.

Membership of the European Union is particularly important to the Baltic states, since any decision to enlarge NATO which may be taken next year or the following year is extremely unlikely to include them. Perhaps the Minister would like to confirm that. As I understand it, that is the position.

Finally, perhaps the Minister can give some indication as to the timing of the ratification of the agreements by both the European Parliament and other member states.

I end by very much welcoming the agreements and the proposals that they contain.

6 p.m

Lord Wallace of Saltaire

My Lords, on behalf of my party I welcome these agreements. I believe this takes us up to 10—I have not yet checked whether we have to ratify the Slovene agreement. It also takes us along the road towards substantial further enlargement of the European Union. I too underline the strong statement in the Europe Agreements of commitment and conditionality on political and civil rights in those countries which is causing some difficulty for Slovakia as another Europe-associated state.

I underline what the noble Baroness, Lady Blackstone, said in regard to the level of confusion over enlargement that we see in many governments, and certainly the considerable confusion over the relationship between enlargement of NATO—now moving ahead rather rapidly—and enlargement of the European Union. Ten days ago in Brussels I heard a senior American diplomat say vigorously that the United States expects the European Union to move ahead rapidly with enlargement to the three Baltic states precisely because they cannot be considered as members of NATO. That is a recipe for a poor approach to enlargement. Perhaps the Minister can assure us that the Government will keep us informed as often as possible of that disjointed approach towards opening up the western European institutions to eastern Europe.

I was disturbed to see the President of the Commission quoted in the Financial Times last week as saying that we may see one or two east European states joining in the year 2003. That is one occasion on which I shall be happy to know that the British Government protested to the Commission about the statement he made, which was not contradicted by members of his Cabinet.

Of the three states, Estonia is the most advanced. It has a good case for being within the first group to join the European Union, and I hope that Her Majesty's Government are pressing its case to be alongside Poland, the Czech Republic and Hungary as those that will be moving towards early membership.

Baroness Chalker of Wallasey

My Lords, I thank the noble Baroness, Lady Blackstone, and the noble Lord, Lord Wallace, for their remarks. As with previous orders that we have debated in your Lordships' House, we all know that these orders are not only in the interests of the three countries—Latvia, Lithuania and Estonia—but also very much in the interests of the UK and the European Union as a whole.

A few questions were asked of me during this short debate and perhaps I can seek to explain what is going on and say a little about timing. The interim agreements for the Baltic states are already in force, as your Lordships will know. They give early effect to the trade provisions of the Europe Agreements, and all other provisions of Europe Agreements, falling within sole Community competence, pending the ratification and coming into force of the latter. Those provisions do not require ratification. The associates can benefit quickly from trade liberalisation, and it is clear that they have done so.

The noble Baroness, Lady Blackstone, spoke about trade. Trade with Estonia, to which the noble Lord, Lord Wallace, alluded, is growing rapidly. Our exports to Estonia are up 105 per cent. to £39 million this year so far, and those figures are now three months old. Imports are up 48 per cent. to £113 million. Trade is growing rapidly with Latvia, too: exports are up 170 per cent. to £56 million so far this year and imports up 66 per cent. to £199 million. It is of note that the United Kingdom is the largest foreign investor in Latvia, in the modernisation of the Latvia telecom system which is being carried out by Cable & Wireless with Telecom Finland. In Lithuania, again trade is growing rapidly: exports are up 135 per cent. to £57 million so far this year and imports up rather less-2 per cent.—to £124 million this year. Trade is therefore beginning to roll nicely, which is good both for us and for the three Baltic states individually.

The noble Baroness, Lady Blackstone, asked whether we had new proposals for the Know-How Fund, which has already been doing great work in helping all three Baltic states to prepare for eventual access to the European Union. That is the new priority sector for the Know-How Fund. Some projects, such as the training of lawyers, giving advice and assistance to the judiciary, are already underway. A number of other projects are in the preparation stage. Since none of them have been decided one way or the other, it is perhaps better that I write to the noble Baroness when there is any advance on the current situation. However, I can assure her that they look at different aspects of European Union integration, and the Baltic states are benefiting from specific applications of the Know-How Fund just as other applicant states have already benefited. The priority in the "non sectors", as they are called, are agriculture, financial services, small and medium enterprise development, energy and good government. Those are continuing well. There will be more to say about them eventually.

As to when the three Baltic states may eventually join, I am not in a position to give any undertakings. We know, as the noble Lord, Lord Wallace of Saltaire, said, that Estonia is preparing speedily. Whether or not it will be in the first wave I cannot say at this moment. The fact that it is preparing so thoroughly is good news and should encourage our partners in the European Union to give it as much help as we are seeking to do.

The noble Lord, Lord Wallace, also asked about defence matters—security is obviously essential for the Baltic states. It has not yet been decided whether or not the Baltic states will join NATO. There are a number of countries also eager to join NATO. The guiding principle is that the alliance should be strengthened by enlargement. That is the consideration taken in the North Atlantic Council whenever the future is discussed. There will be continual encouragement, but NATO is determined that the admission of new members must not mean less security for those not invited, nor must it mean new dividing lines in Europe—a philosophy with which I know the noble Lord, Lord Wallace, agrees. We are committed to NATO's work to broaden and deepen the military and political dimensions of Partnerships for Peace. That will be an integral part of the European architecture, not a consolation prize for those who do not happen to join NATO.

The noble Baroness, Lady Blackstone, could not resist a little tease when she rose to her feet. The difference between her party and mine is that when people in this party disagree they speak up all the time; in her party they are hiding it away until sometime next year. If she were as sure as I am of what some of her Back-Benchers were up to she would not look as happy and contented as she does. However, that is a long way from these excellent orders. I commend the order to the House.

On Question, Motion agreed to.