HL Deb 18 July 1996 vol 574 cc998-1000

3.30 p.m.

Viscount Montgomery of Alamein asked Her Majesty's Government:

Whether they will take any action to counteract the effect of the United States Helms-Burton Act on United Kingdom trade.

The Minister of State, Department of Trade and Industry (Lord Fraser of Carmyllie)

My Lords, we welcome the President's suspension for six months of the right to bring actions in United States courts. At the same time, we regret the President's decision not to suspend completely provisions which threaten companies doing legitimate business in Cuba. We will be discussing the details of the President's decision with the United States Administration. We shall need to consider in consultation with our European Union partners what action, if any, should be taken in the light of the President's statement.

Viscount Montgomery of Alamein

My Lords, while that is all very well so far as it goes, is my noble and learned friend aware that the draconian legislation has serious extra-territorial provisions which are of a drastic nature and widely resented by the countries trading with Cuba; for instance, Canada, Mexico, other members of the European Union and ourselves? Will he ensure that the actions which Her Majesty's Government may consider are sufficiently robust as to have some effect on resisting interference with the free flow of international trade, in which we and the United States believe, and which is the objective of the World Trade Organisation?

Lord Fraser of Carmyllie

My Lords, certainly we hope that we have made clear to the United States authorities where we stand on the Helms-Burton legislation. As recently as last week, prior to the President's decision, my right honourable friend the President of the Board of Trade in a speech to the American Chamber of Commerce made it clear that the United Kingdom Government deplored the action that had been taken.

We need to separate the two issues; first, the reform in Cuba, which the United Kingdom firmly supports, and, secondly, unilateral actions against United Kingdom companies and others, which we deplore. We cannot accept that in applying a principle of extra-territoriality the United States has the right to attack the interests of UK individuals and companies in order to impose its approach to foreign policy issues on its partners.

Lord Peston

My Lords, I believe that today, in the light of the air accident reported this morning, we all find it difficult to say anything which may be regarded as critical of the United States. None the less, the matter is of the utmost seriousness, as the noble Viscount said. Has not the United States stated, when dealing with regimes which are not democratic in one way or another, that the best way of encouraging those regimes to go in a sensible direction is, first, to trade with them and, secondly, to try to raise their standard of living? Other than the extra-territoriality issue, which is disgraceful, is not the problem that the United States is acting counter-productively as regards the future of Cuba and its relationship with the rest of the world?

Lord Fraser of Carmyllie

My Lords, whatever the United States may or may not have said on previous occasions, it would appear that there is something of a trend within that country to go along this road. I am sure the noble Lord is aware that not only is the Helms-Burton legislation causing alarm but so also is legislation proposed in respect of Iran and Libya.

I too wish to emphasise that we would rather not have a dispute with the United States about this matter. We share its ultimate objective in securing a modern democracy and a proper regard for human rights in Cuba. We believe that the right way forward is to encourage it to trade and to bring about reform in that way. We are considering a number of options in terms of a possible review of entry permission procedures and steps which might be taken with our partners.

Earl Russell

My Lords, will Her Majesty's Government remind the United States that 220 years ago it declared independence from us, that by virtue of that principle we are independent from it and that the doctrine of extra-territoriality is incompatible with that principle?

Lord Fraser of Carmyllie

My Lords, I doubt whether it is necessary for us to repeat that to the US. It has been said repeatedly. The view that it should be entitled to look to territoriality has been held vigorously by the US. There appears to be some indication that United States business is beginning to understand that there is a possibility of reciprocity which could be damaging to it. However, the United States must appreciate that if we act we have the prospect of acting not only on our own but with partners. For instance, if some of our partners were to consider introducing provisions along the lines of our own protection of trading interests, that might have a considerable effect.

Baroness Young

My Lords, is my noble and learned friend aware that, although those of us who take an interest in particular in Cuba are glad that the President of the United States has made a small move on the Helms-Burton legislation, it is having a most serious effect on a number of British companies? Is he further aware that it is of great importance that we should be able to uphold the principles of free trade with countries with which we have diplomatic relations and a normal international relationship? Will my noble and learned friend confirm that we are seeking for Cuba to move towards democracy and a free enterprise economy and that trading is the best way of achieving that particular aim?

Lord Fraser of Carmyllie

My Lords, I doubt whether any Member of your Lordships' House has done more than my noble friend in attempting to secure a normalisation of trading relations with Cuba. We support every effort that she makes in bringing that about. We are concerned not only by the fact that the President has taken limited action under Title 3 of the Helms-Burton Act but also by the fact that there is in place Title 4, which would exclude from the United States directors and their families and associates. Indication has already been given that two prominent British businessmen may be excluded from the United States. Equally, I wish to make it clear that we deplore that action but, in the first instance, any appeal against it is for the individuals concerned.

Lord Ezra

My Lords, in delicate matters of this kind, which will clearly damage relations between us and the United States and its other trading partners and allies, is there not a procedure for prior consultation and discussion which would normally occur between other countries?

Lord Fraser of Carmyllie

My Lords, I can confirm that prior to the introduction of the legislation, from the first stages of its proposal in Washington, we have pointed out that we would regard it as unacceptable because it relies on the principle of extra-territoriality. I regret that the political points that have been made and the strong action that has been taken by individual British companies which trade in both the United States and Cuba has not yet brought about what we consider to be a satisfactory outcome.

We shall maintain that pressure and hope that it will be maintained by our partners in the European Union and, in addition, Canada and Mexico, which are probably most affected. I trust that discussions will mean that when the six-month period comes to an end we will have achieved some resolution of this very thorny issue. We do not wish to fall out with the United States over this issue; we would prefer to trade normally.

Baroness Hooper

My Lords, in view of what my noble and learned friend has already said, can he give us an idea of how many British companies have been affected by United States threats under the Helms-Burton Act and how many companies have protested to the Foreign and Commonwealth Office or the DTI?

Lord Fraser of Carmyllie

My Lords, it is difficult to give an indication of those which have protested to the DTI or to the Foreign and Commonwealth Office. They may consider that they have put themselves at risk of appearing on a United States' hit list if they indicated that they had an interest in the matter. In so far as I am aware, only two British directors of a Canadian company have been identified for an exclusion order from the United States.