HL Deb 12 November 1998 vol 594 cc841-3

3.21 p.m.

Lord Newby asked Her Majesty's Government:

Where matters currently stand in the negotiations on the Multilateral Agreement on Investment.

The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville)

My Lords, OECD Ministers ordered a pause in MAI negotiations earlier this year. Following the decision of the French Government to withdraw from negotiations in October, it now looks most unlikely that agreement can be reached on an MAI.

Lord Newby

My Lords, I thank the Minister for that Answer. However, will the Government ensure that, in any future discussions on the subject, there will be involvement of all affected countries, including the developing countries which were excluded from the negotiations that the OECD conducted? Moreover, can he confirm that any son of MAI will contain adequate measures on employment and environmental protection?

Lord Sainsbury of Turville

My Lords, the Government believe that an MAI on the right terms is desirable as it would liberalise international investment flows. The "right terms" means the strong protection of labour and environmental laws. The agreement is helpful to the developing countries and has a proper balance between the commitments that we take on and the commitments taken on by other countries. The most likely event is that negotiations will now take place at the World Trade Organisation, where developing countries are totally represented.

Lord Clinton-Davis

My Lords, can my noble friend the Minister confirm that it was this Government who insisted upon the inclusion, as a condition precedent, of environmental and social conditions; in other words, that it was the initiative taken by the new Labour Government? Further, can my noble friend confirm that at all times at ministerial and other levels non-governmental organisations were involved and, indeed, that there was a requirement for developing countries to be included in the negotiations at a proper level?

Lord Sainsbury of Turville

My Lords, I thank my noble friend for his remarks. It is correct to say that it was the initiative of this Government to make certain that environmental and labour laws were protected. Throughout this process, we have pursued our objective on an open and consensual basis.

Lord Razzall

My Lords, given the fact that it appears to be accepted that this was the wrong MAI, negotiated by the wrong organisation with the wrong people involved, and given the fact that it has been accepted by the Government and others that we clearly need such an agreement, can the Minister say what steps her Majesty's Government are taking to ensure that negotiations in the correct form with the correct people get back on the rails?

Lord Sainsbury of Turville

My Lords, it is very likely that these negotiations will move to the WTO. As my honourable friend the Minister of Trade made clear, the Government see an opportunity to start from a blank sheet of paper and to pursue our objectives there on an open and consensual basis. I believe that the WTO is probably the best place to do so. However, in my view, it would certainly be on the basis of a fresh agenda which would take full account of social and environmental concerns.

Lord Lucas

My Lords, does the Minister agree with the French that the MAI, as it stood, was an unacceptable infringement of national sovereignty?

Lord Sainsbury of Turville

My Lords, the French Government concluded that the MAI was unreformable. However, we never reached that pessimistic conclusion or indeed felt that it was an infringement of national sovereignty. There would have been hard negotiating to do, but we believed that a good agreement was achievable.

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