HL Deb 22 April 1999 vol 599 cc1230-2

3.23 p.m.

Lord Renton asked Her Majesty's Government:

Whether the action of the United States regarding the "Banana war" affects adversely various industries of the United Kingdom, in particular the carton manufacturing industry; and whether they will take: steps to negotiate with the Government of the United States with a view to ending the punitive action which it has taken.

The Minister of State, Department of Trade and Industry (Lord Simon of Highbury)

My Lords, the action of the United States Government in targeting various EU industries in the dispute over the EU's banana import regime has been having an adverse effect on all the sectors concerned, including the folded carton industry. That is why the Government and the European Commission have been working hard to get a resolution to the dispute. The publication of the World Trade Organisation panel reports on 12th April means that there is now a fresh opportunity for the EU to work with the US and the other interested parties to avoid unnecessary damage to our industries and to our trade relations generally.

Lord Renton

My Lords, I thank the noble Lord for that helpful Answer. While I welcome the help that the Government have already given to the cashmere exporters, mainly in Scotland, will the Government also assist those who export cartons? In my former constituency, they have been hit severely, causing unemployment on a large scale. On the question of getting the European Union to observe the World Trade Organisation arbitrators, will the Government insist that the banana quotas must be revised so that the United States will end their discriminatory tariffs?

Lord Simon of Highbury

My Lords, the scheme that the Government brought forward to guarantee the bonds requested by US Customs in respect of cashmere knitwear was developed in response to a particular feature of the cashmere industry, which is, of course, of a highly seasonal nature. Now we are working hard to see whether we can displace the remaining US retaliation by other means, possibly by an interim solution linked to a definitive new regime which is clearly and irrefutably WTO compatible. That is the direction of the negotiations now under way. To conclude them speedily and to obtain an EU alignment as early as possible is most important.

Lord Bruce of Donington

My Lords, without in any way prejudicing the efforts being made by the institutions of the European Union to deal with this matter, will the noble Lord agree that this country, as the sixth most powerful trading nation in the world, has its own rights, on its own account, to pursue its own interests and to supplement those made by the European Union acting as an organisation?

Lord Simon of Highbury

My Lords, it is clear by the decisions of both Houses of Parliament, which represent our democracy, that we have decided to give certain powers to the EU to negotiate on our behalf. My opinion is that that was an extremely sensible thing to do because negotiations in international trade should be made at the level at which most people are likely to see successful outcomes. In issues of that nature, Europe has continued and will continue to serve us well. That does not stop us making our views on which to build a consensus position clear to our partners, as necessary.

Lord Pilkington of Oxenford

My Lords, can the noble Lord say whether or not the reports that have been issued that the European Union's policies benefit the producers of bananas rather than the Caribbean islands are true statements?

Lord Simon of Highbury

My Lords, the agreements that are in place currently are to ensure that all producers are given as fair a position as possible within a complex, multi-national negotiated scheme. In the next round of negotiations we shall try to ensure that the appropriate balance for all consumers is maintained.

Lord Monson

My Lords, can the noble Lord confirm that the substantial quantities of bananas exported from Guadeloupe and Martinique are not the subject of this dispute, as those two Caribbean islands are legally part of the French Republic and, therefore, the United States has no valid basis for objecting to their exports? Is it not only the English-speaking Caribbean islands which stand to suffer?

Lord Simon of Highbury

My Lords, it is true to say that there are different definitions of producer within the complexity of the agreement currently in place. In trying to resolve a complex, multi-national negotiation between two large powers—Europe and the USA—I am sure that the interests of all consumers will be taken into account.

Baroness Miller of Hendon

My Lords, as the Americans were forced by the World Trade Organisation to reduce their exorbitant sanctions, will the Minister tell the House why the Secretary of State for Scotland was sent to negotiate that those releases be allocated mostly to Scotland? Given that the Government said that they would fund the deposits for the cashmere trade, why could not those funds be allocated to other United Kingdom industries, such as those mentioned by my noble friend, which are suffering greatly? Or is it because of the Scottish elections and there will be very few Labour votes in Huntingdon?

Lord Simon of Highbury

My Lords, I said in answer to an earlier question, as I am sure the noble Baroness heard, that the specific release granted temporarily for the cashmere industry was based on the fact that it is a seasonal trade. It is surprising that the Opposition find it necessary to laugh at or be confused by a successful operation by a British Minister to alleviate damage to any sector of industry in Great Britain, or that they feel it is something to be wondered at.

Baroness Ludford

My Lords, is the Minister finding any understanding in the United States that while many of us want the European Union to be committed to free trade, there is some unease that there is too much domination of corporate power in some of these interests, whether it is bananas, GM food or hormone-treated beef? Is there any understanding in the United States that this is not just a free trade issue? There are also environmental concerns and concerns about corporate power.

Lord Simon of Highbury

My Lords, I agree that these are complex issues and do not just reside on the relationships in trade, which in general terms are very good between the USA and Europe. To ensure that I do not stray too far into a long answer on environmental issues of sustainable development, perhaps the noble Baroness will read the excellent Hansard report of the debate last night which went into these issues for at least four hours.