Latin America: Trade

HL Deb 08 February 2000 vol 609 cc582-98

7.26 p.m.

Baroness Hooper

rose to ask Her Majesty's Government what plans they have for promoting trade with Latin America in the light of the review by British Trade International.

The noble Baroness said: My Lords, the purpose of this short debate is, first, to ascertain the Government's latest plans to help and support British exporters in finding new markets and further developing existing trade and commercial links. Secondly, it is to inquire what the proposed changes may be. Thirdly, it is to ensure that at least some of the views of those who have been working in the field are given due consideration before it is too late.

My own particular focus, as president of Canning House (the Hispanic and Luso Brazilian Council), will be on Latin America and in particular on the work of LATAG, the Latin American Trade Advisory Group. My noble friend Lady Young will, I believe, concentrate on the Caribbean Trade Advisory Group. I am most grateful to her and to all speakers who are going to contribute in either a general or specific way to this debate from all sides of the House.

The immediate background and the reason for the timing of this debate follows on from the review of the current official arrangements for the support and promotion of exports initiated in June 1998 by the Foreign Secretary and the then President of the Board of Trade. Sir Richard Wilson was appointed to head the review team, composed of leading industrialists and senior civil servants.

This led to the Wilson Review, published in February 1999, which considered five broad options for structural change, and came down in favour of a unified DTI/FCO operation for furthering and improving British trade. Thus British Trade International was born in June 1999. So far so good, although these developments did not catch the headlines and to this day I believe that a large number of people in the business world are quite unaware of the changes.

One of British Trade International's first functions was to look at the role of business advisory groups. There are some 44 various groups covering most parts of the world, in terms of individual countries, regions and sectors of trade. Some of these work well and some do not. Some of these operate "in-house", within the Department of Trade and Industry—or, as it now is, British Trade International. Some of them are "out-housed", as in the case of LATAG.

Perhaps I may move now from the general and dwell particularly on the Latin American Trade Advisory Group as an example of an out-housed area advisory group which has worked extremely well. In your Lordships' House, I hardly think I need reiterate the desirability of a strong British presence in the important developing markets of Latin America. Suffice it to say that the United Kingdom is the third largest investor in Latin America after the United States and Japan. Our exports, however, do not on the whole enjoy a favourable trade balance, and certainly suffered a sharp decline in 1998–99 because of the recession.

Nevertheless, we enjoy very good relations, historical and actual, in the region and we want to send the right signals to Latin American governments at a time when UK support for their various reform programmes is so important and when opportunities for UK trade are expected to benefit as a result.

LATAG has been promoting awareness of Latin America to British exporters in a number of ways. It has put its DTI funding to the best possible use. For example, it has initiated missions to markets no one else wishes to visit, and maintained that focus until the mission sponsors have taken up the role: for example, to Peru and Bolivia in the early and mid-1990s; to Central America in the late 1980s; and currently with the approval of the DTI desks, it plans to visit Ecuador, Colombia and Venezuela in February 2001.

It has targeted consumer goods manufacturers in the United Kingdom and organised 10 exhibitions in a number of markets in Latin America. It has worked closely with the DTI to encourage our mining equipment manufacturers to target the region with a four-year programme; oil equipment manufacturers with a two-year programme; gas equipment manufacturers with a two-year programme; and auto component manufacturers over a four-year programme. It is now targeting our universities to promote healthcare education and training in the region over a three-year period.

It publishes a bi-monthly magazine and a weekly newsletter, neither of which are subsidised by the DTI grant, and has secured 205,000 euros in funding from the European Union in 1998 and 1999. It has achieved all that with a very small secretariat which, nevertheless, represents an in-depth background knowledge of the region, has the necessary language skills and in addition shows proven administrative ability and the personality to carry a representational role as well as benefiting from continuity.

It has benefited from successive high-powered chairmen, enjoys good private-sector support in cash and in kind and, because it is housed within Canning House, shares and benefits the wider work we carry out there.

However, it is in relation in particular to its work with small and medium-sized enterprises that LATAG has been successful. Those of us with experience in the field know that the big boys can to some extent look after themselves, but the contacts and initial moves required by small and medium-sized enterprises must be focused and helped by the expertise that an advisory group such as LATAG can provide. Without a doubt, the work of LATAG has been efficient and cost effective, and we want to maintain and build upon its energy and drive in our continuing efforts in the Latin American markets.

I referred earlier to the business advisory groups' review. It recommends that most of the out-house groups should become in-house under the remit of British Trade International. I understand that North America, the Caribbean and the whole of Latin America will become one in-house group, although the final structure is due to be announced next month.

There is a cautionary tale here. I look back to the unhappy transition from the British National Export Council to the British Overseas Trade Board which was attempted in 1972–72. It was handled abruptly and the regional structure all but collapsed with the old BNEC members simply walking away. I believe that there were instances where in the end the DTI reverted to giving cash support to out-housed activities. We do not want to see a repetition of that. I am indebted to my noble friend Lord Limerick for that information. Had circumstances not changed last year, he would certainly have contributed to this debate, as on so many occasions in the past, from his expertise and interest in overseas trade. In that context, I need hardly add that my noble friend Lord Montgomery, although similarly barred, is following keenly our procedures.

In conclusion, I wish to make a plea. It may sound like several pleas. However, the one objective is to ensure that those vital and growing markets which stretch from Mexico through Central America and the Caribbean, and all the way through South America to Tierra del Fuego, remain as accessible and open to British trade, commerce and investors as they are now—indeed, we should improve on what is happening now—and that the United Kingdom can continue to be seen as an important link or bridge between the development of EU trade with the Latin American markets and the growing regional groupings such as Mercosur and the Andean Pact. My plea for achieving that objective is that the Government should not make change for the sake of change. They should ensure that all necessary consultation has taken place and full consideration given to finding the best possible alternative to the present out-housing arrangements, if change there must be.

Secondly, my plea is that the danger of a "one solution for all" approach is fully recognised and that decisions concerning, for example, the Latin American Trade Advisory Group and the Caribbean Trade Advisory Group, be taken individually and on their own merits.

Thirdly, I hope that the noble Lord, Lord McIntosh, will convey to his noble friend Lord Sainsbury—I understand that he has departmental responsibility for some of those decisions—the concerns and arguments raised in the debate; and the hope that his door will remain open to those who have direct knowledge of and commitment to the work in this overseas trade region before any final decision on making changes takes place.

7.36 p.m.

Lord Rea

My Lords, the noble Baroness has explained the basis of her concerns, in particular the consequences of the transfer from out-house to in-house status for the area advisory groups of the DTI and their merging into larger groups. The noble Baroness concentrated on LATAG. However, she referred to the Caribbean Trade Advisory Group (CARITAG), about which I am sure the noble Baroness, Lady Young, will speak with expertise, and which has the same concerns. Under the aegis of CARITAG is the Cuba Initiative for which the noble Baroness, Lady Young, was the midwife and of which I am a member. I can declare that I have no financial interests in trade with Cuba or Latin. America.

The small secretariat of the Cuba Initiative is provided by CARITAG and housed in the same building. Although many of the recent meetings of the Cuba Initiative have been held at the DTI it is a sub-outhouse—a small garden shed perhaps—compared with the large barns of LATAG at Canning House. I do not think that Canning House would like to be called a barn, but it "out-houses" that organisation.

Although I have visited 12 Latin American and Caribbean counties, I have spent the longest time in Cuba, including being a member of the British IPU Group which visited Cuba in September 1998. As we discussed in the Unstarred Question on Cuba which was introduced by the noble Baroness, Lady Hooper, last year, Cuba had completely to reorientate its external trading arrangements after the collapse of the Soviet Union with whom 80 per cent of its trade was done. That has not been easy, especially with the embargo on Cuba imposed by the United States which is Cuba's natural trading partner. Cubans had to tighten their belts, and nutritional deficiencies occurred in the early to mid-1990s. However, the worst is now over and the Cubans have developed trade links with Europe, Japan, China and other Caribbean and other Latin American countries. The tourist industry is growing rapidly and the sugar crop is now beginning to recover after some lean years.

Until this year, there was a long period when Britain alone among European countries could not, or would not, provide export credit guarantees to Cuba. However, thanks to a considerable extent to the continuous knocking on the door of the Department of Trade and Industry by the noble Baroness, Lady Young, there has at last been a renegotiation of Cuba's modest medium-term debt so that the ECGB may shortly be able to offer loans. Just before he was appointed to the Scottish Office, Brian Wilson, the then Minister for Trade, said last October at the Havana International Fair, The ECGD agreement is of symbolic as well as substantial importance. The old debt has been used as a reason for no progress being made in trade relations between Britain and Cuba. Removing that obstacle has been the focal point for changing relations between the two governments". So I hope to see a rapid rise in British exports to Cuba, despite Helms-Burton and the US embargo. There is a huge need for replacement of the outdated and decrepit infrastructure of Cuba, as well as further tourist associated exports, which Cuba has already been able to pay for since they bring such immediate returns.

The relevance of this to the noble Baroness's Question is that the personal contacts, detailed local knowledge and linguistic ability of members of CARITAG and the Cuba Initiative and the sharing of their experience will be helpful, if not essential, in getting needed British exports to Cuba off the ground. As an example of the kind of value given to such contacts and advisory groups by exporters, I shall read out a couple of paragraphs from a letter sent to me by the president of the British Association of Day Surgery, which is carrying out work in Argentina. Personal contact and friendship still seem to be worth much more than promptness on the fax and e-mail and recently in Argentina involved both political parties at the time of their elections. An advisory group can afford to be a little more eclectic than governments. Half-hearted and misdirected efforts need to be wheedled out which can be more difficult for Government bodies". I hope that the proposed DTI review will in no way curtail the work of these free-ranging advisers.

7.42 p.m.

Baroness Young

My Lords, I am grateful to my noble friend Lady Hooper for raising the question of area advisory groups to British Trade International and their future. I spoke briefly on this matter during the recent debate on foreign affairs. I hope that the noble Lord, Lord McIntosh, understands fully that this is a matter of very deep concern to Caribbean governments, to the business community in the United Kingdom trading with the region, as well as to the members of the Caribbean Area Advisory Group, known as CARITAG.

I should declare an interest as president of the West India Committee and chairman of the British Cuba Initiative, about which the noble Lord, Lord Rea, has already spoken. Furthermore, I hope that the noble Lord will pass on to his noble friend Lord Sainsbury our anxieties about the proposed changes, because I understand that, as part of the plans to reorder priorities within BTI, a decision will be taken shortly to change the way in which it advises the private sector in the United Kingdom and delivers its export promotional services. Instead of having area advisory groups that reflect the complex and diverse nature of our trading relationships, it is likely that their special expertise will be dispensed with. This applies to groups covering all parts of the world as different as Eastern Europe, Israel, the Caribbean and Latin America. In their place, consideration is being given to amalgamating them all into a limited number of internal groups run by officials with priority and resources only being made available for those countries or sectors within the region that BTI considers to be of importance. So for area advisory groups, which are mainly drawn from small and medium-sized enterprises and whose members have personal experience in regions like the Caribbean, the future is very uncertain.

This means that the area advisory groups for the region about which I am most concerned—the Caribbean—will be merged with Latin America and North America into an Americas group. The prevailing BTI logic suggests that this single body will concentrate on the United States and Brazil. I understand that this approach will be mirrored in the way that resources are managed within BTI and that the level of attention given to the Caribbean by officials will be further diminished.

I am sure that the noble Lord, Lord McIntosh, understands that trade and investment are the cement of international relations. Any decision, no matter how pragmatic, that diminishes the attention given to a region such as the Caribbean will quickly result in a reduction of the importance of that region. I am surprised that this should happen when, by common consent, the region is very fragile and vulnerable as it transits out of its existing preferential arrangements for commodities such as bananas. Furthermore, I am sure that the noble Lord is aware of the great anxiety lest that transition should mean a replacement with something as difficult and unpleasant as the drugs trade.

Any decision to diminish the already weak profile of the Caribbean is particularly curious when I understand that as recently as last September the Prime Minister assured Commonwealth Caribbean heads of government attending the CHOGM conference that he recognised that the moment had come to find ways to renew the relationship with the Commonwealth Caribbean.

It is even more surprising that CARITAG may be merged into an Americas group when it is clear that the Commonwealth Caribbean heads of government are asking Britain to recognise their special regional identity. The British Government will host a Caribbean forum for Caribbean foreign Ministers in May of this year. I believe that this is intended to identify ways to renew and build a new relationship with Britain. How does all this fit together?

CARITAG's demise also brings into question the very special relationship with Cuba, referred to by the noble Lord, Lord Rea, that has enabled Britain to expand its dialogue with the Cuban Government through trade. Indeed, Ministers have recently made clear to this House the importance of our trade contacts with Cuba in enabling dialogue.

However, what concerns me most is that this is potentially—I hope that the noble Lord understands this point and I choose my words carefully—a foreign

policy disaster. Anyone who knows the region will be aware of the recent events over bananas, the WTO process in Seattle and the changed relationship with Europe which has left the Caribbean feeling sensitive and marginalised. Last year the Spanish Prime Minister visited the Caribbean and met Caribbean leaders. President Chirac will soon do the same. The Caribbean market, although small, purchases over a billion dollars' worth of goods from us each year. In the light of that, what sense does it make for Britain to save the £95,000 a year that it spends on CARITAG?

I should like the noble Lord, Lord McIntosh, to answer a number of questions. Can he say when the Government plan to reorganise the area advisory groups and when he will announce this? Have there been consultations with the Foreign Office and with our posts about the political and economic implications for the Caribbean? Do the Government intend to inform Caribbean governments of their decision? How does BTI intend to retain region-specific expertise on the Caribbean in its future deliberations? How does it intend to deliver Caribbean-related programmes for the community in the UK or Cuba?

I do not ask these questions to be difficult. I am very concerned about the Caribbean. This is an extremely serious situation and if the Minister cannot answer my specific questions tonight, perhaps he will be good enough to write to me.

7.49 p.m.

Lord Sharman

My Lords, I am grateful to the noble Baroness, Lady Hooper, for giving us the opportunity to discuss the review by British Trade International with particular reference to Latin America. From a personal point of view, I welcome that review. I found it useful, although I share her concern about the lack of information. I found it hard to find out about the review. However, once I discovered the website, I found that to be quite helpful.

From my perspective, I believe that consolidation of export and trade promotion into a single brand— "digitally available", to use the words of the website— is good. From bitter personal experience—I spent 11 years on the other side of the export effort overseas— the most confusing thing was the plethora of export promotion bodies that came through the front door asking for help. That left the local market places confused and unfocused.

I believe that the most encouraging aspect of the strategy which is outlined on the website is what I would describe as a move from the shotgun approach of export promotion to one of rifle shot. I regard that as particularly important in the context of Latin America. Latin America is easy to talk about, but it is not a homogeneous area, economically, geographically or culturally. It has three very large economies: Brazil, at 780 billion dollars in GDP—about half the size of the UK; Mexico, which everyone focuses on, with a GDP of approximately 400 billion dollars—somewhere between that of the Netherlands and India; and Argentina, at approximately 340 billion dollars—the size of Australia. At the other end of the spectrum is Guyana, with a GDP of 700 million dollars. The range is enormous. The cultural diversity is vast; the opportunities, I suggest, are limitless, but we must focus on them.

If looked at as an exporter, those economies in general have not been doing well. The combination of El Niño, the collapse of world commodity prices and the reduction in access to international capital markets on the back of the Asian crisis have caused them problems. Uncertainty in their cycle of presidential elections has made that worse. Although the forecasts are for that region to grow and for many of the economies to perform better, I believe that the issue is one of focus; it is one of selecting where to put our effort, and we might well look al. Mexico as an example.

Mexico, with its relationship with NAFTA, has border developments which competitor nations—particularly the Japanese—have not been slow to exploit. A whole series of manufacturing operations are being established along the Mexican border, which is seen as a base for access to the US market at a lower cost. That is allied to the presence in the region of what I believe to be a formidable competitor—the USA—not only in terms of its economic power but in its foreign direct investment into that area, which has been vast. The USA has an advantage in its cultural and heritage aspect, particularly with regard to Hispanic matters. That has given it an advantage over us when talking to the Hispanic nations there.

Perhaps more importantly, and not often realised, is the transport advantage which the USA has. While North American cities may well be an equal distance away, if one travels to Latin America, as frequently as I have done, one will find that frequently it is best to travel from one country to another by going via Miami. That is an advantage in economic terms.

I summarise, therefore, by encouraging the noble Lord, Lord McIntosh, to look at this issue through the sights of a rifle rather than over the barrel of a shotgun, remembering that at present the area accounts for approximately 1.9 per cent of our exports and approximately 1.6 per cent of our imports. We need to focus carefully with the best possible expertise on the areas that will yield us the best results. That is my view in economic terms. There are, of course, other foreign policy matters that need to be considered as well.

7.54 p.m.

Viscount Waverley

My Lords, many issues arise from the Question of the noble Baroness. So far as Latin America is concerned, we need to differentiate between investment and trade opportunities. On the one hand, Britain excels; on the other hand, we have not risen sufficiently to the challenge.

Realistic opportunities do abound with national economies prospering. But with global exports increasing, and with developing countries bringing an increase in competition, the United Kingdom simply cannot take a relaxed view, particularly when we hold many comparative advantages. We in this country are bad at harmonising national strategies that encompass public and private sectors. That needs to be overcome as an imperative. The French notably are far better than we are in this regard.

The private sector is in the ascendant in the United Kingdom, yet the public sector continues to interfere regularly with private sector goodwill endeavours. As chairman of a chamber of commerce, for example, I have had recent experience of high-handed intervention by a BTI official, who sought to undermine co-operation with a foreign chamber. Happily, an MOU was none the less subsequently signed, and it has already borne fruit.

As no or little government funding is forthcoming for innovative strategic marketing of services by the private sector, the Minister responsible should be careful not to erode the endeavours of the private sector, such as that that concerns the noble Baroness, Lady Hooper. That said, however, I welcome the spirit of the long overdue Wilson review and hope that Sir David Wright will address where the public sector contribution to export promotion begins and ends so as to allow others to make a much-needed contribution.

Sir Martin Laing's interim report has recommended combining the Americas, and that includes Canada and the Caribbean. With the exception of the Miami gateway factor, the United States is a long way removed from South America. In my view, care needs to be taken when considering the geographical split.

Whatever is finally agreed, the objects of organisations such as LATAG and, in the case of the Caribbean, CARITAG have a key role. On the broader front, the Institute of Export survey of international services provided to exporters confirmed that exporters are still unaware of the many excellent services available from government sources. The plethora of services available from a range of different official sources creates confusion, and so they are under-utilised. Government export support services should be more closely targeted, with better signposting and clearer branding of key services. The Wilson review appears to recognise that export promotion must become more customer-focused, more coherent and should be less diffuse. A clearly coherent strategy must succeed and without delay.

Beyond that, Sir David must maintain his customary pragmatic approach, but be supported with a comprehensive policy to export promotion. For example, in my mind, it serves little point to work hard in the national interest when a sometime key ingredient—ECGD—is unresponsive, with its often exasperating criteria for project support.

7.58 p.m.

Lord Luke

My Lords, first, I thank my noble friend Lady Hooper for giving us the opportunity to have this small but important debate. I shall not trouble your Lordships for long this evening, but I have had some small experience of both trading and living in Argentina. Aspects of the review by British Trade International which we are considering this evening give me cause for concern, although, of course, I support worthwhile and effective reform in this area.

Like earlier speakers, I wondered whether the "out-house" restructuring would mean merely desk-bound civil servants taking over jobs from businessmen to the detriment of the vital person-to-person contacts which smooth the way for trade. Those sometimes take years to build up, as we all know, and could so easily be inadvertently destroyed by lack of the right kind of background and knowledge.

It is important, for example, to realise that the phrase "Latin America" is not always helpful when describing countries that may be thousands of miles apart and that have individual characteristics, procedures and approaches. Taking the whole of the two great subcontinents together and calling them for trade purposes "The Americas" seems to me to be the same as lumping together China and Russia and calling them Asia, saying that we shall treat the whole area in the same way. I hope that is not true.

There are enormous opportunities for our businessmen in South America, particularly with Mercosur. We should change the second language taught in schools in this country to Spanish—not forgetting Portuguese, although I do not suggest that that should be the second language. We should make absolutely sure that bodies set up to help businessmen trade are composed of persons skilled in personal contacts. The customer must be served.

8 p.m.

Lord Desai

My Lords, we are grateful to the noble Baroness, Lady Hooper, for introducing this debate. Until I had read the material I would not have been aware of such great changes taking place. When she said that British Trade International did not make a splash, that is an understatement. Given a title like that I would be surprised if anybody noticed it.

I want to make a couple of points about the report and then to talk specifically about Latin America. The report is an example of people wanting to rationalise everything. The rationale for doing so, in the way that I read the report, has not been made. The survey showed that the level of customer satisfaction was high, although I agree that in the case of Latin America only one out of 17 people replied. By and large, customer satisfaction was high. We also see that not much money is being spent on this and that very little is being wasted.

Compared with an in-house group, an out-house group means that one can have flexible strategies and that people can be co-opted as and when one likes. I am sure that an in-house group would cost more money, would be less flexible and would not do such a good job. One of the oldest lessons learned in economics is how to use local knowledge. One has to decentralise, to take advantage of the private sector initiative and not put everything into administration.

Given that background, I would not have chosen the umbrella approach but a matrix approach which would not have meant aggregating all the Americas into one lump. They could have had a matrix of countries by sectors or by markets and therefore one could pick up a combination of countries and markets rather than having this peculiar umbrella approach.

If it is not too late and if the co-operation and expertise of the private sector can be retained, given that it is not onerously expensive, I believe that that should be done. It is also the case that a variety of opportunities will arise, not necessarily in the narrowly defined trade areas but in other areas, including healthcare, as mentioned by the noble Baroness. I know that a lot of municipal water schemes, in which Britain has great expertise, are being launched. I believe that in the near future water will become a big investment area.

I believe that an out-house agency can take advantage of university expertise, but that is not mentioned in the report. All those area groups ought to liaise with the tremendous expertise that our universities have in relation to these regions. We have people who have absorbed the details of the regions over many years. That is an under-utilised resource. I say that as an academic. I know that the Institute of Latin American Studies at London University would be a good source for expertise, as would Oxford and Cambridge. I do not want to be parochial. That can be done by an out-house agency. For an in-house agency it would be difficult because it would have to go through DfEE or the like and it would become too complicated. At the end of the day, I hope that whatever happens, trade grows rather than decreases.

8.5 p.m.

Baroness Buscombe

My Lords, I congratulate my noble friend Lady Hooper on raising this important Question.

I am always pleased to see the noble Lord, Lord McIntosh of Haringey, however I am sorry that the Minister for Science at the Department of Trade and Industry, the noble Lord, Lord Sainsbury, is not in his place to respond to specific concerns raised this evening.

In considering the Question before us it is helpful to remind ourselves of the criteria used by the Wilson review for determining the preferred option for structural change for the delivery of export promotion. They are as follows. Would any proposed arrangements be clearer to potential exporters? Would a new structure be more accessible than the present arrangements to customers? Would any new structure deliver services, including market information to clients more quickly? Would a new structure have clearer leadership with the necessary clout with Ministers and customers? Would a new structure deliver the export forum recommendations more effectively? Would a new structure be better placed to change schemes and services when appropriate and be better placed to take speedy actions? Would a new structure improve and strengthen linkages between front-end delivery and the centre? Would a new structure strengthen links between export promotion and trade and inward investment policy?

British Trade International was formed with a view to meeting those criteria and it is now looking to the role of the business advisory groups within its remit. Clearly there is considerable concern with regard to the future of such groups and a fear that decisions—important decisions—that will necessarily impact upon the ability of British Trade International to perform its role in the promotion of trade are being taken too quickly and without sufficient consultation with interested bodies that are working in the area. We have been told that there is to be a single Americas committee—one of four world-wide—catering for all market needs in that region and that committee will advise on both regional and sector issues so that a number of existing area advisory groups will cease to exist.

The knock-on effect of that would, in practice, be to focus upon the larger, more established markets or economies of, for example, Brazil and Mexico. Of course, Mexico already has the advantage of being a member of NAFTA. That would take place at the expense of smaller economies such as Bolivia, Paraguay, Equador and Columbia. In addition, the promotional and developmental work carried out by outhouse groups such as LATAG and CARITAG will be lost. Given that the proposed Americas committee will include within its remit the USA, the Caribbean, Canada and South America, it is hard to envisage proper emphasis being placed upon any other than the dominant economies.

We are also informed that if all or most of the current so-called outhouse groups are brought inhouse they will be run or managed by civil servants as opposed to commercially-minded businessmen with skills and experience pertinent to their geographical or sector area. There is no question that businessmen prefer to do business with fellow businessmen and there is a concern that that culture will be lost. We would welcome the Government's response to such concerns.

On a positive note I want to make it clear that, having consulted with representatives from a small number of business sectors with interests in South America, there is no doubt that some broadly welcome the concept of British Trade International. I offer as an example the motor sport performance engineering sector. That is a small sector with an overall turnover of approximately £2 billion per annum. However, it is highly influential in the global automotive marketplace. It is a flagship sector that punches above its weight and one that has found British Trade International helpful and resourceful. Their trade association representative has spoken of British Trade International having clarity of brand and marketing, making its support services for their customers accessible, user-friendly and, therefore, effective. However, I should add that this positive experience relates to a relatively large established economy in South America; namely. Brazil.

Ultimately, of course, our interest must be to view its delivery of services through the eyes of the customer. That delivery must depend on how its resources are focused. Can it work for the small economies as well as established economies? Is it, the aim of government to develop a service which is sector-focused and/or regionally focused? I like the idea of the noble Lord, Lord Desai, when he makes reference to a matrix. Surely it should be possible for us to consider a more sophisticated approach now, whereby we drive our focus towards sectors as opposed to geography.

Can a grouping such as the Americas committee honestly deliver with such a broad remit for such a diverse group of countries, both commercially and culturally? We are considering a very important mix of economies with numerous diverse emerging markets. Therefore, I repeat the plea of my noble friend Lady Hooper who is asking that we ensure that vital and growing markets remain as accessible and open to British trade and commerce as they are now.

In considering the future of the advisory groups, I would ask the Minister to look again at the criterion originally set for effective export promotion by the Wilson review—to which I have already referred this evening—and to consider whether the proposed changes to the British advisory groups will protect and enhance the trading interests of all affected countries, including vulnerable countries such as the Caribbean and Cuba.

Perhaps I may also reiterate the deep concern articulated by my noble friend Lady Young regarding the future of the Caribbean. I hope that her concerns will be seriously considered as decisions are taken, remembering that trade promotions should not be considered in a vacuum without proper regard for the bigger picture, and that must include the cultural and political stability of each country.

Lord McIntosh of Haringey

My Lords, the Government also are grateful to the noble Baroness, Lady Hooper, for introducing this debate. I must say that she timed it extremely well. It is quite clear that a number of your Lordships have concerns about the nature of the review which is taking place of our export promotion activities, particularly in Latin America and in the Caribbean. It is proper that those concerns should be expressed and should be available to Sir Martin Laing and of course in the end to the Board of British Trade International which is to consider his final report which will be submitted to them at the end of March this year.

I apologise for my noble friend Lord Sainsbury who was unable to take this debate. I assure noble Lords that he does not have specific responsibility within the department either for trade or Latin America. If he did, I might not be here. This is particularly so since my qualifications for taking part in this debate are negative rather than positive. My contact with Latin America and the Caribbean has been as an organiser of trade missions to a number of places there; in particular, Panama, Mexico and Guatemala, but on behalf of the European Commission. It felt guilty about the advantages given to the Lomé Convention countries, and wanted to organise trade missions from Europe, which I organised for it, to encourage exporters from those countries to sell to Europe. So we were taking groups of importers from Europe, perhaps it might be said, in conflict with what noble Lords' expertise is. I do not think so. I think it has to work in both directions. So I hope that my experience has been helpful to me in thinking about the issues raised in the debate today.

Certainly, from the point of view of the Government, our trade relationships with Latin America are an important subject for the House to consider. Over the past decade the region has emerged as a growing force on the world stage, not only economically, but also politically. But, as the noble Lord, Lord Sharman, said, there are still many problems despite the political and economic reforms and the historic co-operation between countries in the region which forced the rest of the world to take notice of Latin America, perhaps in an unprecedented way.

This is particularly true on the trade and economic front where Latin American countries have been at the forefront of trade liberalisation moves. It is now widely accepted that countries in Latin America are natural trading partners for other liberal economies. Our support for this process helped to forge last year a free trade agreement with Mexico and the EU. It is also helping to move forward discussions on agreements with Mercosur and Chile. The Government intend to continue playing a full part in ensuring that British business takes every advantage of the enormous opportunities for trade, investment and business partnership with Latin America.

I pay tribute to the noble Baroness, Lady Hooper, and other noble Lords for their contributions over many years to the fostering of closer relations between the United Kingdom and the countries of Latin America. Although strictly speaking the Caribbean is not the subject of the debate, I pay comparable tribute, in particular, to the noble Baroness, Lady Young, and to all who worked with her in CARITAG. I do not shy away from discussing the Caribbean just because it was not part of the original subject of this evening's Question.

All parts of the United Kingdom, and countless organisations and enterprises in the private sector, have been responding to this challenge. As well as the many missions sponsored each year by British Trade International with private sector organisers, others have been promoted by agencies in Scotland, Wales and Northern Ireland, invariably in collaboration with British Trade International. I entirely agree with what noble Lords have said, notably my noble friends Lord Rea and Lord Luke, that personal contact is absolutely essential if we are going to make progress in this area. There has not been any falling off in ministerial visits. I do not have the full list, but my noble friend Lord Clinton-Davis, when he was Minister of Trade, made two visits in one year to Latin America as part of a punishing schedule. Indeed, sadly, it was a schedule which has punished him.

I return to Latin America. A central role in this process has been played by Canning House, of which the noble Baroness, Lady Hooper, is the current president. I also pay tribute to Lord Montgomery and Lord Limerick who are no longer with us, but who are past presidents of Canning House, and of course the Latin America Trade Advisory Group, which originally emerged from it and whose work was so well described by the noble Baroness, Lady Hooper. Especially in the bleak 1980s—the so-called "lost decade"—when for so many Latin America appeared to be a lost cause, those two organisations helped to keep interest alive in this country.

When Latin America so impressively re-emerged during the 1990s, those two organisations played an important role in supporting the government in developing a closer relationship with Latin America. I thank them both, and all Members of this House associated with them. I would extend those thanks to those who have supported CARITAG. But I know that both of them, while preserving our history, also look forward to the future. We must do as much as we can to ensure that our businesses are well equipped for the task ahead. That means ensuring that the support and promotional services provided by the Government are the best available and meet the needs of business. The words of the noble Lord, Lord Sharman, on this issue were very wise. Not being very knowledgeable about guns I am not sure that I follow the metaphors about the "shotgun" or "rifle" approach, because I really do not know what they do. However, I think that someone is trying to tell me something.

Just as Britain has been forging a new relationship with Latin America for the future, so the Government have been examining ways of improving our services to exporters, as well as looking at ways of using our resources more effectively. I want to emphasise that we have done that all the time in close collaboration with business itself as we have been determined to ensure that in all we do we focus above all on customer needs. The process started in 1997 when the Government set up the Export Forum to assess the effectiveness of current arrangements with particular emphasis, as was identified by the noble Lord, Lord Sharman, on the recommendations which addressed weaknesses which were seen to reduce the effectiveness of the Government's overseas trade services. They included the need for a greater customer focus and more defined market priorities with a greater emphasis on sectors and outward investment.

A number of noble Lords seemed to feel that the Wilson review received poor publicity. The noble Baroness, Lady Hooper, in particular said that it was not well known. When we look at the 24-page list of contributors to the review it is obvious that, whether or not they read the review to which they contributed, they knew it was taking place and must have received copies of it when it was concluded. It seemed to me to be a comprehensive list of everybody who might conceivably be interested in the review's outcome. That resulted in the setting up last year of British Trade International which brought together the trade promotion activities of the DTI and the Foreign and Commonwealth Office (through its post overseas) in a unified operation under a chief executive, reporting to a board drawn predominantly from the private sector. That is why I do not understand the comments of the noble Lord, Lord Luke, and the noble Baroness, Lady Buscombe, that somehow it is an organisation driven by civil servants. It consists largely of export promoters, development counsellors, as well as hundreds of commercial officers overseas, all of whom have direct links with the markets in which they are located. The emphasis was always on developing a more coherent approach with an overriding customer and sector focus combined with a shift towards trade development; that is, helping companies—particularly smaller companies to which reference has been made—to develop their capacity and ability to tackle overseas markets. It is not a bureaucratic organisation. It is a commercial organisation driven by business and the private sector. It has achieved a great deal in a short time.

Baroness Buscombe

My Lords, perhaps the Minister will allow me to intervene to say that I obviously did not make myself clear, was saying that we have been informed that if the advisory groups were brought in-house, they would be managed by civil servants as opposed to people from the business sector.

Lord McIntosh of Haringey

My Lords, we must draw a distinction as regards a secretariat. It does not matter enormously who employs the secretariat; the secretariat of LATAG has the status of home civil servants. That does not mean that they necessarily behave like civil servants even if that were a bad thing to do, which I cannot accept when I look around me. Let me assure your Lordships that it is all business-driven.

The Wilson Report then recommended that the board of BTI should review the present structure and role of the business advisory groups involved in providing advice and in carrying out promotional activities. When I heard the list of questions about the new structure which the noble Baroness, Lady Buscombe, asked, I felt sure that I could assure her that all of those were part of the remit of the review which Sir Martin Laing, the vice-chairman of the board, agreed to undertake. The report has been made available in draft to all advisory groups and has been placed in the Printed Paper Office. It is a research-based report which goes into enormous detail. It includes all the considerations which noble Lords quite rightly demanded that it should.

If I may anticipate my response to the noble Baroness, Lady Young—of course, I shall write to her in detail about each of her questions in turn—I found myself nodding each time she raised an issue because I was confident that, when she talks about for example consultation with the Foreign Office, with Caribbean governments and ensuring that there is expertise in the region, they have all been taken fully into account. We cannot therefore be accused, as my noble friend Lord Desai accused us, of having an "umbrella" approach.

Work is continuing on the options for a revised advisory structure which will result in a more focused activity by advisory groups. But I must stress that no decisions have yet been taken on the future of out-housed secretariats such as LATAG and CARITAG, despite the implication in some of the contributions this evening. That is why I repeat that this is a well-timed debate. It gives an opportunity for what noble Lords say to be taken into account in the final decisions which the board will be taking.

Full account will be taken of the contribution that out-housed secretariats can make to the delivery of British Trade International's objectives as well as other considerations such as efficiency and value for money. However, I must emphasise that it is not money-led. The £95,000 cost of CARITAG is hardly a sufficient justification for saving a few thousand here or there for what the noble Baroness, Lady Young—I believe wrongly—described as a potential foreign policy disaster. I can assure noble Lords that their views will be given full weight before the final recommendations go to the board and by the board itself in considering the issues debated this evening.

Meanwhile, whatever the outcome of the review and while it is still in progress, the Government have every intention of continuing with their task of promoting trade with Latin America and the Caribbean. The Minister for Trade, Dick Caborn, launched a three-year promotional campaign last month to assist British companies to develop their business in Mexico. We are in the second year of a similar initiative in Brazil and Mercosur. There are plans to mount a millennium products exhibition this year in several Latin American countries, including Argentina, Brazil and Mexico accompanied by other events seeking to promote Britain as a country at the leading edge of technology, design and innovation. Throughout the region there will continue to be a full programme of supported trade fairs and trade missions which will take many companies into those markets.

I hope that I have reassured noble Lords that we place high importance on our trade with Latin America and indeed with the Caribbean and will not rashly take any steps which would put that at risk.