EU "Everything but Arms" Initiative (Hansard, 28 November 2000)

§ The Minister for Science, Department of Trade and Industry (Lord Sainsbury of Turville)
My Lords, the proposal concerns the treatment of some 13,600 products from the 48 least developed countries in the world, 39 of which are also ACP countries. The European Commission's proposals should benefit these ACP countries and their exports, as well as the nine LDCs that are not ACP countries.
The Commission has recognised the sensitive nature of three products—rice, bananas and sugar—by proposing that duty-free access for them should be phased in progressively over three years. At the request of member states, including the UK, the Commission is currently looking at the various impacts that the proposals could have. Discussions are continuing in Brussels. The Government have launched their own written and electronic consultation and are producing their own analysis. The Government support the proposal. The ACP countries have also welcomed it, while calling for its impact to be studied.

Baroness Young
My Lords, I hope that the Minister will forgive me if I do not have the usual courtesy to thank him for that Answer. It is, if I may say so, very complacent about an extremely serious situation for the countries of the Caribbean. If those countries are unable to export their basic commodities, they will turn to drugs. The ACP countries signed the Cotonou agreement in July, under which the transitional period would extend until 2008. The new initiative overrides that, thus breaking a freely entered into negotiated agreement. Does the Minister think that this is the right way to proceed?

§ Lord Sainsbury of Turville
My Lords, I do not think my Answer was at all complacent. We are well aware of the great importance of these proposals to all the people affected—not only Caribbean producers, but farmers and processors in this country and in the LDCs involved. It is important to realise that we are talking about countries with an average income per head of 200 dollars a year. That level of income makes even the Caribbean countries look very wealthy. I am not at all complacent. The Government will take account of all interests in their response. I do not agree that it is obvious what the impact will be. It depends critically on the supply response from the LDCs, which is not at all clear given that they are net importers of sugar. As to the final point raised by the noble Baroness in regard to the Cotonou agreement, I am sure she is well aware that in Article 37(9) it is anticipated that by 2000 the Community will start a process which, by 2005 at the latest, will allow duty-free access for essentially all products from all LDCs, building on the level of existing trade provisions of the fourth ACP-EC convention. That was anticipated in the agreement.

§ Lord Palmer
My Lords, what plans are there to encourage ACP farmers to diversify into non-drug-related crops?

§ Lord Sainsbury of Turville
My Lords, the Government's position is clear. We shall await the 1245 outcome of the impact studies and the action taken as a result. We shall then look at the consequences which flow from that and decide what action should be taken.

§ Lord Faulkner of Worcester
My Lords, I declare an interest as vice-chairman of the British-Caribbean Parliamentary Group. Perhaps I may refer the Minister to the points made by the noble Baroness, Lady Young, about the effect of the proposals on the Caribbean. Has he seen the comments of the Guyanan Foreign Minister, who says that the proposals are virtually a knock-out blow which Guyana cannot sustain? If the proposals go through, it will effectively become impossible for Guyana to export rice, sugar and rum. As those commodities account for 44 per cent of Guyana's total exports, this will force Guyana into becoming one of the poorest countries in the world. Can my noble friend give some assurance that the interests of the Caribbean will be properly looked after?

§ Lord Sainsbury of Turville
My Lords, I hope I have made it clear that consideration of the interests of the Caribbean islands is foremost in the Government's mind. May I also remind my noble friend of the point I made in my original Answer. The impact of this will critically depend on what the supply response is from these very poor countries, which, as I said, are themselves importers of sugar.

§ Baroness Trumpington
My Lords, is the Minister surprised that I was surprised by his original Answer when he said that these new measures were welcomed by the Caribbean countries? That is not at all the situation. I back up entirely what his noble friend Lord Faulkner said. Is not the Minister aware of the very serious situation facing the Caribbean countries in regard to their primary products of bananas, sugar, rice and rum, which will be devastated by the "Everything but Arms" initiative? It will also have an effect on sugar beet producers in this country. Is he really not aware of the existing situation?

§ Lord Sainsbury of Turville
My Lords, I hope that I referred to the ACP countries, which are spread far wider than the Caribbean islands and include many other countries. They welcomed the proposal but wanted to see its impact. We are conscious of the potential impact on the Caribbean islands. We all know that they have suffered serious consequences on crops such as bananas—which are crucial to their economies—and obviously any further blow would be very serious. But I should emphasise that that will depend on the response to opening up the EU market to the other countries.

§ Lord Tomlinson
My Lords, is my noble friend aware that a report from the European Union Select Committee of this House on the workings of the WTO was somewhat critical of the ACP agreement, which spoke about "essentially all goods" in the context of free trade, and advocated that it should refer to "all goods"? That is the broad position taken in this House.
1246 Does my noble friend agree that the Cotonou agreement requires extensive consultation with those countries that are adversely affected? Does he further agree that that should include the Caribbean; and that there should be a willingness to negotiate transitional times and arrangements—not necessarily of long duration but in order to mitigate the worst effects?

§ Lord Sainsbury of Turville
Yes, my Lords. Clearly, consultation is extremely important. I remind my noble friend that it is part of the proposals that they should be progressively phased in over three years. That takes in the point that he raised.

§ Baroness Strange
My Lords, is the Minister aware that I always buy Commonwealth bananas, particularly Caribbean bananas? I hope that all other noble Lords do the same.

§ Lord Sainsbury of Turville
My Lords, I have to admit that I was not aware of that fact, but I am now better informed! I join with the noble Baroness in her appeal to other noble Lords.