HL Deb 08 April 1975 vol 359 cc74-5WA
Lord O'HAGAN

asked Her Majesty's Government:

To what extent EFTA prevents its members operating State aids that distort competition.

Lord WINTERBOTTOM

There is an absolute prohibition in EFTA on eight specified Government aids on exports of goods to other member-States. These are listed in Annex C of the Stockholm Convention and include direct subsidies to exporters, the direct remission of taxes on enterprises, and offers of export credit and insurance facilities at lower than normal rates. In addition the use of any forms of aid (unspecified) which frustrates the benefits expected from duty-free and quota-free trade are also prescribed.

I understand that while the objective has been to ensure that Government aids do not constitute trade barriers or pro-mote unfair conditions of competition between member-States, there has never been indicated any intention to inhibit the freedom of member-States to introduce compatible measures as elements of internal economic policies.

A procedure is laid down for examining claims of frustration of benefits conferred by the Stockholm Convention.