Venice Summit (Hansard, 1 July 1987)

§ Sir Geoffrey Howe

I accompanied my right hon. Friends the Prime Minister and the Chancellor of the Exchequer to the economic summit held in Venice from 8 to 10 June. Copies of the statements issued at the summit have been placed in the Library of the House.

This was the ninth summit I have attended, and was a very businesslike and successful meeting. It dealt with seven principal issues: economic policy, trade and protectionism, agriculture, developing countries and debt, East-West relations, terrorism and Iran-Iraq.

On economic policy, we acknowledged the positive developments over the past year. Growth has continued into its fifth year, inflation continues to fall, interest rates are generally declining, and exchange rates have reached more appropriate levels. But we recognised that the world economy still faced a number of challenges: large external imbalances, continued high unemployment, large public sector deficits, and interest rates that are still too high in real terms. We welcomed the clear undertakings by both surplus and deficit countries to reduce imbalances and the agreement recorded in the economic declaration on strengthened arrangements for multilateral surveillance and greater co-ordination of our economic policies to strengthen the world economy. We also agreed to continue to co-operate closely to foster stability of exchange rates.

We noted with concern rising protectionist pressures, and reaffirmed our commitment to maintaining and strengthening the multilateral open trading system through the Uruguay round of the GATT. We agreed to table a wide range of substantive proposals in Geneva over the coming months. Progress in the Uruguay round will be kept under close political review. We regarded a strong credible GATT as essential to the well-being of all trading nations, and the best defence against mounting protectionist pressures.

Building on the agreements reached at Tokyo last year and in particular at the OECD ministerial in May, we gave a clear commitment to work together to adjust agricultural policies in the light of world demand, both at home and trhough comprehensive negotiations in the Uruguay round. We also agreed to refrain in the meantime from actions which would worsen the negotiating climate and damage trade relations.

The amount of time that we devoted to discussing the problems of developing countries, in particular debt, reflects the importance that we and all summit countries attach to the economic progress and stability of those countries. While underlining the continuing appropriateness of the case by case strategy, with its central roles for the IMF and World Bank, we recognised that the problems of sub-Saharan Africa were unique and deserved special treatment. The Chancellor's initiative for granting debt relief to those of the poorest developing countries undertaking adjustment efforts was given broad support, and we welcomed the proposal by the managing director of the IMF to increase substantially the resources of the structural adjustment facility, which lends on very concessional terms to the poorest countries.

Statements were made on various political issues.

On East-West relations, we reaffirmed our commitment to peace and security at lower levels of arms, noting with 110W satisfaction that the dialogue on arms control had intensified. We sought to encourage political solutions to regional conflicts, to secure improvements in human rights and to build confidence and trust between governments and peoples.

Building on the initiative we launched at Bonn in 1985, we issued a strong statement on terrorism, reiterating our belief that, whatever its motives, it had no justification. We welcomed the progress made in international co-operation against terrorism, and in particular the initiative taken by France and Germany to convene a ministerial meeting earlier this year.

We also urged the earliest possible negotiated end to the war between Iran and Iraq, both of whom have suffered grievously from this long and tragic conflict.

I should like to pay a warm tribute to the skilful and effective chairmanship of the Italian President of. the Council of Ministers, Signor Fanfani, and to the Italian Government for their excellent arrangements.

The United Kingdom played its full part in achieving a successful summit which has further strengthened our countries' determination to work closely together for the common good.