§ Mr. Alfred Morris
To ask the Prime Minister if the European Commission's decision on 19 July to raise export restitutions on dairy products is consistent with the agreement reached on 11 July at the economic summit in Houston; and if she will make a statement.
§ The Prime Minister
The Commission maintains that the action it has taken does not contravene agreements reached in the GATT international dairy arrangement on minimum export prices. The increase in export refunds is nevertheless likely to be unhelpful in the context of the current Uruguay round negotiations. The Commission took its decision without consulting member states. We had, however, made clear on earlier occasions that we were opposed to any increase in export refunds in the dairy sector at this time. We also opposed the 1 per cent. increase in milk quota agreed towards the end of last year, because, although it was helpful to many producers in the short term, it was bound to worsen the Community's existing problem of overproduction.