LINER CONFERENCES: EEC DRAFT REGULATION (Hansard, 20 February 1979)

§ Lord JACQUES

The Parliamentary Under-Secretary of State for Companies, Aviation and Shipping has received the following letter from Lord TrevelyanSub-Committee B were grateful for the supplementary memorandum you submitted on the above proposal, describing developments since the Select Committee's report in May 1978. They have authorised me to write to you describing the Sub-Committee's views on these matters, in accordance with our procedure for second stage scrutiny. The United Nations Convention has been drawn up with a view to enabling the developing countries to play a fuller part in world liner trade. This is in accordance with the policy of the United Kingdom Government. Moreover, it is desirable that an international agreement should be reached, in order to prevent the unfavourable consequences of a failure to regulate the liner trade by agreement. But it is essential that the interests of the British shipping industry should not be unfairly harmed by any such agreement. The Sub-Committee consider that the revisions to the Commission's proposals since May 1978 have gone some way to satisfying the third criterion. But they remain very concerned that accession to the UN Convention, even if it would be of benefit to the developing countries, might lead to a damaging loss of trade and employment in shipping in the United Kingdom. The Sub-Committee agree with the Government that a distinction needs to be made between liner trade with developing countries and with OECD countries. They believe that the interests of the United Kingdom would be best served if the cargo-sharing provisions of the UN Convention were withheld not simply from trade between developed countries carried by OECD shipping lines, but from all trade between OECD states irrespective of the nationality of the lines involved. This would require a further modification of Article 4 of the draft Regulation. However, you will doubtless be considering whether a modification on these lines can be made in such a way as to take some account of the developing countries' liner trade. 1807WA The Sub-Committee welcome the fact that the Commission's original suggestion on the means of extending the commercial criteria of Article 3 to trade with other OECD countries has been modified in a more realistic manner. However, it is obviously a matter of judgment to what extent the reciprocity from other OECD countries proposed in the new Article 4(2) will actually be achieved. In their report in 1978, the Select Committee stated that the commercial criteria of Article 3 required further elaboration. Sub-Committee B note that this has to some extent been done in the revised Article 3, and they believe that the revisions should be more acceptable to the shipping industry and to British shippers. Finally, the Sub-Committee agree with the Government that as proposals applying the competition rules of the Treaty of Rome to sea transport have been seriously delayed, it would not be justifiable to prevent a decision on the Commission's liner conference proposals for this reason alone. Subject to the important qualification of protecting United Kingdom interests, they believe that agreement within the Community on the UN Code of Conduct is desirable, and hope that the Government may be able to negotiate an acceptable compromise".

The Parliamentary Under-Secretary of State has thanked Lord Trevelyan and Sub-Committee B for their comments, and has said that they will be taken into account during the forthcoming negotiations within the Community.