HC Deb 22 February 1979 vol 963 cc259-61W
Mr. Jim Callaghan

asked the Secretary of State for Trade if he will make a statement on the outcome of the discussions on civil aviation and shipping at the Transport Ministers Council on 20 February.

Mr. John

Smith: The principal item on the agenda was the question of a Community position on the UN code of conduct for liner conferences. Substantial progress was made on the basis of a helpful set of compromise proposals from the Presidency and the Commission. But it was not possible to reach final agreement.

The compromise proposals would open the way for all member States to become contracting parties to the code subject to certain reservations and understandings.

The United Kingdom has been particularly concerned to preserve a commercially competitive environment for conferences operating between the OECD countries. The Community has in large measure accepted this aim. The code would, of course, not apply at all where the OECD trading partner was not a contracting party. Where it was, under the compromise proposals, EEC member States would, subject to two caveats, dis- apply the code's cargo-sharing provisions and certain other of the code's rigid features. The two caveats are that the OECD trading partner should reciprocate this disapplication; and that there should be no prejudice to the possibility of participation in such conferences by national lines of developing countries in accordance with the principles reflected in the relevant part of the code.

In trades between the EEC and developing countries, the lines of developing countries which are parties to the code would enjoy full codist rights. The EEC lines would place their shares of these trades into a central pot which would then be distributed according to commercial rather than codist criteria. But the final decision on this distribution of cargoes would have to be unanimous with a view to each line carrying a fair share of the conference trade. This commercial distribution process in codist trades with developing countries would be open to the lines of other OECD countries on a basis of reciprocity.

The compromise proposals also envisage that the Community would urge other OECD countries considering accession to the code to adopt the Community arrangements as a model.

It was not possible to reach final agreement on this package at the 20 February Council. Denmark drew attention to the importance of taking into account the views of other OECD countries, especially the USA and Japan, before taking a final view. We understand and share its concern. Italy was unwilling to accept the commercial distribution arrangements for the codist trades with developing countries without a political declaration indicating that the national lines of each member State would not be expected to suffer a substantial reduction in their codist shares. It was generally felt in the Council that this would defeat the scheme's objectives. The Italian Minister was invited to reconsider the position with his Government colleagues in Rome. The Commission will mean-while make contact with the USA and Japan as well as Italy.

I still hope that we can soon achieve a Community position on this important shipping issue. There are likely to be further discussions at Council level in early March.

The Transport Council also considered a draft directive on aircraft noise and a draft decision on ship inspections. The United Kingdom maintained a reserve on both these Community instruments pending further consideration of the implications for Community competence.