HC Deb 23 June 1982 vol 26 cc142-4W
Mr. Rathbone

asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the outcome of the Foreign Affairs Council on 20 to 22 June.

Mr. Hurd

My right hon. Friend gave the House yesterday an account of the main discussions which took place while he was present.—[Vol. 26, c. 155] The following is an account of the discussions on the remainder of the very full agenda during which, after his departure, we were represented by my hon. Friend the Financial Secretary to the Treasury, my hon. and learned Friend the Minister for Trade and our Permanent Representative to the Community, Sir Michael Butler.

Foreign Ministers of the Ten had a useful meeting with the Foreign Ministers of Spain and Portugal for an exchange of views on political co-operation matters. In later discussions progress was also made in the accession negotiations with both the Spaniards and the Portuguese. There was a ministerial conference with the Portuguese in the margins of the Council on 22 June. The Community presented declarations on Customs union, ECSC, taxation, external relations, tariff transitional period and rights of establishment. Progress was made in discussions with the Portuguese on aspects of the taxation dossiers, on Customs union—tariff transitional period—and rights of establishment—direct investment and banking. There was also a ministerial conference with the Spaniards on 22 June. The Community presented declarations on taxation, ECSC, Customs union, tariff transitional period and external relations.

My hon. Friend the Financial Secretary attended the Council for discussion of a draft agreement between the Council, Parliament and Commission on budgetary procedure. After consideration within the Council there was a meeting on 22 June with a delegation from the Parliament. The aim of these talks is to reach an agreed interpretation of the Treaty provisions defining the budgetary powers of the institutions. Several delegations in the Council, including the United Kingdom, maintained reservations about parts of the draft text, and it was agreed that the Council would postpone a decision on it until 30 June.

Ministers agreed to instruct officials to reach agreement before the next Foreign Affairs Council on a resolution giving effect to the 24–25 May agreement on budget refunds to the United Kingdom in respect of 1982.

On the question of aid to Central America the Council agreed that the Commission's proposals should be examined at working level with the objective of enabling the Council to reach a decision in July. The Council also agreed that the Commission should write to the Governments of Angola and Mozambique setting out the conditions of Community aid to them.

The Community's trade regimes with Malta and Cyprus were discussed. The Council agreed that the existing trade regime with Malta should again be extended autonomously from 1 July and that the Commission should submit proposals for a further autonomous extension from 1 July of the existing trade regime with Cyprus.

The Council heard a statement by the Commission outlining their thinking on preparation of the Community's position for the GATT ministerial meeting—23 to 26 November. It was agreed that detailed proposals would be put forward in time for substantive discussion at the next meeting of the Council on 19 to 20 July.

Aid to Northern Ireland housing was also discussed. Despite support by the great majority of the Council agreement was blocked by the reservations of one member State. Efforts to achieve unanimity will, however, continue.

The Council discussed recent developments in relations with the United States and issued a statement, a copy of which will be placed in the Library of the House. This expresses grave concern at the imposition of provisional countervailing duties on European Community steel exports to the United States and states that the Community will, first, call an immediate meeting of the GATT subsidies committee to contest certain of the decisions by the United States Department of Commerce; secondly, that it will use the forthcoming meeting of the OECD steel committee to challenge the compatibility of United States action with the OECD consensus on steel; and, thirdly, that the Council would consider, at its next meeting, proposals by the Commission on the United States DISC system, a scheme which permits export subsidiaries of United States companies to defer indefinitely payment of certain tax liabilities and which the GATT has found must be regarded as an export subsidy. The Council's statement also rejects as unacceptable the claim to extra-territorial jurisdiction implicit in the United States Administration's decision to make overseas subsidiaries and licensees of United States companies subject to restrictions on the export of oil and gas equipment to the Union of Soviet Socialist Republics. In conclusion it expresses the Council's deep regret at the unilateral nature of the United States response to both problems and calls for action at the highest levels to find solutions.