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Eec (Acp Countries)

Volume 885: debated on Monday 3 February 1975

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With permission, I would like to make a statement on the conclusion of the Protocol 22 negotiations between the Community and 46 developing countries in Africa, the Caribbean and the Pacific, in which, as my right hon. Friend the Minister of Agriculture, Fisheries and Food has just told us, the sugar negotiations had a vital rôle to play.

I told the House in my statement on 31st July, after the conference in Kingston, Jamaica, that a major concern to us was the need to safeguard the interests of the Commonwealth countries concerned. I am glad to be able to report that I believe that our joint British and Commonwealth efforts have succeeded. In Brussels on Saturday morning we agreed the text of a convention which, after submission to African, Caribbean and Pacific Ministers in Accra on 11th February, will be signed in Lomé, the capital of Togo, on 28th February.

The agreement has rightly been described as historic. In its detail, it embodies a new economic relationship between the developing countries concerned and the industrialised nations of the Community. It is my hope that it may, in the longer term, contribute towards a new international order in the relationships between industrialised and developing countries, for example, in influencing the conclusions of the United Nations Conference on Trade and Development next year.

The agreement provides for the free entry into the Community market of industrial products, and almost complete free entry for agricultural products from the developing countries. I need not say more about sugar, but I should mention particular points of concern to Commonwealth countries which have been satisfactorily resolved—beef, which is important to Botswana, Swaziland and Kenya, and bananas and white rum, which are important to the countries of the Caribbean.

A most important new element in this convention is that there is no requirement for reciprocity, except a provision for at least most favoured nation treatment to Community exports in the mar kets of the countries of Africa, the Caribbean and the Pacific. The Community has thus taken a valuable major step away from the requirement for reverse preferences which was built into the previous convention, and towards the kind of trade relations for which UNCTAD has called.

A further most important innovation, for which the groundwork was laid in Kingston, is the new scheme of stabilisation of export earnings for commodities. It will cover such commodities as cocoa, coffee, cotton and copra, and one, but only one, mineral, iron ore. This scheme was one to which the developing countries attached very great importance.

In relation to aid, the Community offer of approximately £1,600 million—including payments on commodity stabilisation—plus a further £200 million of softened loans from the European Investment Bank, has been accepted by the ACP countries, although it is less than they would have wished. They made it clear, however, that they regarded development as being essentially a matter for them, and that they did not wish to bargain on the figure.

I am glad to report that on one major question of great concern to the ACP countries—the title of the new convention—it was possible to reach agreement. The concept of association is to be dropped. The new convention will simply be known as the ACP/EEC Convention of Lomé. To some extent, this is a symbolic change. But it reflects a new relationship, which replaces paternalism by co-operation. I cannot pay enough tribute to the rôle which our Commonwealth countries and their negotiators have played in securing this. I have been very glad to be able to understand and support them in so much that they were seeking to achieve. I would also like to express my own personal warm appreciation of the steady and consistent contribution made by Sir Michael Palliser and his staff in securing such a successful outcome to these negotiations.

There are, of course, many details of the new convention which the House will wish to know. I propose as soon as possible to make the text available to the House.

As far as British renegotiation objectives are concerned, the situation, following the agreement in Brussels on Saturday, is that a great deal will now depend on a successful conclusion to the meeting of Development Ministers to be held in March, when I will be seeking to ensure that Commonwealth and other developing countries not covered by the convention should receive their due share of EEC aid.

In general, we warmly welcome the satisfactory conclusion of the negotiations, which, when I last was involved in them myself, looked to be very difficult and as if they would take a very long time.

I have four short questions to put to the right hon. Lady. First, as we are moving away, as she said, from the concept of association, what is to be the collective name for the 46 developing countries which would have been associated if association had continued?

Secondly, the stabilisation scheme is of great moment, and I welcome the fact that the right hon. Lady is to publish details of that scheme and other matters in the convention. Will the stabilisation scheme have financial limits? Will it cover, in particular, a drop in export earnings? Can she give a little more information about that aspect?

Thirdly, I also welcome what the right hon. Lady said at the very end of her statement, but what will be the effect of aid to countries outside the convention, countries, particularly, in the Indian sub-continent?

Lastly, what will be the effect on our aid programmes—both our bilateral and our multilateral aid programmes—which affect the 46 developing countries? Is this to be additional, or in what way will it affect what we do at present?

May I say how delighted I am to see the right hon. Gentleman in his place again?

I suspect, although there is no formal agreement about this, that the collective name, rather traditionally established during these negotiations, will become the ACP—that is, the countries of Africa, the Caribbean and the Pacific.

Secondly, there is a financial limit to the export stabilisation scheme. An amount in the calculations of the monetary side of all this allows for the export stabilisation scheme. It is very intricate. I am sure that the right hon. Gentleman will want to study it in detail. The answer is broadly that the export stabilisation scheme is confined within a financial limit.

On the third point, about aid to the Indian sub-continent, this is exactly at the other end of the problem that we have, in that I now have to seek to persuade the Community Development Ministers that there should be a worldwide, roughly 50–50, distribution of aid as between aid to the ACP countries and aid to those countries which are not, under the old nomenclature, associated.

Fourthly, as to the effect of our aid programme, obviously we have to make allowances in our aid programme for the fact that there will be EDF aid to some of our traditional clients, but this is something that we shall have to take on a case-by-case basis, because we shall clearly want to see what the programming of commitments is to those countries which have traditionally benefited from British aid. We shall have to see what the balance arrives at.

May I congratulate my right hon. Friend on what is by any standards obviously a very remarkable achievement.

Am I right in saying that the amount involved, though it is a very impressive figure, is considerably less than that which the original countries themselves bid for? That being so, is this a final and conclusive figure, or is there any suggestion of its further increase or supplementation at a later stage?

Finally, may I reinforce the point raised by the right hon. Member for Bridlington (Mr. Wood) that there is bound to be continuing and grave concern for those countries outside the ACP, which include those countries which are the most chronically poor in the world?

The size of the European Development Fund relates very precisely to the five years which will be governed by this convention. It is true that the ACP countries would have preferred more, but I think I should tell the House what Mr. Ba, the President of the ACP countries, said to us during the negotiations. He said "We, the developing countries, regard development as a matter for us. We do not wish to bargain with you about this." In the end we have got an arrangement on timing which in effect increases by a certain proportion the value of this aid. In other words, the aid is confined to a rather shorter period, which increases the amount available during those five years. I emphasise that, in my view, whereas the aid side of this was on the whole predicable and is important, it is the trading relationship side which marks the advance.

As for the second point relating to the Indian sub-continent, or renegotiation objective, which was stated as getting a better deal for Commonwealth and developing countries, is in part embodied in the convention, which means that we have better trading relationships for the Commonwealth countries in association with the Community. It will be partly embodied in the negotiations of my right hon. Friend the Secretary of State for Trade and President of the Board of Trade on imperfections in the generalised preference scheme of the Community. It will in part be embodied in my continuing negotiations with the Development Ministers on a fair share of EEC aid for the countries outside association, namely those of the Indian sub-continent.

Is the Minister aware that it is very pleasant to be able to congratulate her warmly only days after previously having done so? This is a considerable advance on the pattern established by the Yaoundé Convention.

The right hon. Lady paid a tribute to the Commonwealth negotiators and to Sir Michael Palliser. Is the agreement not also the clearest evidence of good will on the part of our Community partners?

Will the right hon. Lady say whether the safeguarding of our Commonwealth partners, to which she referred, could as successfully have been achieved from without the European Community as she has managed to do it from within?

Finally, what effect, if any, might our withdrawal from the Community have on the agreement? Would it, for example, mean that the Commonwealth countries might be in the position of having to choose between the EEC market and the British market?

As everybody knows, we have a referendum coming. Depending on the results of that, it will be for the Com monwealth countries concerned to make their own decisions about what they will want to do. They will have options open to them. My impression, for what it is worth, is that the genuine trade advantages offered by the agreement, which I would hope could be the forerunner for wider international agreements of this kind, would be likely to mean that most of them would consider withdrawal rather carefully, but they might wish to have a dual relationship with us and with the Community. I do not know. It will be for them to decide.

As to whether one could have achieved the same result from without the Community, it is undoubtedly true that if we had been outside the Community we could not have done so. However, if we had not been members of the Community the issue would not have arisen, because the Commonwealth countries would not have been in association with the Community or moving into association with the Community, at least for the most part. That is therefore a rather hypothetical question.

This is a great advance. I emphasise how much the advance is due to the maturity, sophistication and understanding of our Commonwealth member countries. They have transformed the situation of the old paternalism with its relationship primarily with the francophone countries. They have made the relationship between the Community and the developing countries grow up.

May I join other hon. Members in thanking my right hon. Friend for the hard work she has done? Can she confirm that the free entry foodstuffs include temperate foodstuffs which are produced in large quantities inside the Common Market?

Secondly, will my right hon. Friend say something about the liability for this stabilisation fund? Would it not be possible, in the event of any change in the EEC, for this stabilisation fund to be extended beyond the bounds of the EEC into some wider regional or world organisation?

On the first point, I would refer my hon. Friend to the full details of the text of the agreement. I apologise for not being able to give all the details today, but they are so intricate, as my hon. Friend will understand, that I thought it better to rest on producing the whole text to the House as soon as possible—within a few days, I hope. Certain temperate products are included. Broadly I should say that the Commonwealth countries and the ACP countries in general, although they would have liked the inclusion of some other products, were ready to accept the agreement we reached on which products should be included. It was obviously a matter of bargaining and negotiation.

On the second point, I envisage that the stabilisation and export earning scheme embodied in the convention could be the precursor of a wider agreement, perhaps, at UNCTAD. After all, if we have nine industrialised countries ready to agree with 46 developing countries on such a scheme, I believe that the barriers to agreement on an international scheme at UNCTAD must be very considerably reduced.

May I return to the question of what the consequences would be if we were to withdraw from the European Community. In that situation, would it not be necessary for us at least to unscramble the package and to carry out fresh negotiations about the extent to which free access was available to the developing countries concerned and the extent to which we participated in the export earnings stabilisation scheme, to mention just two examples?

We shall have to take these matters one at a time. We are still engaged in renegotiations, and when they are complete there will be the referendum. It would probably not be reasonable for us to predict precisely what would be the right course following the referendum. We must allow that to sort itself out.

I congratulate my right hon. Friend. Was account taken of what the Select Committee on Overseas Aid said about the problem of oil prices for Pakistan, India and Sri Lanka? To what extent was the effect of oil prices on those countries' earnings taken into account in the discussions? Will the agreement compensate them for it?

No, Sir. The matters to which my hon. Friend refers have been under hard discussion in the other forum, the Council of Development Ministers. These matters will be returned to at the meeting of that forum in March. My argument has been exactly as my hon. Friend has indicated—that there must be some help from the EEC to these poorest and largest countries which are very hard hit by the rise in oil and commodity prices. But that was not a matter for this forum in the Protocol 22 negotiations. It is for the other forum, the Council of Development Ministers.

Will the right hon. Lady tell us a little about the free market for industrialised goods of the 46 within the Nine of the European Economic Community? Do I understand it to be an absolutely free access? If so, what effect does that have on the elaborate existing provisions for the protection of such industries as the textile industry?

I think that the hon. and learned Gentleman will find when he looks at the detailed text of the agreement that textiles do not arise in this context. The industrialised products concerned were carefully defined, as emerges in the text.