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Ussr (Shipping)

Volume 934: debated on Monday 27 June 1977

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21.

asked the Secretary of State for Trade what representations have been made to the USSR regarding the undercutting of Western freight rates by the Russian merchant fleet.

30.

asked the Secretary of State for Trade whether he will make a statement on his recent discussions with the Russian Minister for Shipping.

A wide range of important issues was covered in discussions between my right hon. Friend and myself and Mr. Guzhenko, the Soviet Minister of Merchant Marine, during his recent visit. These included Soviet undercutting of freight rates, the provision of excessive capacity on certain liner trades and the need for a fairer balance between United Kingdom and Soviet ships in our bilateral trades. The Soviet Minister was left in no doubt that we expected real progress to be made in achieving an equitable resolution of these problems.

Since it is very damaging to Western interests that the Soviet Union should undercut freight rates of the Western world by up to 30 per cent. and should monopolise Anglo-Soviet trade in its own ships by 85 per cent., are the Government prepared to undertake any co-ordination with the Western world in retaliatory action if no progress is made in the discussions?

We have made it plain to the Soviet Union that we prefer a policy of accommodation rather than confrontation. Nevertheless, as the Soviet Minister well knows, there is provision in Part III of the Merchant Shipping Act 1974 for us to introduce countervailing measures. We have been discussing this whole procedure with other Ministers in the Western world. However, the picture is not always as bleak as the hen. Gentleman suggests. There has been some improvement in the bilateral trades in that the Soviet Union has agreed that an additional ship should be available to serve those particular interests. Of course that is not enough, but it is a sign of improvement.

Is my hon. Friend aware of the general anxiety about the very rapid increase in Russia's merchant shipping fleet, which is apparently out of relation with the increase in its international trade? Will he confirm that an offer was made for some provision for a return to British shipping being used for the timber trade if that were possible?

The last point raised by my hon. Friend refers to the matter raised earlier by the hon. Member for Shoreham (Mr. Luce). The Russian Minister was helpful as far as the bilateral lines of trade were concerned and wanted to see a movement towards parity. I think that that is an advance. The important thing about the size of the Soviet merchant fleet is that it should be in balance with the trade generated by the Soviet Union, and this was another point that we made firmly to the Soviet Minister.

Is it correct that there are to be two further meetings on this matter in August? Are not all the facts known about Russian activities in this matter? What are these further meetings intended to discuss? Is it perhaps time that the Government showed a little of their muscle in this matter—and I do not mean that in a pejorative sense?

The important thing is to examine the possibilities of arriving at an accommodation rather than to jump into a position of conflict and confrontation. That is the purpose of the meeting to be held in Russia in August. It will be attended by ship owners as well as departmental officials, and they will be able to continue the very helpful dialogue that has started. I hope to be able to go to the Soviet Union in October to see what progress hase been made over the course of the next three months.