Washington Shipping Conference

– in the House of Commons at 12:00 am on 4th December 1959.

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Motion made, and Question proposed, That this House do now adjourn.—[Mr. Sharples.]

4.0 p.m.

Photo of Mr John Woollam Mr John Woollam , Liverpool, West Derby

I wish to raise the matter of the Washington Shipping Conference, which was held in June of this year and at which the then Minister of Transport represented this country. I want, first, to quote a few sentences from the official communiqué which were incorporated in the OFFICIAL REPORT. The communiqué said: The representatives agreed that there was a need for further exploration of some aspects of these problems and of new problems which might develop in the field of shipping. They therefore agreed to recommend to their governments that favourable consideration be given to informal arrangements which would facilitate discussion and consideration of those problems. The communiqué also referred to the fact that United States representatives had said that the views on United States shipping policy expressed by the European Governments would be considered in connection with a study of the United States transportation policy, together with such additional material as might be presented by those and other Governments.

Those quotations lead me to the purpose of the debate, which is to ask the Joint Parliamentary Secretary what progress over the past six months he can report. Can he tell us whether the continuing informal machinery has now been established, whether it is functioning, and whether any further representations have been made to the American shipping authorities? Perhaps to that he can add any information about the study of United States transportation policy, to which committee, I understand, fresh representations can be made by the European maritime nations. I do not know whether he could also add some information about probable early developments in 1960 which may come out of this informal machinery which has been set up.

The other aspect on which information would be welcome would be not only on developments among European maritime nations, but developments on the other side of the Atlantic, in particular, on whether the attitude of the American authorities has in any way noticeably changed since the time of the Washington Conference. I am well aware that the Parliamentary Secretary may not be able to give me as much information as I should like or am seeking. There are considerations of discretion and almost of diplomacy involved in a matter such as a joint committee covering all the European maritime nations.

However, if he cannot give us all the information we would like, I hope that he can give us at least some encouragement. I should like encouragement to offset the unfavourable impression which the American comment on the conference made on me. I have brought along a few quotations which I should like to read. I do not know whether the Parliamentary Secretary has had these brought to his notice. The first is from the Maritime Reporter of New York, which, in an editorial on the Washington Shipping Conference, said: A group of European maritime powers … had the temerity to request a meeting so they could complain about this nation's shipping policies.

The editorial referred to the opening statement to delegates by the American Under-Secretary of State for Economic Affairs and referred to it as "the most constructive maritime document" to come out of the American Department concerned. The editorial also went on to say that that document … sent the European complainers scurrying home believing that they had stepped into a hornet's nest. That may be journalistic comment.

There is other comment from people in the industry. The president of the American Merchant Marine Institute, Mr. Ralph Casey, said that the proposal: to establish a committee for future discussions on shipping problems of an international nature leaves me cold. If I were in their shoes, I would be in no hurry again to interfere with what they must now be convinced is a firmly-established maritime policy in this country.

Dealing with the remarks in the communiqué that a committee or working arrangements would be set up, Mr. Casey said: This seems rather fantastic … imagine an organisation set up for the prime purpose of reviewing U.S. shipping policy located in Paris. How ridiculous can you get? That is good and typical American comment on any issue which affects a vested economic interest in America. Many in this country wish that we, in return, were at times equally downright in our comments.

Now that the informal continuing machinery has been established, can the Parliamentary Secretary tell us what is the scope or terms of reference of this machinery or committee? I notice that in the communiqué specific reference is made to the fact that new problems can be raised as well as existing ones. I wonder what the new problems may be. Must they be new problems of obvious and particular interest to American shipping policy and laws, or can they go wider than that? For example, in the coming year could this machinery be used for initiating any general discussion on international scrapping policies? Could it be used at all for initiating any conversations preparatory to negotiations about double tax conventions?

I raise that specifically, because if any of the European maritime nations which are members of the committee wish to revise their own tax laws as they affect their own shipping industries, it would probably be the case—it will certainly be the case with this country—that existing double taxation agreements could be denounced by other parties who have exempted shipping under those double taxation agreements. So, for us, the existence of many double taxation agreements is a cause for no thought or no negotiation being given to new or novel tax arrangements for shipping industries. Will the committee, with its representation of Europe and America, be suitable machinery for commencing consideration of such matters?

I wish to refer to the general argument being put, I hope, to American shipping authorities as distinct from my request for more information about what has happened and what will happen. One paragraph of the communiqué says: The representatives reaffirmed that the general objective of their governments is to promote so far as is practicable freedom of opportunity for ships of all nations to compete in world trade and thus provide the most efficient service in the interest of the general economy of the free world". That is a wonderful test which I should like to think the representatives of the Western European maritime nations are quoting every other day to their opposite numbers in America. Our argument is becoming stronger and stronger, and the American argument is becoming weaker and weaker.

We have seen in the past few months a noticeable change in the American attitude towards free trade and discrimination and currency arrangements in Europe. We have seen a growing pressure from America for an end to discrimination as it affects American products and interests; an increasing request for more free trade, the easing of currency arrangements, and more help from European countries towards foreign aid costs. If that is so, it seems to me that this shipping policy and machinery is an excellent means of putting the intentions of all parties to the test, because we should not go further in making concessions on quotas, discrimination, free trade and currency arrangements if such outstanding and extreme examples of discrimination as the present American shipping laws continue.

It is said that the American shipping laws have to be retained for defence considerations—that the Americans wish to maintain a sufficient merchant fleet in case of war—but is that really the case? The figures now available in the P.E.P. shipping report and those available to the Ministry show that America has an active fleet of 9 million tons, while there is a fleet of about 7 million tons owned and controlled under flags of convenience by American interests.

Those fleets are pledged to America, as it were, in case of war. Therefore, we have an active controlled American fleet of at least 16 million tons even before we consider those ships not under flags of convenience; ships, for example, under British registration and owned by American oil companies. That being so, I do not think that it can be argued that the existing American shipping laws are required to maintain an adequate fleet under American control, because they are not even being used to the fullest extent at present by American shipping operators.

The other aspect of this is that Europe is being asked to contribute more to the foreign aid costs that America is bearing. That seems to be a contradiction of the spirit of the foreign aid programmes, because the American shipping policy is seriously weakening the economies of the very countries that the Americans are now asking to share some of the burden.

I would like to ask whether, in the representations that we are making to America and that we have made in the past, particular stress has been laid on the American policy of reserving all direct trade between American ports, and between American ports and those in American foreign possessions, to American ships only.

That practice is an extreme example of discrimination. British and European ships are debarred from the American carrying trade, whereas no such discrimination exists against American ships in British and European coastal waters. We should certainly ask for a major revision of that policy if the Americans are to ask of us that discrimination and quotas be quickly ended in Europe.

America is now the major shipping Power in the world. Unfortunately, America is also the major shipping Power that is practising an extreme discriminatory and protectionist shipping policy. That is a major contradiction in American economic and foreign policy. I hope that it has been said, and will be said very often, by our representatives on the committee—and in a downright way.

4.14 p.m.

Photo of Mr John Hay Mr John Hay , Henley

My hon. Friend the Member for Liverpool, West Derby (Mr. Woollam) has raised a number of issues arising from the Washington Shipping Conference that took place earlier this year, but before dealing with the spirit of the specific points that he has raised perhaps I may say a ward about the broad background to the problems that gave rise to that Conference.

The Conference was an inter-Governmental Conference. Its purpose was to discuss that shipping policies of Government and, above all, those restrictive shipping policies commonly summed up in the term "flag discrimination". It was not the purpose of the Conference to solve the current shipping problem, which is a depression in world shipping. That problem might be described as too many ships chasing too few cargoes. Its causes cannot be wholly, or even primarily blamed on the shipping policies of Governments. Restrictive shipping policies on the part of Governments are a factor, but even if we were completely successful in stopping them there would still be an excess of tonnage in the world and there would still be this very grave commercial problem.

The restrictive policies of Governments, which were discussed at the Washington Conference, are of vital importance as affecting the competitive ability of British shipping in world markets, and this is true just as much in good times as in bad. Flag discrimination has been rife since the end of the last war, and it has been tackled by successive Governments, both Labour and Conservative, throughout all these years, both in periods of boom and in periods of slump. Flag discrimination and other restrictions by Governments affecting the free movement of shipping are bad for this country at all times, as they are also bad for the free interchange of international trade. The reason is simply that our shipping needs a fair field in which to compete. As my hon. Friend said, our economy requires that the costs of international trade should be kept on the most economic basis possible.

The purpose of the Washington Conference, therefore, was to attempt to agree on principles. Flag discrimination was the main subject of discussion, because this is a problem that stems directly from the actions of Governments. As the House knows, the questions of shipping subsidies and the growth of fleets under flags of convenience were also discussed. A great deal of thought and a lot of action have been applied to these problems since the end of the war. We were not raising new problems at the Washington Conference. Nor were our views on this problem unknown to the United States before the Conference. The same is true of the other European countries. Our views have been made very plain in all sorts of ways throughout the post-war years.

What was new about the Washington Conference was that it was the first time that a high level meeting had been arranged between the European maritime nations most concerned, acting collectively, and the United States Government, to discuss these shipping problems. Three of the European delegations, including the delegation from this country, were led by Ministers. Another thing that was new was the way in which the European nations presented the issues to the United States Government. The issues were presented against the particular background of interdependence between the United States and her European partners. The European nations urged upon the United States Government the importance of these problems for the whole economic and defensive strength of the West, and demonstrated how restrictive shipping policies weakened Western strength.

The European objective was to bring home to the United States Government in what precise way American shipping policy contributed to this unhappy result. The hope was that, against this wide background, it would be possible to establish a closer harmony between European and American shipping policies. Flag discrimination was the chief subject of discussion, and the European nations tried to show that the American policy of cargo preference was of major importance in its effect on the spread of flag discrimination throughout the world.

The history of this matter is simply that since 1947, the cargo preference requirement, which provides for at least 50 per cent. of cargoes to be carried in American ships, was introduced under the Marshall Aid Programme. Its scope has been progressively increased under American law. Cargo preference is no longer applied simply to shipments of genuine aid to other countries, but to operations which appear to us, at any rate, to be more or less ordinary trade transactions. These measures distort the normal pattern of trade, and deprive the shipping of other countries of opportunities to compete.

It is not possible to assess in terms of figures the harm which is done. The direct harm may not be very great in proportion to world seaborne trade as a whole, but, indirectly, the consequences are very damaging. The American policy is used and abused as an example internationally, and other countries quote it in their own justification. It is regrettable, in our view, that the United States Administration, which has generally done so much to promote free trade, does not, in this matter, exert a much healthier influence which might enable international efforts to combat flag discrimination to be more effective.

The question of shipping subsidies, which was also discussed at the Conference, is of importance as well, but subsidies are less dangerous than flag discrimination, provided that they are kept within reasonable bounds. The problem of flags of convenience was also raised with the United States Government, because their policy has had an important bearing on the growth of fleets under flags of convenience. But this problem is not so susceptible to direct Government action as is flag discrimination, and it is still not possible to see in what direction the international solution of the problem of flags of convenience might be found. All these matters were studied against the wide economic and defence background to which I have referred.

The results of the Conference were summarised in a communiqué which was mentioned by my hon. Friend, issued at the end of the talks, and the communiqué was circulated in the OFFICIAL REPORT on 17th June by my right hon. Friend's predecessor, now the Minister of Defence. The communiqué, it is true, does not show any dramatic results but those were hardly to be expected. We should bear in mind that, as my hon. Friend knows, American shipping policy is embodied in laws passed by Congress, some of them going back well before the beginning of the last war. The Conference did not reach finality on these problems.

However, the communiqué said: The delegates agreed that their full and frank exchange of views had been helpful as a step towards establishing a closer harmony between their shipping policies. The delegates agreed, further, on the need for more consideration of these problems and recommended that the informal arrangements which my hon. Friend has mentioned should be established for this purpose.

The criticism has been made that the House has not been given enough in- formation about the discussions at the Washington Conference and my hon. Friend has asked for more information this afternoon. But I would ask him and the House to bear in mind the background to the Conference on which I have spent a little time in outlining. I have explained that the talks were inter-governmental and they were also informal. The official title of the Conference and of all the documents produced in Washington relating to it is "Informal Inter-Government shipping talks." The Conference represented a rather new technique in the handling of these shipping problems which had been the subject of discussions between Governments through the usual diplomatic channels throughout the post-war years, and although the conference rightly received a great deal of public attention, particularly in the United States, and not all of it favourable, in essence it was a continuation of diplomatic diplomacy in a rather novel way.

The value of the Conference was that it enabled the Government to be genuinely frank about their interests and objects. Open diplomacy, as it is sometimes called, would not really serve this purpose. This must be my answer to my hon. Friend. Talks of this nature must be kept confidential. Indeed, all the ten Governments which took part agreed that the proceedings should be conducted on this confidential basis. But I can assure my hon. Friend that the Conference would never have been held at all and there would be no follow-up to it if the proceedings had to be made public.

There was enough criticism as it was in the United States of the mere fact that an international conference should be held at all to consider the international implications of what some shipping circles in America regard as purely domestic matters of United States policy and legislation. It would stultify future progress if we went beyond what was agreed by the participating Governments, by disclosing publicly more than has been stated in the communiqué.

As to the next step, as I have said, the delegates agreed that they would recommend that informal arrangements for further consultation should be established, and all the Governments concerned, including the United States, have accepted this recommendation in principle. I must admit, however, that I am disappointed that finality has not yet been reached in establishing these informal arrangements. As I said in reply to a Question by the right hon. Member for Easington (Mr. Shinwell) on 11th November, I hope that arrangements will soon be concluded to establish machinery for consultation. The difficulties in doing so have been partly mechanical and the fact that there are ten Governments concerned among whom agreement has to be reached. That inevitably is a slow process. We want to establish really effective machinery. We have to overcome the practical difficulties of securing appropriate representation among all those countries so that we can make real progress.

Consultations are bound to be primarily at expert level, but problems at issue also involve political considerations, and the arrangements are still being discussed with the United States Government. Until details practicable for everybody have been worked out, it would be premature—and it would not help towards the solution which we are all trying to get—for one to do more than to emphasise that Her Majesty's Government attach great importance to getting the informal arrangements established at the earliest possible date so that discussion can go on in a collective way to follow up the Washington Conference itself.

I do not want anyone to imagine that in the absence of this machinery there are no contacts on these problems between ourselves, other European countries and the United States. There are. These shipping problems discussed at Washington, and others, are constantly coming up for discussion in one way or another and are being dealt with in the most appropriate way. For example, we have in Washington a shipping attaché responsible to my right hon. Friend's Department, and informal talks take place. In the rather wider European context, questions of shipping policy are under regular discussion in the Maritime Transport Committee of O.E.E.C. in Paris and my right hon. Friend is repre- sented as an associate member there. Someone in America did not like that to be so, but it is useful to have that representation there because the representatives take part regularly in the discussions of the Maritime Committee.

All these discussions, valuable as they are, however, are not by themselves enough in view of the seriousness of these problems, and that is why we are anxious to get the informal arrangements established. I stress again the international nature of these problems of shipping policy. They are of essence international; that is why we are tackling them through international discussion, but that also is why they are such difficult problems. Her Majesty's Government regard it as vital for British shipping and all that it means to this country in the development of international trade and peace and prosperity of the world, to have a fair field for competition. We are determined to go on with efforts to restrain other Governments from discriminatory practices and to get our friends to help us to do so.

There is no magic wand which we can wave which will solve this problem. Other countries still think that vital interests of theirs are involved in building up a merchant marine and some, as a way of achieving their aims, have resorted to measures of discrimination and restriction. The United States Government are preoccupied with defence interests involved in the merchant marine. We have tried to show the United States Government that we must look at defence in the wide context of the Atlantic partnership and the context of our common economic strength.

Much as I should like to have been able to tell my hon. Friend a great deal more, I have to bear in mind the responsibility we have here. I can say to him only that I am grateful for his interest and assure him that we shall simply persevere and try to get results as soon as we can.

Question put and agreed to.

Adjourned accordingly at twenty-nine minutes past Four o'clock.