Oral Answers to Questions — East-West Trade

– in the House of Commons at 12:00 am on 21st October 1969.

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Photo of Mr William Owen Mr William Owen , Morpeth 12:00 am, 21st October 1969

asked the Prime Minister if he will set up an interdepartmental inquiry into the varying trade agreements with nations in the European Eastern zone with the object of normalising trade relations and reaping the advantages of expansion in this market; and whether he will make a statement.

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

No, Sir. Our trade arrangements with countries in Eastern Europe provide a good framework for the development of trade with these countries and they are kept under review from year to year.

Photo of Mr William Owen Mr William Owen , Morpeth

My right hon. Friend, by long experience, knows the problems and the vital importance of East-West trade. Is he aware that, with scientific and technical progress, forward planning is vital? Is he further aware of the approach of the German Democratic Republic for a long-term trade agreement, and that such an agreement would be of considerable advantage to the export trades of these countries? May I have his encouraging support for developments in this field?

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

My hon. Friend will have been gratified to see that f.o.b. exports from Britain to countries in Eastern Europe, including East Germany and the Soviet Union, have increased from £99 million in 1964 to £223 million in 1968. He will also be aware of the arrangements that I made with Premier Kosygin when he was in this country for linking trade negotiations with the forward five-year production and demand plans of the Soviet Union. As for East Germany, my hon. Friend will be aware of the special difficulties which arise here, due to the fact that East Germany is not recognised by us as an independent country. He will also know the arrangements made over a period of years by successive Governments for trade relations between British industry and East Germany which seem to be working quite satisfactorily.

Photo of Mr Edward Heath Mr Edward Heath , Bexley

Would not the Prime Minister also agree that with the welcome increase in exports there has also been a disportionate increase in imports into this country from the Eastern bloc, which has enabled the Eastern bloc to maintain its long-held ratio between imports and exports, and whereas other European countries have balanced them with us the Eastern bloc countries have never done so? Will he keep up his pressure to ensure that these countries import what they need, such as capital equipment, from us?

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

The right hon. Gentleman will remember, from his own experience as President of the Board of Trade—I remember this being argued with them 20 years ago—that they have always pressed for a surplus in direct trade because of their large purchases from the sterling area. We have never fully accepted this argument. The right hon. Gentleman will know that over the last two years there has been some substantial redress in the balances on the bilateral accounts between the Soviet Union and Britain.

Photo of Mr Eric Moonman Mr Eric Moonman , Billericay

Does my right hon. Friend agree that on the whole the technical agreement between Britain and the Comecon countries works well? In order to make it even more effective, would not he consider a proposal to simulate the practice followed by the French Government in setting up joint committees between industry and Government in those countries associated with the technical agreement?

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

My hon. Friend will know of the detailed arrangements made following my talks with Chairman Kosygin in 1967, leading to regular visits, both by the Minister of Technology, to discuss not only engineering exports but scientific and technological co-operation, and by my right hon. Friend the President of the Board of Trade. We have been considering with the Soviet Government whether this should be further institutionalised, but they are working extremely well.