Orders of the Day — Multilateral Trade Negotiations

Part of the debate – in the House of Commons at 12:00 am on 29th June 1979.

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Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertfordshire South 12:00 am, 29th June 1979

About two years ago. I know what my hon. and learned Friend is thinking, but I prefer not to comment.

I turn to the question of agriculture. It may surprise the House to hear that we find the result of the MTNs in this sector particularly welcome. When we took office, the Community had already negotiated deals with an important agricultural context with the United States, Canada and New Zealand, and the Australian deal, agreed a fortnight ago, was already on the stocks. That deal contains a major agricultural element.

The main effect of these agreements is of substantial benefit to the United Kingdom. Under the deal negotiated with the United States, the wine gallon assessment method for taxing imported spirits will be abolished for imports from the Community and the quotas for cheese will be substantially increased. In return, the Community has made concessions over high quality cuts of beef, known as Hilton beef, turkey portions, rice, tobacco and a number of other products. Abolition of wine gallon assessment will mean that after the end of this year United Kingdom whisky and gin distillers will no longer be faced with penal rates of duty on whisky and gin exported in the bottle rather than in bulk. This concession is very welcome and will be especially appreciated in Scotland, as I am sure the right hon. Member for Lanarkshire, North will agree.

The EEC deals with Canada, Australia and New Zealand involve some loosening of the rigid framework that has almost cut out some types of international trade, with the provision of modest but useful quotas in each direction. The important thing about the deals with Australia and New Zealand in particular is not so much the effect that they will have on supplies within the Community—as everyone knows, the Community problem with dairy products is one of over supply rather than shortage—as their effects in securing and expanding trading links between the Community and Australia and New Zealand at a time when there was a real danger that these links would become more and more tenuous. I am glad that our EEC partners were able to recognise the importance to Australia and New Zealand of their agricultural exports, and the need therefore for the Community to find some ways of enabling these exports to be increased.

I remember hearing the excellent speech of the Australian trade negotiator, Mr. Garland, in London towards the end of last year, when he pointed out very effectively that if the EEC continued to adopt such a rigid attitude to imports of agricultural products from Australia, the end result might be that Australia would be forced to sever trading links with us and be driven into a regional trading block, which her Government did not want. I am glad that in the later stages of the negotiations it was proved possible to avoid that danger.

I shall say a few words about the various steps necessary to implement the results of the MTN package. This deals very largely with matters that are subject to Community legislation. Therefore, most of the implementation will be by decisions and regulations made by the EEC Council of Ministers. Subject to satisfactory progress in implementation by others, including the United States Congress, the Commission will make the necessary proposals to the Council for it formally to enter the MTN agreements with the participation of the member States also where necessary, and for the necessary alterations to existing internal arrangements, which will not be widespread. These proposals will be deposited with Parliament and will be available for scrutiny in the normal way. Some of the agreements may need to be designated as "Community treaties" under section 1(3) of the European Communities Act 1972. In that case the Government will introduce the necessary draft orders in the autumn.

The successful outcome of the negotiations can be regarded as particularly important for the United Kingdom in practical terms. We must never forget the degree of our dependence on international trade. In 1978 our exports amounted to almost one-third of our gross domestic product, compared with only 20 per cent. 15 years ago. In that same period exports of manufactured goods have remained a stable proportion—about 80 per cent.—of total exports. Since our imports also amount to about one-third of our GDP, with an increasing proportion—now nearly two-thirds—being manufactures, we must make vigorous use of increased trading opportunities such as those provided by the newly renegotiated MTNs.

To sum up, in trade terms the package will bring advantages to the United Kingdom. There seem to be adequate safeguards for those sectors of our industry that are worried about certain tariff cuts. The package will strengthen the role of the GATT as the institution for the negotiation of new commitments for the promotion and liberalisation of world trade. To enhance its authority as the place for the orderly settlement of disputes about international trade, the Government's conclusion on the MTN package—in this we agree with our predecessors who accepted it at the April meeting of the Council of Ministers—is that it should be endorsed.

I believe that it is very important now, when there is concern about a possible recession, that developed and developing countries do not draw back from reaching final agreement. In times of crisis it is more important than ever that in the world trading system we should operate within a framework of agreed rules and that people trade within those rules. I heartily commend to the House the newly renegotiated package.