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 Sir Ronald Bell Sir Ronald Bell , Beaconsfield 12:00 am, 29th June 1979

I, too, congratulate the Government, and indeed their predecessors, on the progress of the Tokyo round and on the relatively successful conclusion of that negotiation, which is clearly of national and world interest.

I want to draw attention to what I see as a serious defect in the Tokyo round. I refer to the continuing inadequate and unfair treatment of Australia and New Zealand. The right hon. Member for Lanarkshire, North (Mr. Smith) referred to that subject, but he appeared to be relatively happy with the concessions embodied in the draft—a draft which we have been able to examine only briefly. I wish that I could feel the same satisfaction about the outcome, but I do not.

My hon. Friend the Minister of State, in describing the progress made and in referring to the problems of Australia and New Zealand, said that the difficulty was that if one acted it would mean encroaching upon agricultural matters. What a remarkable reverse that amounts to. I remember when we charged no tariffs on food into this country and when our negotiations related to manufactured goods. Now we are saying that these matters are very difficult. However, it is not insuperably difficult to reach agreements on manufactured goods. But when we come to talk of reducing tariffs on food we enter into an extremely difficult area—to such an extent that the most exiguous degree of success appears to be held as a triumph.

The British Dominions of Australia and New Zealand have been treated scurvily in the Treaty of Rome, and indeed by this country, which had special responsibilities towards them. Those responsibilities are in no way discharged by the concessions obtained in the Tokyo round. I am glad that there is to be some concession about a few thousand tons of cheese and the quotas on frozen beef, but those are minimal matters. The fact is that, although Australia seems to be emerging with some success from its economic difficulties, New Zealand is in a very difficult position. That is happening because the United Kingdom entered into the Treaty of Rome on unfair terms and this put New Zealand in an awkward position. That position is now being aggravated by the increase in the price of oil—a commodity imported by New Zealand. I must tell the Minister of State that this matter cannot be considered to be closed by the minimal concessions that have been extracted in this round. Something substantial has to be done about New Zealand in particular, but also, I like to think, about Australia.

The general concept of the Treaty of Rome, as the right hon. Member for Lanarkshire, North said, is the real trouble. We are working through the various GATT rounds towards the concept of almost free trade in manufactured articles. But, for some reason, the same goal is not accepted in relation to agriculture. There should not be this distinction and this dichotomy between manufactured goods and agriculture. All are branches of human industry, and the considerations that apply to one in favour of free movement between countries apply equally to the other. I should argue that they apply more to agriculture. The classic example in this context is New Zealand dairy products.

New Zealand is more competitive in dairy products. It produces the best and the cheapest dairy products in the world because of its climate. What better argument could exist for New Zealand to supply them to other countries less favoured in that respect? That would be the ordinary law of free competition, which we regard as the ark of the covenant in the GATT negotiations. But it is not applied because the Common Market treaty is based on the narrow interests of France and Germany and the agriculture surplus countries in the West of Europe. For that reason, the GATT negotiations are based upon the assumption that there is some fundamental difference of principle betweeen agriculture and manufactured goods.

If we are to save the prosperity of those British Dominions on the other side of the world, we must get away from the totally false distinction between manufactured goods and agriculture.

The next point that I wish to make, although related, is different. I question the value to us at all now of the Rome Treaty and the Common Market concept. I was always doubtful of the wisdom of entering into that bargain. I believe that people committed themselves, and took up positions, before the success of the Kennedy round under GATT and at a time when there was widespread scepticism about the success of the Kennedy round. Once that round had attained expected success, it always seemed to me that the economic argument, to the extent that there was one, in favour of the Common Market treaty had been destroyed—the argument about a single internal market of great magnitude. Our experience in recent years has shown my view to be true.

Now that the Tokyo round has been concluded in the sense that the Minister of State has expounded to the House, it is surely beyond argument that there is no conceivable advantage to the United Kingdom in being inside the Common Market as defined by the Rome Treaty. I realise that both Front Benches are the prisoners of past statements and past momentums, if that is the correct plural. I do not expect a clear announcement this afternoon. I hope, however, that the inescapable logic of what my hon. Friend has been saying to the House will begin to mature and bear fruit. It would be realistic in eight years' time, when the existing tariffs have been reduced by 30 per cent. of their present level, to talk about the immense advantage of being inside this tariff fence, especially when one considers the alternative.

I am not hopeful. I throw the seed upon the ground, hoping that it is not barren. When we entered the Rome Treaty, we threw away the two great competitive advantages of British industry. One was cheap food—that was our big advantage in the world—and the other was that our tariffs were higher than other people's. By entering the Community, we lost the cheap food and became a dear food country. We also threw away the substantial tariff advantage, which would be so welcomed by British Leyland now.

I am not adopting a protectionist view. My hon. Friend rightly said that protectionism is not the reaction to the difficulties in the world. It is not. Competition is very important for improving the efficiency of management and bringing realism to the thoughts of trade unions. But do we throw away an existing degree of protection when nationally we are going through one of our weakest periods, which still exists, at a time when the productivity of our people per head is about a third or half that on the Continent of Europe or the United States?

A fresh breeze of competition is healthy. To plunge a patient into a bath of ice is another matter. We threw away the two positive advantages that we possessed at a moment when we were least able to take the oncoming shock.

My hon. Friend announced to the House today the gradual extinction of the protective tariff around the European Community. In the interests of our overseas Commonwealth and also in the interests of the people of this island, it is time that we began to do the sums again and to ask ourselves whether the way ahead is not the way out.