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9.45 pm

Mr. Spring: I beg to move amendment No. 2, in page 1, line 9, after "10", insert—

'other than Article 2, paragraph 8.'.

The Nice treaty goes beyond the extension of QMV. It represents the extension of Community competence beyond the existing common commercial policy to other aspects of services and intellectual property. Under the current mixed competence arrangements for overseas trade in services, member states take full part in bilateral negotiations with other World Trade Organisation members, but the Commission acts as lead negotiator in the WTO. Common positions are agreed unanimously with all EU member states. However, paragraph 8 of article 2 of the Nice treaty amends article 133 TEC to allow the Commission to negotiate, and the Council to agree external agreements on the trade in most services and the commercial aspects of intellectual property.

In addition, agreement will usually be reached through QMV. Labour Members highlighted those provisions when mentioning the alleged benefits of extending QMV. Their view is that the Commission tends to have a liberalising agenda, ergo the move must be beneficial. By questioning it, Conservative Members are told that we stand in the way of liberalisation and trade. However, the changes to article 133 represent a significant extension of Community competence in aspects that are vital to the UK economy. It is disappointing that the Government are content to rubber-stamp them so casually.

Perhaps it is true that the Commission would currently approach aspects of service trade agreements from a liberal perspective, but the extension of competence that we are discussing is not limited to specific agreements or times. Who is to say that the point of view of the Commission or the Governments of other member states, which are meant to guide the discussions, will not change? If it does, the House would be powerless to put the case for service trade discussions that are in the interests of this country or, as we perceive them, the EU as a whole.

Britain tends to have an outlook that is generally more oriented to free trade in international negotiations than that of some of our partners. It could be argued that QMV means that the British point of view can prevail. However, it could also be argued that an alternative viewpoint could prevail over ours. No individual state will have a veto on the conclusion of agreements by the Community. That applies to Britain as much as any other country.

The financial services sector is vital to the UK economy. Its importance continues to increase. Does not the Minister recognise that UK interests often differ from those of continental financial service centres? We have much more international business than our continental neighbours, especially in the bond and foreign exchange markets. The UK has massive investments outside the EU, and massive inward investment flows into this country from outside the EU. Can the Minister clarify whether the Nice treaty provisions mean that the UK would be unable to negotiate with, for example, the United States or Japan, even when our interests diverge from those of the rest of the EU? Could our interests be overridden by QMV? If that is the case, are the Government as genuinely comfortable with the changes as they suggest?

We are a trading nation par excellence and our capacity to continue as one needs to be assured.

Denzil Davies: I appreciate that the debate must end at 10 pm, but I want to ask my hon. Friend the Minister

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for Europe one or two questions. We are considering an important change, which could be relevant to the general agreement on trade and services and the intellectual property aspect of the Uruguay round. One of the few occasions when the European Court of Justice supported member states was when it upheld the argument that they had a competence in negotiating trade in services. Now, of course, that competence has been taken away and, in effect, given to the Council of Ministers and the Commission. In effect, therefore, a veto that would otherwise have been available to member states has gone.

New paragraph 5 of article 133—on page 17 of the treaty of Nice—refers to the

Paragraph 7 also refers to intellectual property. What intellectual property is being referred to in paragraph 7 that is not included in paragraph 5? Paragraph 5 covers the commercial aspects of intellectual property. We are then told that other intellectual property agreements are covered by paragraph 7. I am not sure why it should be necessary to have a second paragraph. I would have thought that paragraph 5 would deal with the matter.

Secondly, why was it felt necessary to get a derogation in respect of human health services? The French got a derogation in respect of cultural services, as I understand it. I am not saying that we should not have that derogation, but what are we talking about? What human health services would otherwise have been affected by the general agreement on trade and services? Is that what the derogation relates to?

Mr. Menzies Campbell: Following the point made by the right hon. Member for Llanelli (Denzil Davies) a moment ago, I understand that the French insisted on agreements relating to trade in cultural and audio-visual services, educational services and social and human health services requiring unanimous agreement being required to remain matters of shared competence. Such agreements would be concluded jointly by the Community and the member states. Will the Minister confirm whether that is indeed the legal position and, if so, what reasoning lay behind it?

Peter Hain: I am grateful for the points that have been raised by right hon. and hon. Members. I continue to be amazed by the position taken by the hon. Member for West Suffolk (Mr. Spring).

Mr. Spring: Good.

Peter Hain: Well, perhaps I am not really amazed. Perhaps that is what one would expect from the Conservatives.

These are important changes to the EC treaty that will bring real benefits to Britain. I disagree with my right hon. Friend the Member for Llanelli (Denzil Davies) on the loss of the veto, because the common commercial policy helps the member states to combine their strengths to act as a liberalising force in the world market, which will help to open up overseas markets to British companies. That is the point of the measures. Those companies should be told about the Conservative party's position in wanting to block opportunities that will arise as a result of the changes in the Nice treaty.

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We have to be prepared to modernise if our economies are to adapt to this century. That is why we agreed to extend the scope of the common commercial policy to include some services and commercial aspects of intellectual property, as my right hon. Friend mentioned. Those sectors of the economy are increasingly important in the modern world. An example is financial services, in which Britain is especially competitive, and it is important that the European Union should throw its full weight behind discussions on such issues. Britain will benefit from the measures; that is why we supported them and why we completely reject the amendment.

Mr. Cash: As has been said, the proposal brings in qualified majority voting for international trade agreements. Apart from extending the subject matter to intellectual property, this has a great deal to do with the obsession of France with cultural services. The article's main provisions on cultural services are a sop to France and its concern about losing the international cultural rules, as the French put it, to the United States of America. That is really what this is all about. Elements of unanimity remain, but this is eventually going to have a severe impact on much of the World Trade Organisation's negotiations, which will be affected in unpredictable ways.

Amendment negatived.

Mr. Spring: I beg to move amendment No. 30, in page 1, line 9, after "10", insert—

'other than Article 2, paragraph 17'.

The First Deputy Chairman: With this it will be convenient to discuss the following amendments: No. 79, in page 1, line 9, after "10", insert—

'other than Article 3, paragraph 1'.

No. 105, in page 1, line 9, after "10", insert—

'other than Article 4, paragraph 5'.

No. 119, in page 1, line 12, after "Protocols", insert—

'(other than Article 1 of the Protocol on the enlargement of the European Union)'.

No. 120, in page 1, line 12, after "Protocols", insert—

'(other than paragraph 1 of Article 2 of the Protocol on the enlargement of the European Union)'.

No. 121, in page 1, line 12, after "Protocols", insert—

'(other than paragraph 2 of Article 2 of the Protocol on the enlargement of the European Union)'.

No. 122, in page 1, line 12, after "Protocols", insert—

'(other than paragraph 3 of Article 2 of the Protocol on the enlargement of the European Union)'.

No. 123, in page 1, line 12, after "Protocols", insert—

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