Examination of Witnesses (Questions 220-239)
BERR AND UKTI
28 APRIL 2008
Q220 Chairman: Can I ask you just
one question on timing before we move on to Mike Weir's questions:
does the Government have a view of how long any transitional arrangements
for freedom of movement of labour might be in any accession?
Lord Jones of Birmingham: No,
not yet.
Q221 Chairman: But there would be a period?
Lord Jones of Birmingham: There
would have to be. Actually, Chairman, quite apart from the whole
immigration and the Bulgarian and Romanian issue—forget
that for this purpose—we are talking about the most populous
nation in an enlarged European Union.
Q222 Chairman: And a very young one.
Lord Jones of Birmingham: And
50% of the population is under 28 years old today and they are
70 million today and they will be past Germany's 80 million by
2012, so it would not be about a view on immigration in terms
of Bulgaria which has only got seven million, it would just be
the sheer size of the place. When I saw that prejudice in Vienna
it taught me a lesson about the fact that I can concentrate on
the Frances of this world, as you have just said, or Greece, but
there will be quite a few small countries that for different historical
reasons have serious prejudice about all this, and what do we
do about it? The answer is you just keep your foot on the gas
and you keep the door open and you keep going. There is another
reason for doing this, you know. I hope all of us are here today
with an interest in the trade investment and the economic consequences
of all of this understand that there is a much bigger reason which
is that of course I believe that business can make a serious difference
to people's lives around the world, especially in developing nations,
if we are allowed access and we behave responsibly, but if you
are going to get the young of Muslim countries (and, remember
this: as the developed world countries get older the Muslim countries
in their demographics are getting younger) and if we have a prayer
of reaching out to them with the benefits of democratic capitalism,
with the benefits of freedom of speech and freedom of worship
and freedom of assembly, and the values we hold dear, if we have
a prayer of getting anywhere near this, then the world will see
and watch how the European Union deals with Turkey. Of course
I will say to you that means let them in, but even if it was not
let them in, the grounds have got to be because of proper rational
thought and not because of prejudice, and that businessman in
Vienna was exhibiting prejudice here because it is in his best
interests for economic reasons to have them in when they are just
down the road. In fact, Austria will benefit far more than Britain
because of its proximity, and it was prejudice and I think, whether
it is Holland or France or Austria or Greece, if we show it from
a prejudicial point of view then we will reap a whirlwind in decades
to come.
Q223 Chairman: I would just caution
the young people watching this evidence that if they have got
their foot on the gas they should then close the door!
Lord Jones of Birmingham: And
no naked flames!
Chairman: Mike Weir?
Q224 Mr Weir: We seem to have gone
from the Romans to the invasion of the Turks at the gates of Vienna.
The Romans never got to Scotland—
Lord Jones of Birmingham: What
about the Antonine Wall?
Q225 Mr Weir: We will get there!
Lord Jones of Birmingham: 142
AD; it was Antonine and he was north of Glasgow in 142 AD.
Q226 Chairman: I am anxious you should
catch your train!
Lord Jones of Birmingham: I am
sorry, Chairman.
Q227 Mr Weir: Going back a step from
the accession, the Customs Union exists at the moment and obviously
it has helped promote UK-Turkey trade but we have heard there
is a great many issues in the implementation of the Customs Union.
How much greater could the trade be if these issues were overcome?
Lord Jones of Birmingham: The
issues in the Customs Union?
Q228 Mr Weir: Yes.
Lord Jones of Birmingham: Significantly.
The first thing about the Customs Union to say is that it has
been a success in two ways: it has knocked down tariff walls and
it has increased trade and activity already. It was signed in
1995 and went into operation in 1996. We are 12 years on and there
has been a significant increase. There is another way of course
where it has talked about where and how Turkey trades with other
nations outside the European Union. That is one aspect of the
Customs Union and it has been a useful way in which the trading
relationship between Turkey and third parties and the European
Union can be regularised, and I think that has had an effect.
There have been significant problems with it. It does not deal
with services, it does not deal with base agricultural products
(not added-value agricultural products but base ones) and that
is a big thing especially with services in Britain, and France
would argue of course it is a big thing for their agriculture,
so there are certain areas that are outside the Customs Union
which it would be nice to see inside, to be fair, and that would
change things significantly for Britain with services. Secondly,
there are special things where Turkey has basically not implemented
aspects of it. The problem we have currently with spirits is a
good example. How much would that change? It would do two things:
a) it would increase the volume significantly; and b) it would
put up a very big sign of the fact that both sides are serious
more then they are just playing at it.
Q229 Mr Weir: Do you think that the
difficulties with the Customs Union are linked to the lack of
progress, if you like, in the accession negotiations? Do you think
if there was more progress and the EU was seen to be pushing further
forward the accession negotiations that some of the difficulties
of the Customs Union might be more easily overcome?
Lord Jones of Birmingham: I think
that is an excellent point and the answer is yes.
Q230 Mr Weir: You mentioned also
that the Customs Union deals with how Turkey deals with third
parties. One of the concerns expressed by Turkey is that it is
forced to adopt the EU's tariff levels with third countries even
though it has no formal role in negotiating them and that seems
to be a matter of some concern. As Turkey's economy expands, the
implications of the problem grow, so is there any prospect of
Turkey being able to participate in these negotiations prior to
joining the EU?
Lord Jones of Birmingham: Prior
to joining? I was going to say no but I would guess that if we
were on the short strokes of joining I cannot see any reason why
they would not be allowed to then.
Q231 Mr Weir: But that would mean
that it is not until they are on the point of joining?
Lord Jones of Birmingham: Two
or three years before, yes.
Q232 Mr Weir: You have already said
that it could be many years in implication before they join, so
this situation is not likely to be resolved in the near future?
Lord Jones of Birmingham: I agree.
Q233 Mr Weir: Has it the potential
to derail relations between the EU and Turkey?
Lord Jones of Birmingham: No.
Q234 Mr Weir: You do not think so?
Lord Jones of Birmingham: No,
it is in Turkey's interests that she continues to reap the benefits
of the Customs Union and it is in Turkey's interests that she
keeps her bat at the crease in terms of negotiation on joining
the European Union. I just think that if the European Union were
to accelerate the negotiations for membership there would be a
bit more moral high ground when we then ask Turkey to comply with
certain aspects of the Customs Union.
Q235 Mr Weir: The CBI said to us
that there is movement on change in the Turkish trade laws and
in fact they thought there could be a more level playing field
for foreign businesses operating in Turkey compared to domestic
ones. Do you know anything about this? Can you tell me any more
about it?
Lord Jones of Birmingham: I have
been told what the CBI has said. I do think that that is not the
only issue. We need a legal system in Turkey that is certainly
more speedy, certainly more easily understood, and certainly more
dependable on consistency. I think that is as big a problem. If
the CBI were talking about that when they were talking about trade,
then I am with them. Trade is one issue but it is not the one
that everybody should concentrate on; there are one or two others
as well.
Q236 Mr Weir: Is the implication
of what you are saying about consistency that there is a problem
irrespective of what the law is in Turkey about it being implemented
on the ground in a consistent manner?
Lord Jones of Birmingham: If you
talk to a business about getting wrapped up in a contractual dispute
involving the courts in Turkey, the first word they will say is
`slow'; the second word they will say is `inconsistent', so the
answer to you is, yes, there is a problem. This is one of the
issues you always have if a country ever gets to this stage. I
am sure that people will say, "I did not have a problem here,"
so what you have got is perception. You might have reality but
you have certainly got perception. Either way it is damaging to
a country.
Q237 Mr Weir: According to the CBI
the new bill in the Turkish Parliament encompasses a scrapping
of double taxation for foreign investors, more transparency and
justice as regards competition, as well as strict adherence to
European Union regulations on auditing and clearer means of launching
companies and a clearer definition of legal status and holdings
I get the impression from you that irrespective of what that says
it may not work that way on the ground in Turkey. Is that a fair
comment?
Lord Jones of Birmingham: Turkey
has made enormous strides in the last few years and she continues
to and that is good news. Firstly, does it take longer to implement
and get it working than when they pass the laws? Yes, and business
of course deals with it day-to-day on the street. Secondly, even
some of the things when they are done and they are working, does
it throw up a perception that it is not the place to go because
it does not work? Yes. Is it unfair on Turkey? Probably yes, but
they are the ones who created it in the first place by needing
to change. There is one thing I find when I talk to Turkish businessmen—and
I do a lot—and that is we must be very careful (I do not
mean we Britain, I mean we the European Union of sitting there
saying, "You put this, this, this and this right and you
can come into our club," and at the same time, as we all
arrogantly say things like that, they are too polite to say what
they should say which is, "And of course you are perfect,
aren't you?" whether it is Romania and Bulgaria who have
a long, long way to go to start complying with everything that
Brussels asks them to do, frankly, we all know it and there are
certain very, very major developed members of the European Union
who still think that compliance is a voluntary event, and far
be it for me to tell you who they may be.
Q238 Mr Weir: I think we can all
guess!
Lord Jones of Birmingham: Even
we—and we are better behaved than most—are not perfect
and we still need to do better as well. It worries me sometimes
that we all sit there in our ivory castle as members of the European
Union saying, "You do all this," in our arrogant way,
and Turkey sometimes could turn round and say, "Actually,
have we got a mile to go, yes we have, but you have got a fair
few yards to go as well."
Q239 Mr Weir: Given your previous
comments about the Customs Union, is it also the case that the
paper changes might become more real if there was real progress
towards actual accession to the EU?
Lord Jones of Birmingham: Absolutely
right.
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