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Lord Hurd of Westwell: My Lords, many of us welcome the impending visit of the president because we strongly favour substantial friendship between Britain and Argentina, including practical arrangements where necessary as regards oil and fishing licences in the South Atlantic. But I welcome the noble Baroness's reply when she made clear that questions of sovereignty over the Falklands are quite a separate matter. As she said, Her Majesty's Government, in line with the policy also of the previous government, do not intend to negotiate or discuss that sovereignty with the Argentine authorities.

Baroness Symons of Vernham Dean: My Lords, when we invited President Menem, we made it clear that the visit would not be an opportunity to discuss the sovereignty of the Falkland Islands but should rather focus on the strong bilateral relationship between the two countries. We see eye-to-eye with Argentina on a wide spectrum of international issues, as the noble Lord, Lord Hurd, indicated. We worked together in the United Nations on peacekeeping operations and we have been working together to co-ordinate the international response to nuclear testing in India and Pakistan, among many other issues.

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Viscount Waverley: My Lords, does the noble Baroness believe that we can retain our capability with a reduced presence without undermining sovereignty issues?

Baroness Symons of Vernham Dean: My Lords, we reduced the military presence in the Falklands with the construction of the airport at Mount Pleasant in 1986. But the islands are currently defended by a garrison comprising air, sea and land assets. We believe that those are maintained at the minimum size required to guarantee their security.

Viscount Montgomery of Alamein: My Lords, in connection with bilateral relations, is the noble Baroness aware that this is the first visit by an Argentine president since 1961 and therefore some may consider it long overdue? Secondly, does she agree that since the restoration of commercial relations in 1989, our trade has increased quite spectacularly from a position of zero to something which is growing very quickly indeed in both directions.

Baroness Symons of Vernham Dean: My Lords, I realise that it is the first visit since the time that the noble Viscount has indicated. Everything that he says about the importance of the commercial and trading relationship is true. Argentina is now our second largest market in Latin America ahead of Mexico and Chile. In 1997, Argentina was one of our fastest growing markets anywhere in the world. In that year, it imported 0.5 billion worth of British goods into the country. Moreover, it is a key member of Mercosur, and in our role in the EU, we have been prominent in promoting a greater interchange between the EU and Mercosur.

Lord Kennet: My Lords, obviously my noble friend the Minister is well aware that the Argentinian Government have been saying to their own people that they expect to be able to settle all their difficulties with this country about the Falklands during the forthcoming visit. Therefore, how do the Government regard this statement, when laid alongside the statement that my noble friend has just made as regards our willingness to discuss sovereignty?

Baroness Symons of Vernham Dean: My Lords, there is a world of difference between President Menem restating Argentina's position on the Falklands and our entering into any sort of negotiations. President Menem has a right to restate his position on the Falklands, but we do not intend that there will be any discussion of the issues. We remain firmly committed to the islanders' right of self-determination. They continue to tell us unequivocally that they wish to remain British, and the Argentinians are well aware of our position.

Lord Moynihan: My Lords, I welcome the reply that the Minister gave a few moments ago. However, in response to President Menem's suggestions on shared sovereignty, could the noble Baroness elaborate a little further as to exactly how the Government will seek to

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reconcile the wishes of the Falkland Islanders with the promotion of a constructive relationship with Argentina as an important trading partner of the United Kingdom?

Baroness Symons of Vernham Dean: My Lords, there are many things to discuss other than the sovereignty issue which, as I said, is not up for discussion. Indeed, I believe that I have been as clear on this as I can. We fully expect President Menem--no doubt for his own domestic reasons, given the Argentinian position on the matter--to state his position in relation to the Falklands. However, that does not mean to say that there will be any negotiations on that issue. Of course, there are many other issues that we shall be discussing. For example, we discussed a few moments ago the importance of trade. Moreover, the noble Lord, Lord Hurd, talked about oil and we shall discuss fisheries. There are a number of important issues in the area and a number of very important international issues, which I detailed in my supplementary answer to the noble Lord, Lord Hurd. That will make a very substantial agenda during the visit of President Menem.

Lord Ironside: My Lords, can the Minister say whether anything will be discussed about the removal of landmines which now litter the Falkland Islands, and whether Argentina will be able to contribute towards solving that particular problem?

Baroness Symons of Vernham Dean: My Lords, the Ottawa Convention, as now enacted, requires us to de-mine all areas under our jurisdiction, and that includes the Falkland Islands, within 10 years of the legislation entering into force, unless we can show good reason why we should not do so. Such reasons might include humanitarian, environmental, financial and technical considerations. There are problems with de-mining the Falklands. There are many mines on the island and, bearing in mind the terrain, the enormous number of mines and the problems with the peat, in which many of the mines are embedded, there will need to be technological solutions. We propose to carry out a British-led study into the feasibility and the costings of de-mining the Falklands. We are currently considering how this might best be financed and carried out.

Lord Wallace of Saltaire: My Lords, can the Minister assure the House that transport links will also be on the agenda--that is to say, access directly from the Falklands to Argentina and open travel in both directions? After all, that has been one of the more difficult issues to arise thus far.

Baroness Symons of Vernham Dean: My Lords, it is a difficult issue. However, it is a matter for the Falkland Island's Government. Their policy to date is that Argentine passport holders are not permitted to visit the islands. We have encouraged the islanders to consider broadening the range of contacts between themselves and Argentina. We believe that the process of reconciliation and the development of mutual understanding would be helped by more interaction between the two communities. But that would in no way compromise the sovereignty of the Falkland Islands.

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Iran: ECGD Cover

3.23 p.m.

Viscount Waverley: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I should declare that, this week, I was appointed chairman of the British Iranian Chamber of Commerce.

    The Question was as follows:

    To ask Her Majesty's Government whether they will introduce ECGD (Export Credits Guarantee Department) cover for Iran; and, if so, when.

The Minister of State, Department of Trade and Industry (Lord Simon of Highbury): My Lords, Iran is a difficult market to assess, not least because of oil price uncertainty. However, my right honourable friend the President of the Council when President of the Board of Trade, announced that ECGD has reintroduced insurance cover for capital goods and services contracts concluded on cash payment terms and short-term reinsurance capacity for private sector insurers of consumer goods exports.

Viscount Waverley: My Lords, I thank the Minister for that Answer. However, while that is welcome as a first step, it falls short of the much-needed full cover which currently France and Italy offer, and which Germany will soon be offering. Therefore, will the Minister undertake to monitor the situation? Further, is the noble Lord aware that, procedurally, our visa regime is practically unworkable? That causes considerable difficulties. Is it not now high time to exchange ambassadors in what is potentially Britain's largest single market in the Middle East?

Lord Simon of Highbury: My Lords, perhaps I may, first, congratulate the noble Viscount on his appointment. I am sure that that will do a great deal for relations and the trade that we want to build up with Iran. However, in response to the noble Viscount's two questions, it is important to point out that the cover already announced will facilitate some valuable trade and that this will be broadly welcomed by exporters. As I said, the Government are keen to encourage trade relations but there are a number of steps that we will have to take before full cover is reintroduced. That is largely to balance the interests of taxpayers and the trading opportunities. I believe that that is the right first step on the road, but it is to be hoped that there will be more to come. As regards visas, I agree that there is work to be done to smooth the procedures which are not yet what we would like them to be.

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