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Lord Clinton-Davis: My Lords, if my noble friend will give way--I do not wish to take his time--I have one point to make. The appropriate venue for argument of this kind is unquestionably the International Civil Aviation Organisation. The Americans have refused steadfastly to allow that to happen. Therefore, that is an important element to the background and why I think that the sanction proposed is totally disproportionate.

Lord Montague of Oxford: My Lords, as I said before, we are lucky to have in the House a noble Lord with the knowledge and experience of my noble friend Lord Clinton-Davis. He is right. However, it does not invalidate the point I make: that however unfair it may be that America should have this approach, it is a fact, however unreasonable, that the matter has to be decided one way or another this coming weekend. I know from experience of confrontations in which I have been involved from time to time that once one starts to lose--however unjustifiably--it is hard to recover. I put it another way. If for some reason Concorde does not fly next week, it will not necessarily be an easy or quick process to have Concorde flying again.

The British public do not have a detailed knowledge of the disputes surrounding the issue of bananas. They cannot have a detailed knowledge of the nuances of the dispute about hush kits. They will be told by the Americans that their hush kits satisfy the sound regulations which are about to come into being. The British public will find the position difficult to understand. They may not know what a hush kit is.

There are two sides to every story. It is important that we do not have a huge blaze of publicity next week about Concorde no longer flying because that will be misrepresented to and misunderstood by the British public at a time when I suggest that these issues require us to stay cool, as we are in this House today.

I comment on a further aspect of the hush kits which supports an important point made by the noble Baroness, Lady Williams. She referred to the importance of our understanding that, unlike in the Union where one can direct these matters almost exclusively to the heads of government and governments themselves, that is not the case in America. It is interesting that as recently as 15th April the threatening letter on this subject did not come from the Administration but from the chairman of the trade committee in the Senate. It covered not only the issue of the Concorde, but raised the spectre of other restrictions relating to aircraft movement. Therefore, I fully support an awareness in this House of the pressures coming from America. Perhaps the Foreign and Commonwealth Office should consider how we could have a closer dialogue with the Congress and Senate in order to achieve a more intimate understanding of the problems that we must face.

On that basis, I turn to beef. We face a problem which is partly of our own making. I am somewhat critical that we are unable to do a sufficient amount about it. I refer

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to the public mistrust in what is said by government and authority in relation to our food products, including meat and genetically modified foods in particular. It is agreed that it is necessary to have a food standards authority in which the public can have confidence. Indeed, there has been consultation about the appropriate Bill to come before Parliament, but where is it? It is ready, so why is it not here? We are told that there is insufficient parliamentary time. That may be the case, but I was interested to hear the noble Baroness, Lady Miller, say that we would have the good fortune of retaining the noble Lord, Lord Clinton-Davis, as a Member because he is not a hereditary Peer. There has been a complete acceptance of the fact that our good friends, the hereditary Peers, are to depart. I raise that issue because the provision of three days to discuss hereditary Peers, with the suggestion of an increase to six, is one of the reasons why we have insufficient parliamentary time.

We shall spend much time hearing the same old speeches as we heard yesterday over and over again. If someone has something new to say, for heaven's sake, let them say it, but we do not want repetition. The BBC broadcasts a programme called "Repetition" and I have never heard so many Members who are eligible to participate in it. Please, let us get on with our business and get the food standards Bill before Parliament so that we can have people leading it in whom the public have confidence. They can begin to learn the real issues relating to genetically modified food and beef.

Finally, I wish to comment on the understanding of our American friends, about whom we are somewhat critical. They are negotiating not only with the European Union but in particular with Japan. I am not so sure that their tactics towards Japan can be applied to the Union. I know Japan very well; I cannot say how many times I have been there. The Japanese do not understand nuances because of language and cultural problems. Unless you make it absolutely clear to the Japanese what you are going to do, almost under threat, they take no notice of you at all. That is a lesson that the EU should learn when it negotiates with the Japanese. It is no good issuing small, subtle threats--they cannot hear. However, that is not the way to treat us in the European Union and perhaps that is one of the mistakes that America is making at this time.

I heard reference to the problems in America as regards sugar. It is true that the Americans do not grow bananas, but they do grow sugar. They passed the Laurel/Langley Act in attempt to protect their sugar industry. I have a business in Hawaii and I know that the Hawaiian sugar growers have been devastated by the issues relating to the import of their sugar under the same circumstances as relate to bananas. They have had to deal with them while facing the criticisms made in relation to bananas. Therefore, we must take a slightly broader view of some of the issues that face America.

I conclude with the European Union and Sir Leon Brittan, for whom we all have immense regard. He has done a wonderful job and deserves great credit. But we have lost. Sometimes, it is advantageous to have a change of leadership when the rhetoric can be softened. I do not know whether Sir Leon will be reappointed.

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Perhaps there will be a reshuffle, but I believe that it is time for a different person to face with skill and alacrity the issues involved in our trade relationships with America.

4.56 p.m.

Lord Wallace of Saltaire: My Lords, I declare an interest as an adviser to the Trans-Atlantic Policy Network for some years. The group is concerned with the linkage between trade and security relations with our American friends and with bringing together parliamentarians, officials and businessmen, who often talk past each other, not with each other.

I want to talk about issues which go wider than those relating to bananas. I agree with my noble friend Lady Williams that there are other ways of helping the small island states in the Caribbean than the deeply inefficient means of subsidising them through banana quotas, and we should now be turning to them. What is most worrying about the current state of trade relations between Europe and the United States is that the world economy is so fragile. With the downturn in east Asia, the US/European relationship is the key to maintaining an open international economy. In the United States, conventional wisdom on the world economy and the ways in which the US and European economies are developing differs widely from conventional wisdom among economists, politicians and businessmen in Europe. The banana dispute is a symptom of our underlying differences; it is not a cause.

The current American mood is worrying; particularly, but not only, in Congress. We are back to American economic triumphalism, but with an underlying mood of aggression about the Europeans. We have an American boom which has gone on for some time, driven by a rise in asset values, and which now includes a negative savings rate. It is a fragile basis for continuing prosperity. Partly as a result of that, from a European perspective there is a widening US trade deficit. However, as the noble Lord, Lord Grenfell, said, thankfully, under difficult conditions for the world economy, that US deficit has helped to maintain a degree of economic growth in east Asia. The United States has been the world's importer of last resort, and Americans complain bitterly that western Europeans should have done more to reflate European economies in order to take up more of the slack in the world economy which followed from problems in Indonesia, Japan, Malaysia and elsewhere.

This is the seventh year in which the European economies as a whole have run a substantial trade surplus with the United States. There is a rising rumble of complaint within the US Congress over that, indeed, an argument that that in itself is evidence that we must be protectionist. There is a perception of a European "output gap" which follows from our low growth, from our socially protectionist practices. They argue that we should have reflated, reformed, opened up rather more.

The American perception is also that Europeans are dragging their feet on eastern enlargement, which is not only an economic objective but also a political and security objective which we and our transatlantic allies

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share, and doing so for domestically parochial, protectionist reasons. Above all, in the American view, we continue to be protectionist in agriculture. We should in no way underestimate the extent to which American aggression against the Europeans in trade matters is driven by the perception that the European Community continues to be protectionist in agriculture. In this respect the failure to agree on Agenda 2000 in Berlin was a serious setback. One can only be deeply critical of the French Government and the French President in particular for that failure. I am told that there are several hundred thousand beef producers in 48 of the 50 states of the United States. The beef dispute will make the banana dispute look rather small.

In addition, one finds in the United States a confidence that it has built up a clear technological lead (above all in information technology) over the last 10 years, combined again with an aggressive determination to maintain that lead by ensuring that international standards, for example, for e-commerce, encryption and third-wave wireless telegraphy, fit in with American rather than European interests. There is a concern to maintain its lead in biotechnology, and particular concern that European pressures on biotechnology and in genetic engineering would disadvantage American companies. All this is accompanied by a sense that the United States is carrying the global security burden as well, very clearly evidenced by what is now happening in south-eastern Europe.

From our side we see the United States also in a rather jaundiced fashion. We despair of the style of Washington politics, of a weak presidency and deeply parochial Congress in which a substantial proportion of congressmen do not even have passports, and of a desperate search for campaign finance which gives enormous power to American lobbies. One talks about some of the difficulties we have here, not only in agriculture but also in energy. Energy companies in the United States have been fighting up a very active campaign against the United States accepting the implications of the Kyoto Protocol on global warming. We have ethnic lobbies fighting on sanctions. We have American airlines fighting for open skies in Europe but trying to prevent European airlines having equal access in the United States. There is, altogether, a preoccupation with their own domestic imperatives accompanied by an inability to recognise that European governments also suffer from domestic constraints.

European economists point to our higher savings rate and to our different stage in the economic cycle to justify our difference of approach. Our governments also point to the scale of European economic assistance to central and eastern Europe, Russia, the Ukraine and also to Turkey and the Middle East to demonstrate that we are sharing a considerable amount of the burden. Yet overall the European response is muffled and confused, which makes it even more difficult to get our case across in the noisy and crowded agenda of Washington politics.

What should we be doing, both in the United Kingdom and in the European Union as a whole, at what is a very sensitive period in maintaining an open world economy when a downturn in the American stock

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market, a hesitation in the continued period of American growth, could easily lead to some very severe trade disputes, a surge of protectionism within the US Congress, and thus threaten world growth as a whole? I do not think we need any new grand transatlantic initiatives, certainly not the New Atlantic Initiative beloved of the noble Baroness, Lady Thatcher, and others, nor the Transatlantic Free Trade Area, TAFTA, of which a US congressman remarked to me the other week that, since it sounds like NAFTA and they do not like NAFTA anyway, it loses support before it has left the ground. I am not even sure that the New Transatlantic Agenda has taken us too far.

But we clearly need very active engagement in conflict prevention on difficult new issues, on all of the questions of standards now coming up, on e-commerce and genetic engineering; we need a scientific dialogue on a whole host of new issues. The Transatlantic Business Dialogue has been particularly valuable in this respect.

There are other awkward issues coming up. As the Minister will be well aware, the divergence of European and American perceptions on energy use and the importance of the environment and global warming is extremely worrying. I am fascinated and rather depressed by the very odd combination of ethnic lobbies for security and oil company interests in central Asia that we now see driving Washington policy and, as I saw in an article last week, providing vast new sums for Washington lobbyists paid for by the governments of Azerbaijan, Kazakhstan and others.

There are plenty of areas in which it is easy for us to misunderstand each other and to talk across each other. We need therefore to make much greater efforts to explain our justifiable differences of perspective to US audiences. I welcome the European Commission's efforts to set up new centres of European studies in the United States. I welcome the German Government's efforts to fund centres of German and European studies around the United States, on the west coast and in the south as well as on the east coast. I wonder whether the British Government should not be thinking of providing more scholarships for potential American scholars and policy analysts to come over here, just to make sure that we do cultivate a new generation of American scholars who know rather more about Europe. We clearly need much more active and combined European efforts to engage with Congress as a whole and to try to persuade more US congressmen to understand European perspectives. We need also to accept that there is in American policy-makers' minds a linkage between security and economics, so that the European defence initiative (which I welcome the British Government pushing forward) is an important part of the European response.

Above all there is a need for the European Union and the European Central Bank to develop a more positive approach to international, economic and monetary policy. The European Union is now a key player in keeping the world economy open and prosperous, and we should not take it for granted that the world economy will remain open and prosperous without active

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engagement by European governments. We have the world's second reserve currency; we are now the largest grouping in world trade. The European Union and its member governments are in many ways still rather parochial, the European Central Bank a good deal more so, as Willem Buiter said yesterday.

From the American perspective, the confusion of West European representation in the various fora in which we meet the Americans is pretty disappointing. One turns up to G8 to find four European governments, the European Commission and often the Presidency from another state, all attempting to distinguish themselves from each other and insist that they are rather important. We could get our act together rather better. I regret that the United Kingdom sadly remains a rather marginal player, as it will until it joins the single currency. I hope that at some point--although naturally the Minister will not be able to say anything at all on this--that marginalisation will resolve itself with British membership of the single currency. I merely wish to urge with all the force I can that what we need is a more active and more coherent European approach to our partner and ally, the United States, in sharing the burdens of world economic management, before the US stock market turns down.

5.10 p.m.

Baroness Byford: My Lords, seen from the point of view of agriculture, trading relations cover the transfer of goods--that is, the rules of entry--the labelling of goods, the content of goods and the final sale of goods. There are also the complications caused, for example, by the Lome convention, to which other noble Lords referred earlier, but I feel sure that that latter aspect will be covered by minds more legally tuned than mine. Therefore, I make no apology for sticking to food glorious food.

Wider implications have been debated very well by noble Lords this afternoon. They have made extremely valuable contributions. The World Trade Organisation wants to create a level playing field in which the exchange of goods is made easy. The EU and some opinions in Britain want to ensure that our native populations retain that element of control over what they eat.

The CAP reform, about which other noble Lords have spoken earlier and to which I add my concern, was too little and with the coming enlargement of the EU we shall have greater difficulty when we come to negotiate in the next round of the WTO.

At present, the main threat appears to be meat which is produced using growth-promoting hormones. Those hormones, produced synthetically, were banned from UK farming in the early 1980s to comply with an EC directive. The ban related to the risk of cancer because it was said that hormones had been found in food at toxic levels. There are those who insist that because all meat contains natural hormones the risk from synthetic ones is very slight and it will be difficult to monitor in any event. However, I understand that the Meat and Livestock Commission has produced a DNA test which

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can tell the difference. What arrangements are the Government likely to make to carry out the necessary tests in the event of large-scale imports of US meat?

The second major threat appears to be the synthetic BST hormone used legally by a large number of American farmers to boost their milk production, as my noble friend Lady Miller mentioned earlier. The scientific committee on veterinary measures relating to public health has stated that artificial BST seems to increase the presence in milk of another hormone which has been linked to breast and prostate cancer. I need hardly remind your Lordships that those two diseases hold particular terrors for most of the population. Synthetic hormone BST has been banned in Europe since 1989 but that prohibition runs out later this year.

The third major area is genetically modified organisms such as soya, to which other noble Lords referred earlier. No one can surely have missed some of the arguments surrounding that subject; nor can anyone be unaware that there are strong differences of view particularly between the manufacturers, the major users and the consumers. As other noble Lords have said, there is great concern on the part of the buying public. I am not aware of specific disease implications but I know that great concern has arisen over the realisation that animal feed is not controlled in any way. I need hardly remind your Lordships of the consequences of our last cattle feed disaster.

One way, and many would say the most logical way, is to label all foods, whether imported or home grown, so that it is made crystal clear that there has been tampering with nature. Unfortunately, our American friends wish to restrict information to a fairly bland assurance that all ingredients have been approved by the US Food and Drug Administration. It will be interesting to know on what grounds that organisation is so sure of its approval of GM and hormone additives. Perhaps the Minister will let noble Lords have details of that. If he cannot do so today, perhaps he will write to me on the matter.

On 15th April, the Financial Times highlighted the problem when its leader article read:

    "Top buyers in US spurn modified corn". The article began:

    "Archer Daniels Midland, one of the largest US agri-businesses and a leading corn processor, yesterday said it would not buy or trade any genetically modified ... corn which had not been approved by the European Union". Later, the article went on to say that that,

    "means that two leading corn buyers in the US have decided to cold shoulder non-EU approved corn--at least for the time being--in an attempt to avoid trade problems". Until that point has been resolved to the satisfaction of both parties, I fear that we shall be subjected to a concentrated campaign on both sides of the Atlantic. That campaign is clearly in place and is designed, I fear, to force us, through the WTO, to accept what the Americans themselves are beginning to doubt. Unfortunately, we in the UK and our partners in Europe seem unable to get our own act together to produce a clear and a unchallengeable code for labelling all agricultural products.

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Were we to agree such a code, we should also have to devise and put into place methods of monitoring the actual content of food items on the shelves. There are agricultural colleges, institutes, bodies like the Meat and Livestock Commission, university departments and even health charities which are doing valuable work in analysing the constituents of food. Do the Government have any plans for unifying those various approaches in anticipation of a European labelling code?

I believe that a unified labelling code and a cogent monitoring system would restore the faith of British shoppers, and those outside Britain in the goods that they buy. It should improve also the image of British farming and, it is hoped, improve the margins in that beleaguered industry. Other countries would be required to sing from the same hymn sheet if they wished to see their goods on our shelves. Consumers would thus be in a position to indicate quite clearly whether their concerns over the scientific advances in nutrition were deep and lasting or merely media-driven and transitory.

Such an approach should obviate the need for mutual bans of bananas, beef, pig meat, poultry and, today, added to that list, batteries and bath products. It should encourage consumers to exercise their taste buds in the certain and sure knowledge that anything that they take from the shelves is what it says it is. That atmosphere of trust could only improve trading relations all round.

I thank the noble Lord, Lord Clinton-Davis, for giving us the opportunity this afternoon to discuss those very real problems and thereby indirectly to assure our American partners that it is not a personal issue. As English-speaking countries with a long history of co-operation and mutual understanding, we need to solve our differences in a way which reinforces those freedoms, particularly freedom of choice, for which we have fought side by side in the past.

This debate has underlined how important the coming WTO discussions will be to both the EU, America and to the world at large. Farmers, like any other business, need to look to the long term. In a world where many are short of food, it is essential that future agreements are clear, understood, and to the benefit of us all.

5.18 p.m.

Lord Puttnam: My Lords, I too thank my noble friend Lord Clinton-Davis for introducing this timely and very important debate.

At the outset, I should declare an interest. For more than 20 years my company has received financial backing from the American entertainment conglomerate, Time-Warner. Over the course of my career, perhaps as much as 75 per cent of my income has been derived from revenues earned in the United States.

The United States has also had an enormous impact on me in other, less immediately tangible ways. As a boy, I would sit in the darkness and soaks up the influence of American films like Fred Zinneman's "The Search", Elia Kazan's "On the Waterfront", or Stanley Kramer's "Inherit the Wind".

As a result of the quite intoxicating impact of those movies, the day I first went to America, in 1963, was, in many ways, the most significant day of my life. Part

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of me was coming home. Far more than any other influence, more even than home or school, my attitudes, my dreams, and my preconceptions have been shaped irreversibly by the optimism and the sheer zest of the United States. So I am in no way hostile to that remarkable country; nor do I believe in any kind of organised conspiracy theory, leading to cultural or commercial imperialism.

It is 30 years since the French media entrepreneur, Jean-Jacques Servan Schreiber, published his seminal text The American Challenge, brilliantly anticipating Europe's economic decline in the face of the overwhelming penetration of American goods, ideas and services. As he put it,

    "The confrontation of civilisations will now take place in the battlefield of technology, science and management". He concluded that,

    "The war we face, will be an industrial one".

Perhaps I can illustrate just how prescient Servan Schreiber turned out to be. Rather than joining other noble Lords in going bananas, I shall focus on the industry that I know best, the movie business. I hope that the House will find what I have to say relevant and informative.

Almost since cinema began it has been dominated by the United States. From the start, the Americans developed a trust in and a respect for the cinema audience. They imaginatively exploited each and every advance in the technology of cinema. They have shown an unerring ability for finding and telling good stories and, for the most part, they have attempted to challenge as well as please their audiences.

In contrast to the European industry, the American industry has also consistently lobbied a thoroughly receptive government for policies that would be likely to guarantee the survival and good health of their businesses throughout the world.

One hundred years later the effects of such single-mindedness are all too tangible. The audio-visual business has for some years been the United States' second largest export earner. For reasons that I shall attempt to explain, it is almost certainly its most enduring and most important. The imbalance of payments between Europe and the United States in this sector now runs at over 7 billion dollars a year. At present rates of growth that, in very short order, will undoubtedly cross the 10 billion dollar mark. From a European point of view, at some point those numbers become simply unsustainable. We cannot grow a European economy, create European jobs or any form of sustainable European future without addressing those issues in a farsighted and thoroughly comprehensive manner.

This is probably a naive observation in the context of this debate, but surely the whole point of world trade is to create some form of visible equilibrium, or at least to have that as your long-term objective. When the implications of such dominance are considered in broader terms, they become quite alarming.

Today's movies are really "brand names". Every single film put out by the Hollywood studios is, in its way, its own brand which, when successful, becomes a

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locomotive dragging behind it many other sectors of the economy from fashion to fast food, books and video games. An entire panoply of other products and services latch onto the back of a successful movie. The film "Titanic", for instance, generated over a billion dollars around the globe from box offices outside North America and has sold a staggering 24 million units on video, 40 per cent. more than the previous record holder, "Jurassic Park". As a consequence, "Titanic" will probably generate several billion dollars more on the back of other commercial activities drawn along in its wake.

As many in this House will realise, it is an industry which brings incalculable benefit to the US by promoting American products, styles, values and fashions all around the world, 24 hours a day, seven days a week, every single week of the year. Now, new hybrid sectors of the audio-visual industry are emerging, containing a potential for growth which already makes them more commercially important than the traditional feature film industry.

By contrast, the film industry in Europe has tended to be defensive and inward-looking, rather than outward-looking and confident. There is absolutely no doubt that the health of the so-called "creative industries"--those industries built around intellectual property, of which film is just one part--will, increasingly, become one of the keys to success as we enter the information age of the 21st century. That will be an era in which the global economy will increasingly be driven by two things: information and images.

In these circumstances, it should be a matter of the greatest concern that America's extraordinary dominance in the field of films, television and the moving image generally continues to intensify. That concern is heightened by the fact that the Americans are already light years ahead of us in terms of internet-based entertainment and information. The development of the information society, and its potential to increase further the commercial and cultural domination of the United States, raises the real prospect of a fundamental dislocation between the world of the imagination, created and stimulated by the moving image, and the everyday lives of ordinary people around the globe.

Frankly, we have no idea what the consequences of such a dislocation might be, for it is genuinely without any form of social precedent. However, it is surely no exaggeration to say that it has the potential to be one of the cultural time bombs of the 21st century. The liberating and democratising possibilities of these new technologies must be realised in order that we all gain greater access to accurate information and perhaps an increasingly direct say in the way in which our communities and countries are run.

In January 1998, at the World Economic Forum in Davos, Hillary Clinton proclaimed that,

    "American culture is America's biggest export". She cited the examples of fashion, music and movies. Surely, that represents a challenge to which the rest of the world, and particularly the nations of western Europe, should rise, rather than truculently acknowledging that as some form of permanent force of nature.

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For some extraordinary reason, we in this country have grown up in a culture which is faintly embarrassed by success, and where taking part has been held to be somehow more important than achieving. When one asks an American how he is getting on, the traditional response is, "Great", "Terrific", or "Never better"! The British equivalent is likely to be, "Not so bad", or "Can't grumble" or "Surviving"! The latter is, of course, perfectly understandable in the case of one or two of our colleagues in your Lordships' House!

What other country could have devised national sports such as rugby and cricket? Cricket must be utterly unique in taking five days to play for a draw and rugby is surely the only sport in which, in order to move forward, the ball has to be passed backwards. Compare that to, say, American football. The objective is the same--to get the ball over the goal line as quickly and as often as possible--but the rules could hardly be more different.

In an era of rapid globalisation, we must recognise that, while we may prefer the attractive patterns and opportunity for individual flare offered by passing the ball backwards, the rest of the world is primarily focused on getting the ball across the line! We may be more stylish, but in playing to our traditional prejudices--good and bad--frequently we prevent ourselves being wholly successful.

The movie business in the US, for example, has taught me that government and industry work in partnership. That has been the case since 1917. As a result, the Americans have long been prepared for the next round of GATT negotiations, due to start early next year. More than that, they have a clear idea of where they want to be in 2005, and possibly even in 2020. I am sad to say that we, in Europe, have considerable uncertainty of where we were five years ago!

Please believe me that everything that I have said about my own industry is equally true of many other sectors of the economy. In his recent book, Business at the Speed of Thought, Bill Gates argues that,

    "if the 1980s were about quality and the 1990s were about re-engineering, then the next decade will be about velocity. Business is going to change more in the next ten years than it has in the last fifty". I suspect that he is right. That begs the question, can Europe adequately devise and implement the type of structures, delivery and decision-making mechanisms to compete in this rapidly changing commercial environment? One way or another, that is the challenge to which we must rise. In my judgment, that is what the future of Europe is all about.

5.28 p.m.

Lord Monkswell: My Lords, I am tail-end Charlie and although everything has already been said, not everybody has said it. I join those who have thanked my noble friend Lord Clinton-Davis for introducing the debate.

I wondered whether, as tail-end Charlie, I could add anything new to the debate. There may be one new angle. I refer to asking the question: What do we hope to get out of the debate and to achieve by it? We have

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heard some erudite speeches, explaining the situation and suggesting ways forward. It seems to me that we have problems both as regards the Administration and Capitol Hill in the United States of America and--dare I say this?--with those involved at the negotiating level of the European Union. The point that I should like to get across is that all those involved in the decision-making processes seem to have taken their eyes completely off the ball in terms of asking: What is it all about?

As has been said, if we go down the road favoured by the USA with regard to the banana regime, we must ask ourselves who will benefit. It will not be the banana-growers in the Caribbean islands or those in Central America. It will not be any American workers or any of the consumers in either Europe or the US. It will be the shareholders of an already well-off company. I should like to introduce the realism of what perhaps I may describe as "the ordinary guy". It is crazy to allow a situation to develop which will end up benefiting nobody. We need to recognise that. In a democracy, one of the ways in which we can try to tackle that is to get across the facts of the matter to the ordinary man in the street, the ordinary voter, whether in the USA or the EU.

Perhaps I may give my perception of what has been going on. For the past century the USA has intervened in one way or another in the small countries of Latin America, usually with disastrous consequences for their citizens. Why? It was usually at the behest of a large fruit company wanting to increase its profits or not to see its land taken for land redistribution among the landless peasants. Now those same fruit companies are demanding that their anti-social policies and activities, which have laid waste to the small countries of Latin and Central America, should be exported to the islands of the Caribbean which, by and large over the past few years, have developed a modus vivendi that enables their citizens to lead reasonable lives and to make a positive contribution to their own communities and the world. It is only when such facts are conveyed to the electorates of our democracies that the politicians will sit up and take notice.

One could cite a range of areas with equally difficult problems, but I went through that explanation of my perception of what is happening in the hope that our debate will appear on the Internet and that some people in the USA will thereby pick up on what has been said here and agree with it.

My experience of the USA is rather different from that of my noble friend Lord Puttnam. Yes, we all share a perception of the USA that has been gained from films and television programmes, but when I first went there a few years ago I was amazed to discover that it was not like that. Again, my political background may have coloured my perception differently from that of my noble friend. I had thought that the Americans were the bad guys, but when there I found that it was not like that. It was all rather different from the movie and TV image. I have met some really terrific people in the US. It is those decent citizens, those decent democrats, to whom I am speaking when I say, "You need to do something about your political system. We have

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problems on this side of the pond and we are doing what we can to sort things out". Indeed, some of those matters arose in our debates yesterday. That is the message that we need to get across. We need to build a communication link and to highlight the good things.

I have been concerned in this debate by the misconceived polar extremes of free trade or protectionism. We need to recognise that protectionism or isolationism is not socially useful; but neither is free trade. Free trade without regulation will lead to a social, economic and environmental disaster.

I was pleased to hear the Conservative spokesperson saying that we should inject into the World Trade Organisation the concepts of society, the environment and social policy. That is important. I wonder whether the current rules of the WTO make any sense at all. I am not familiar with all the details--I am not an expert--but it appears that the WTO is saying that a small number of people in the Caribbean can have their livelihoods taken away from them and that that is perfectly legitimate. Any organisation that says that that is legitimate needs to be questioned. We need to say, "It is not legitimate to take away people's livelihoods". I am also concerned by the argument, "We can give them some compensation". That is rather like saying, when making people in this country redundant, "It is all right because they can have unemployment benefit". It is not all right to render people unemployed and to give them no opportunity to work, to fulfil themselves or to contribute to society. If we do nothing else, we must recognise that.

Earlier, noble Lords asked what the result of all this will be. We can forecast the result. There will be the cultivation and peddling of drugs and an upsurge in piracy in the Caribbean area. We know that that will happen because wherever there has been economic dislocation, criminal activity has been generated. It is not just a question of providing financial compensation. We must ensure that there is work for people to do. If, in the next few months and years, we do not inject into the WTO the legitimate demand of ordinary people that it should service their needs and ensure that people have jobs and a decent standard of living and that the environment is not degraded, the world will be a worse place and all of us will suffer as a consequence--not just in the UK or the EU, but also in the USA, Canada and all other parts of the world.

We have been discussing a serious topic and I hope that our debate can inform the Government and those who will be negotiating on our behalf so that, however they come to their conclusions, those conclusions actually mean something to ordinary people throughout the world.

5.40 p.m.

Lord Razzall: My Lords, in winding up from these Benches, I join other noble Lords in thanking the noble Lord, Lord Clinton-Davis, for introducing this extremely important subject tonight.

Having listened to a number of noble Lords, I should first like to express concern at the anti-US feeling that crept into many of the speeches. There can be no doubt

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that since the Second World War US economic policy and the US economy have been the motor of world economic growth. This House must recognise that. In that context, the US-European economic relationship has clearly been one of the great successes of the post-World War Two era. The American-European economies together probably make up more than half of the world GDP. As the noble Lord, Lord Clinton-Davis, indicated, trade between the European Union nations and the United States exceeds 1 trillion dollars a year; and it is probably true to say that 95 per cent of Atlantic trade investment takes place without any of the difficulties on which many noble Lords concentrated this afternoon and this evening.

As an aside, it was interesting in this week of changing Conservative Party policies to listen to the speeches of the noble Baronesses, Lady Miller and Lady Young, both of whom indicated in the tone and content of what they said the end of any suggestion of a North Atlantic trading organisation as an alternative to the European Union so beloved by the noble Baroness, Lady Thatcher.

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