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Baroness Ramsay of Cartvale: My Lords, before this matter is allowed to go uncorrected and unchallenged into Hansard, the noble Earl said that the Home Secretary had gone to Chile in order to meet, he implied, President Allende. The noble Earl would be well advised to think carefully about that. I understand that that has been completely denied. I do not want to get into this issue, but I think that the noble Earl should withdraw what he has just said about the Home Secretary.

The Earl of Dundonald: My Lords, I withdraw that comment. All I say is that I understand that a photograph was taken of the Home Secretary meeting the president on his visit. If that is not the case, I certainly withdraw the remark.

What right have the Home Secretary and this Government to dictate what should happen to a former head of state in another sovereign country? What right has the Home Secretary to interfere with the settled will of the Chilean people? The attitude of the Government is somewhat disturbing.

The Chilean people have been slighted. Their new democracy seems robust but it is being put under unnecessary pressure. We are holding a former head of state against his will: the very same head of state who less than 10 years ago secured more than 40 per cent of the vote. If the Home Secretary and this Government think that this action is not damaging and destabilising to the democracy of Chile, then they live in a different world. Relations between the two countries have been put under unnecessary strain. The Chileans think of us as great friends. Why have we slighted this very good friend of ours?

The Minister must persuade the Home Secretary. She must say, "Don't demean the settled will of the Chilean people with the judicial argument". The buck stops with this Government and nowhere else. They have the ability, I hope very soon, to restore relations with this wonderful country, a country that has few equals as to its claims to friendship with Britain. They have the ability to pour the metaphorical oil on troubled political waters in Chile.

I challenge this Government to pick up the gauntlet, send Pinochet back to his country, and stop interfering in the fundamental democratic foundations of another sovereign state. It is never too late to have a change of heart. The Chilean people will thank this Government for it from the bottom of their heart.

8.14 p.m.

Lord Avebury: My Lords, I pay warm tribute to the noble Viscount, Lord Montgomery, for the assiduity and competence with which he has always raised Latin American matters in this House. In the early days we did not always see eye to eye, in particular on the question of Argentina after 1976 when I had been there as an Amnesty representative to look at what the

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generals were doing. But now things have been transformed. Perhaps I may say to the noble Viscount that if we have a different electoral system, when the tumbrels begin to roll I shall certainly vote for his retention as one of the 91; and I hope that his colleagues will have the sense to do so.

I also warmly congratulate the noble Lord, Lord Walker, on his maiden speech. I was not surprised to hear him say that he was rising with some trepidation in a field of such distinguished speakers. But he need not have worried. He matched the other contributions to this debate, excellent though they have all been, and I hope that we shall hear many times in the future from the noble Lord, Lord Walker, both on Latin America and on the many other issues on which he spoke with such great distinction in another place.

Noble Lords have said, I think to a man, that there has been a great transformation in the Latin American region from the military systems which operated in so many of the countries when the noble Viscount, Lord Montgomery, first entered this House, to the almost universally democratic form of government that we see today. The noble Viscount mentioned that even Cuba claims to have a democratic system. I noted that at the OAS meeting that has just taken place, a unanimous resolution was passed saying that Cuba should be admitted to the OAS. I think that we are all getting a little fed up with the American attitude to Cuba which smacks so much of the Cold War in the 1960s. Perhaps it does not have the perfect democracy that we should like to see it enjoying, but we should do everything possible to promote the democratic system in Cuba. It is absurd for the Americans to bear such a grudge against one country which can do them no harm whatever.

Several noble Lords mentioned the EU Mercosur Summit and the dangers of a difficult situation because of what has just happened in Cologne. I agreed with everything that the noble Lord, Lord Grenfell, said on that. We embarked on a project to have free trade and economic co-operation between our two regions. That was supposed to begin at the summit at the end of this month. Then, because of agricultural concerns, the proposal was watered down. The Germans produced a compromise in which this was not to begin until December 2000. At the last minute the whole phrase was struck out. We now have nothing to go on. As the noble Lord said, there is a danger that the Rio Summit will be a damp squib and that the relations between the European Union and the Mercosur states will suffer a serious setback. I do not know whether anything can be done at this late stage to rescue that; probably not, although the noble Lord believes that we could begin to consider how we can resuscitate these negotiations on the improved trade between our two regions.

Several noble Lords mentioned our relations with Argentina. The noble Viscount, Lord Montgomery, said that President Menem's visit to the UK at the end of October 1998 was an outstanding success, which indeed it was, and a significant milestone in the relationships between our two countries which have proved the success of the notion of the sovereignty umbrella under

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which it was agreed that we would pursue normalisation without prejudice to any remaining differences on the Falklands.

The fact is that Argentina is now our second largest trading partner, and that we have, as the noble Baroness, Lady Hooper, said, excellent co-operation on a number of issues other than trade, including UN peacekeeping, the fight against drug trafficking, and so on. We have in Argentina a partner which is a stable democracy, heading for closely fought presidential elections in October between the ruling Peronists and the opposition Alianza coalition. As has been said, whoever wins, there will be no sharp change of direction as the opposition candidate, Fernando de la Rua, has pledged to maintain parity of the peso with the dollar.

Mention was made by the noble Lord, Lord Walker, of the wonderful treaty which has been signed between Argentina and Chile which ends more than a century of border conflicts between the two neighbours, which must be good for regional stability and expansion of bilateral projects such as oil and gas pipelines, linking electricity supplies and mutual investment, in which British firms can participate. Even on the Falklands, as has been said, there is good news, with talks aimed at admitting Argentine visitors to the islands and the establishment of an air route between Port Stanley and the mainland. La Nacion reports that Foreign Minister Guido di Tella is optimistic about the next round which is due to be held next month in New York, and it would be useful if the Minister could tell the House when she winds up what points still have to be resolved at that meeting.

Chile is another success story, which has been mentioned by several of your Lordships, since its return to democracy in 1990 and it is set to continue on the same path with the change of presidency next March when the ruling centre-left coalition candidate, Ricardo Lagos, will almost certainly continue where Eduardo Frei leaves off.

I beg to differ with the noble Earl, Lord Dundonald. I think our relations with Chile are not irreparably damaged by the legal proceedings against the former dictator Pinochet. I think those proceedings are widely welcomed by many people in Chile and certainly they are by the Chilean exile community. Perhaps we speak to different groups of Chileans. When one looks at how the matter is reported in the Chilean press, there is not really a case for the picture of gloom and despondency about our relations which the noble Earl, Lord Dundonald painted a few minutes ago.

Like the Minister, I do not want to go into the case against Pinochet, but I feel I have to mention that it has far wider implications than just our relationship with Chile because it has sent a message to would-be dictators everywhere that, under the new regime of universal jurisdiction for torture, the perpetrators are answerable before courts all over the world, and that heads of state have no immunity. At the EU-Latin America Summit we should invite the states of Latin America to join us in ratifying the statute of the International Criminal Court, which covers an even wider range of offences and specifically provides that

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heads of state are subject to the court's jurisdiction. Several of the states of Latin America have already signed the convention and I hope that, as a result of the meeting in Rio, we can move forward--Latin Americans and Europeans jointly--towards early ratification.

In the few minutes that are left to me I want to say something about the situation in Colombia which was dealt with very skilfully by the noble Viscount, Lord Waverley. The US Drug Enforcement Agency says that Colombia tops the world in the sense that 55 references are made to Colombia in its annual report. It is also the state with the highest level of internal armed conflict in the region, with not one but two separate armed opposition groups and also the paramilitaries, which are headed by a Mr Carlos Castano who is deeply involved in the drugs trade himself.

President Pastrana is committed officially to severing the links between the paramilitaries and the army, but he has not made any discernible progress in that direction. Those people have enormous power in Colombia because of the sums of money in which they deal but, to give you one indication of the scale of the operations, in one bust against the Galeano drug empire last year, 5,000 kilograms of cocaine were destroyed at a single laboratory, one of several belonging to this organisation. The traffickers also own huge amounts of land, including parcels in no less than 40 per cent of the country's municipalities. Clearly it is in our interests that President Pastrana should succeed in eliminating the cocaine mafias, as well as cutting the connection between the army and the paramilitaries.

In conclusion, I ask the noble Baroness what assistance we are going to give to Colombia in this war against the paramilitaries, the guerrillas and the drug mafia who are so closely in league together and who are bidding fair to destroy Colombia as an entity.

8.25 p.m.

Lord Moynihan : My Lords, before I entered another place as a rather nervous young man in my twenties I had the good fortune to learn a great deal about British political life from my noble friend Lord Walker. Possibly unwittingly, he was instrumental in increasing my confidence to a level commensurate with completing a candidate's application form to Conservative Central Office. I have never ceased to respect my noble friend for his beliefs, nor have I been deflected from my admiration for his contribution. It is a personal privilege from this Bench to be able to pay tribute to him on his maiden speech here, which is somewhat embarrassing given what I have just said about his contribution towards my political career and, most importantly, from a personal perspective to thank him very much indeed.

I should like to take this opportunity to congratulate my noble friend Lord Montgomery on securing this important debate on political developments in Latin America. I focus my comments on the outstanding contribution he has made over the years. I am sure that there is not the remotest possibility that my noble friend will not emerge victorious should he decide, as I hope he will, to offer his candidature in the elections for

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representative hereditary Peers should the relevant government legislation be enacted, because his expertise on Latin America is second to none and the Conservative Party and indeed the House would be significantly the poorer for his absence.

I agree with my noble friend that it is a matter of deep regret that in Latin America there is a perception, fed by infrequent ministerial visits, remarkably few speeches by Foreign Office Ministers and even fewer debates in this House and another place, that the present Government take little interest in Latin America. The Prime Minister's decision to cancel his trip this month to Rio de Janeiro to attend the summit meeting between the EU and South American states, while completely understandable in the circumstances, is in this respect most unfortunate.

I hope that the Minister's response to today's debate will be a first step in dispelling the regrettable impression that relations with Latin America are not among the foremost of this Government's global foreign policy priorities. I hope that she will emphasise the Government's commitment to developing relations and strengthening ties with Latin America into the next century. To do otherwise would indeed be a false economy. The United Kingdom and Latin America together can take a great many sensible and important steps forward in enabling Latin America to become a key emerging market, growing in importance within the global economy. Indeed, I believe that Latin America and the southern cone region in particular, as my noble friend Lord Walker mentioned, present one of the most exciting and dynamic opportunities of the next century. Here I must also declare an interest as Managing Director of the independent Power Corporation. In declaring an interest, I echo the praise given to our ambassadors and their staff in Latin America. It is fairly rare, as a number of your Lordships will know, to attend foreign affairs debates on a regular basis. It is fairly rare to hear such extensive praise heaped on our diplomatic staff, but in my experience, certainly my commercial experience over the past 10 years in Latin America, this praise tonight from all quarters of this House is richly deserved.

There is a broad consensus, and has been throughout the debate, on the need to deal with Latin American issues within the emerging democratic and constitutional framework. In each case, constitutional processes, democracy and the rule of law have not been sidestepped in the region's rapid development, demonstrating, in my view, the increasing political maturity of both the Latin American leadership and the electorate. The peaceful resolution of the border dispute between Ecuador and Peru last month is yet another excellent example of that new-found maturity.

Nevertheless, although the countries of Latin America have made a common commitment to follow the path of representative democracy, in particular in the 1991 Santiago Commitment, strengthened at the 1994 Miami Summit, that path is still a steep one, beset by obstacles and challenges. As my noble friend Lord Radnor reminded us about Latin American democracy, neither democracy nor prosperity can endure unless they are broadly based--indeed, as broadly based as his family.

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The policies of free markets and of open investment, which are the keys to sustained growth, will not be fully unlocked while people feel shut out and left behind. Fairness before the law is not an option for some while institutional weaknesses remain.

We should not forget that Latin America has the highest income inequality in the world. Too many still remain cut off from the benefits of the new global economy. The Inter-American Development Bank estimates that in Latin America the top 20 per cent of the population receive one-quarter of the income, while the poorest 30 per cent receive only 8 per cent of the income--a lower proportion than anywhere else in the world. To put it in more contemporary and stark terms, one in every three people in Latin America and the Caribbean live on less than two dollars a day.

So, unless democracy and the market system improve the lot of those people--a fact recognised and addressed with innovative policies by a number of South American politicians, not least the outstanding former president of Bolivia, President Goni Sanchez de Lozada, in his capitalisation initiative--this will remain a threat to stability and political freedom. The disenfranchisement of the urban poor, of rural indigenous people and of the uneducated everywhere threatens to become an increasingly volatile political issue if growth is not seen to be bringing tangible benefits to all levels of society. Poverty brings with it the sinister bedfellows of crime, of drug abuse, of poor education, to which a number of noble lords have referred, and of poor health.

The key to democratic stability must be the establishment of a strong middle class with a vested interest in the political stability of the country. The noble Lord, Lord Grenfell, alluded to that. The examples of Chile and its pension funds and, in the much wider and further-afield context, of Taiwan, and more recently of the capitalisation programme in Bolivia, bear testimony to the importance of developing a strong middle class--a middle class which has a vested interest in the stability of the country. For too long, one has had a series of elites with a large, disenfranchised majority. As the elites go abroad and those from America return to run a number of these countries, that transition among the elite at one level has had significant detrimental effects on a disenfranchised urban and rural poor.

It is that establishment of a middle class, through such initiatives as the Chilean pension schemes, that allows the stability that is essential economically to back political stability in those countries. We are seeing such economic developments now. They are praiseworthy and I hope that the Government will support them, not least through debt development swaps and further debt relief work to ensure that in the poorest countries of Latin America significant progress can be made towards enhancing and reinforcing the middle class and the stability that flows from having a strong and enfranchised middle class.

In the last few moments of my contribution, I should like to comment on our relationship with Chile. I am well aware, as the noble Baroness knows, that today is not the occasion to discuss the Government's handling of Senator Pinochet's extradition case, and I do not

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intend to do so. However, I should like to ask the Minister--this is a question that has rightly been asked by a number of other noble Lords this evening--to what extent she believes that our commercial and political relationship with Chile has been affected by the case, particularly with regard to the Falkland Islanders.

As the Minister will be aware, last December Chile and Argentina issued a joint declaration in which Chile for the first time officially recognised Argentina's claim to the Falkland Islands. That was followed by the cessation of LanChile flights to and from the Falkland Islands at the end of March when its contract with the Falkland Islands Development Corporation expired. Can the Minister explain why, on 20th April this year, in another place, the Foreign Secretary insisted that the continuation of that contract was a commercial matter for discussion between LanChile and the Falkland Islands Development Corporation when, in fact, the Government of Chile had issued a decree prohibiting Chilean carriers from flying to the Falklands with effect from 10th April, particularly given the Government's knowledge of the Chilean Government's decision last December to ask Chilean carriers not to fly to the Falklands? Why did not the Government take the opportunity to remind the Chilean Foreign Minister of the commercial and social benefits for remote communities both in the Falklands and in southern Chile, when the flights first stopped at the end of March instead of waiting until four weeks later?

One hundred and fifty years ago, Simon Bolivar said that he wanted Latin America to be measured not by her vast wealth and area, but,

    "by her freedom and glory". That day is not yet here, but Bolivar's vision is nearer than at any time in Latin America's past. If the region continues to make progress at its current rate as we enter a new century, the day will come in Latin America when, across the continent, growth is increased; living standards are improved; a modern and well educated workforce is built up; poverty is decreased; income inequality is narrowed; democracy is consolidated and open markets have become an integral part of Latin American institutions and culture.

Britain and Latin America have a joint interest in political stability, in the promotion of democracy, in the security of our investments, and in further developing a thriving and growing trading partnership. I say to the Minister that Latin America offers a compelling case for closer active British engagement, and I look forward to her response.

8.36 p.m.

Baroness Ramsay of Cartvale: My Lords, I am grateful to the noble Viscount, Lord Montgomery of Alamein, for introducing this debate. In his years in your Lordships' House the noble Viscount has shown an unrivalled commitment to the Latin American region, and he has amply demonstrated his expertise tonight. He called this debate his "valedictory". As with so many other noble Lords, I can only say, "I hope not". We greatly value the noble Viscount's contributions on this

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important part of the world and we acknowledge the high regard in which he is held by the Latin American community.

I should also like to associate myself with the warm comments made by many noble Lords about the knowledgeable and impressive maiden speech of the noble Lord, Lord Walker of Worcester. Like other noble Lords, I look forward to his future contributions.

I am particularly glad that the noble Viscount called this debate now; it is very timely. As has been mentioned, in just three weeks, the EU/Latin America and Caribbean Summit will take place in Rio de Janeiro. That will be a landmark event in the development of relations between our two regions. My right honourable friend the Prime Minister is very disappointed at being unable to attend. He is telephoning President Cardoso this evening to express his regret. The deadline for devolution in Northern Ireland is 30th June, as your Lordships are well aware, and the Prime Minister must stand ready to do whatever is necessary to help the parties to reach agreement. He has nominated my right honourable friend the Foreign Secretary as his representative at the summit. He will be accompanied by my noble friend Lady Symons of Vernham Dean. We are anxious to ensure that the summit, as well as providing an opportunity for the leaders of both regions to get together for bilateral meetings, will lead to substantive action that benefits the people of both regions.

The noble Viscount, Lord Montgomery, the noble Baroness, Lady Hooper, and the noble Lords, Lord Grenfell and Lord Avebury, referred to the particular expectations of the Mercosur countries at the summit concerning EU/Mercosur and EU/Chile free trade agreements. The Government understand their interests and have been working for an EU compromise which would promote comprehensive trade liberalisation on both sides. We do not have the same problems on agricultural products as some of our European partners, but we recognise that those problems exist and need to be taken into account in the negotiations.

The World Trade Organisation multilateral negotiations are due to begin next year, as the noble Lord, Lord Avebury, mentioned. Any new EU/Mercosur and EU/Chile trade agreements must be compatible with the WTO principles. We have therefore agreed for discussions to begin soon about practical ways in which our two regions can co-operate in the WTO round and for bilateral negotiations about free trade between our regions to begin in 2000. That will be discussed further at the next General Affairs Council on 21st June. I hope that that explanation answers the points raised by the noble Lord, Lord Avebury.

Mercosur countries should know that our goal is the same as theirs; to press ahead to achieve comprehensive trade liberalisation as quickly as possible. This should include all products, including agricultural ones. Staying with commercial issues, in 1998 UK exports to Latin America totalled £2,962 million. Our exports over the previous decade grew at an annual rate of some 12 per cent, second only to our exports to Eastern Europe. In some countries we are doing particularly well; in

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Venezuela, for example, where UK exports increased by 20 per cent from 1997 to 1998. As regards investment, the UK is among the top investors in the region. I say that in order to paint a brighter picture than some of the pessimistic ones that have been put on the trade relationships between Britain and Latin America.

In addition, on 26th April, my noble friend Lady Amos informed the House of the measures we have taken to help alleviate the suffering of those affected by Hurricane Mitch, mentioned in the intervention of my noble friend Lord Grenfell. We will continue to play our part alongside others in the process of reconstruction. The UK is also at the forefront of international discussions to increase debt relief for the world's poorest countries.

I wish to pay tribute to the achievements of Latin American countries in the field of political and economic reform. There have been dramatic changes, as the noble Viscount, Lord Montgomery, and others such as the noble Lords, Lord Walker and Lord Grenfell, made clear tonight. Twenty years ago, more than 60 per cent of the region's populations were ruled by dictatorships and Latin America is now governed by elected civilian politicians. We do not underestimate the problems they face. For example, as pointed out by the noble Earl, Lord Radnor, Paraguay has had problems. Its governmental system was severely tested in the spring.

With encouragement from its Mercosur neighbours, Paraguay has maintained control of the democratic process. The settlement of the border dispute between Peru and Ecuador is also very welcome, as the noble Lord, Lord Moynihan, pointed out. My honourable friend, Mr Tony Lloyd, was able to walk across the border during his visit to the region in January this year.

We also welcome the increasing normalisation of relations between Guatemala and Belize, and moves towards greater cross-border co-operation. We continue to encourage both sides to explore the options for a settlement of a long-standing dispute between them and we stand ready to help where we can.

In Colombia, about which the noble Viscount, Lord Waverley, spoke with such a depth of knowledge and understanding, to which the noble Lord, Lord Avebury, and my noble friend Lord Rea, also referred, President Pastrana has begun peace talks with the FARC guerrillas, for which an agenda was agreed in May. With our EU partners, we have strongly supported this process in public statements and have reiterated our readiness to help the Colombian Government in any way we can. But as some noble Lords pointed out in the debate, there continue to be disturbing cases of human rights abuses in many of the countries of the region. These give us great cause for concern.

Protection of human rights is an integral component of our foreign policy strategy. We take every opportunity to raise our concerns and we support, both directly and through collaboration with interested NGOs, the efforts of these countries to improve the situation. There is a need for stronger measures to bring to justice those responsible for abuses, as various noble Lords pointed out, including the noble Baroness,

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Lady Hooper. If Latin American countries wish to be seen as having come fully of age as mature democracies, their administrations must address these problems.

The UK is fully committed to the international fight against drugs. That topic was also referred to by several noble Lords tonight. We are interested in any measures which will reduce and eventually eliminate the supply of drugs. Latin America is the main source of cocaine consumed world-wide. An action plan on counter drugs strategy was recently approved at a high level meeting between the EU, Latin American and Caribbean governments. We expect that it will be endorsed at the EU/Latin American/Caribbean Summit in Rio at the end of this month.

The noble Lord, Lord Thomas of Swynnerton, mentioned Mexico. I am pleased that he did because it is an important country. UK/Mexico relations have strengthened since President Zedillo came to power in 1994. During his visit to the UK in October 1998, he and the Prime Minister signed a UK/Mexico joint action plan. This co-operation is reinforced by regular ministerial contacts and high-level political dialogue.

I am conscious that my time is limited, so I wish to turn to two specific topics touched on by the noble Viscount, Lord Montgomery, the noble Lord, Lord Thomas of Swynnerton, and the noble Earl, Lord Radnor. It is particularly timely to consider our relationship with Argentina as part of this debate. We welcome the continuing improvement in our relations in recent years. The task of rebuilding our relationship has been made easier because the two countries have had special ties of friendship and shared interests stretching back almost two centuries. Indeed, the warmth of that historical friendship served to emphasise the tragic nature of the events in 1982, about which the noble Earl, Lord Radnor, spoke most movingly.

As the noble Earl, Lord Radnor, mentioned, the visits of President Menem to the UK in October 1998 and of His Royal Highness the Prince of Wales to Argentina and the Falkland Islands in March 1999 contributed to the creation of a new spirit of understanding and reconciliation between the UK and Argentina.

Noble Lords will be aware that a meeting took place in London in May between the UK and Argentine delegations, referred to by the noble Baroness, Lady Hooper, to discuss issues of common interest in the South Atlantic. The talks were held in a friendly, open and constructive atmosphere, building on the new spirit in our relationship. Both delegations agreed that they would continue to work together to find ways of making progress over a range of South Atlantic issues of common interest. They agreed to meet again as soon as possible to discuss such issues further. We hope that the first meeting will be the start of a process of dialogue which may in the longer term improve the management of our differences with Argentina on South Atlantic issues.

Secondly, I can assure the House that this Government place great value on our relations with Chile. I have no hesitation in reassuring the noble Earl, Lord Radnor, and other noble Lords about that. The

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links between Britain and Chile are long-standing and mutually advantageous. I can assure the noble Earl, Lord Dundonald, that as a good Scot I had heard about his illustrious ancestor many times from any Chilean friend I ever met.

I say to the noble Earl, Lord Dundonald, that I shall not go into matters that, in my opinion, are sub judice.

Chile's liberal free market approach to trade, which we share, is an example to others, as are the sound economic policies which Chile has pursued over the past decade. We fully recognise the difficulties that successive Chilean governments have had to overcome to achieve a successful transition to democracy.

We have kept in close touch with the Chilean Government since Senator Pinochet's arrest on 16th October. We are aware of the problems that the arrest has caused in Chile. We have taken pains to assure the Chileans that the detention of the senator is entirely a judicial matter relating to our obligations under international law. There is no question of a political motive for the action.

Therefore, we consider that the political measures that Chile has taken against us, including her decision to prohibit the airline LanChile from flying to the Falklands, to be unjustified. That matter was raised by the noble Lord, Lord Moynihan. I can assure him that my right honourable friend the Foreign Secretary has told the Chilean Foreign Minister that we strongly disagree with the decree. Indeed, we hope that the Government of Chile will withdraw all measures introduced against us as soon as possible and that we can work together to keep our relations on track. We firmly believe that it is in the interests of both countries to reduce the risks of further negative consequences to our long-term relations.

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