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Lord Moynihan: My Lords, pursuant to the previous question, what efforts have been made to address the problem of the tens of thousands of displaced people in East Timor--estimated to be at least 60,000--which clearly poses a serious obstacle to registration for next month's vote and is creating a serious humanitarian problem? Do the Government believe that in those circumstances it is realistic to hold free and fair elections in August?

Baroness Symons of Vernham Dean: My Lords, we are very concerned about the large number of IDPs in East Timor. This is a matter that the United Nations mission on the ground is tackling. We have given support to UNAMET which is headed by a British UN official, Mr Ian Martin. We have contributed 1 million dollars to the UN trust fund for East Timor. The EU has contributed 7 million dollars to that fund. We are doing what we can to support the authorities on the ground; particularly the United Nations which is responsible for IDPs in that area.

Baroness Williams of Crosby: My Lords, the Minister will be aware that only yesterday the Prime Minister of Portugal, Mr Antonio Guterres, said he believed that the conditions for the proper conduct of a referendum did not currently exist. Can the Minister say what evidence she has that the Government of Indonesia are making a real attempt to control the armed militia who have attacked not only members of the East Timor Independence Movement but, more recently, members of the UNAMET mission itself? Can the Minister give any assurance that the Indonesian Government are aware of the seriousness of allowing these militia to continue such action?

Baroness Symons of Vernham Dean: My Lords, I believe that we can because the evidence is that half the Indonesian cabinet has gone to East Timor only today. That has been a very swift reaction. A number of attacks by paramilitaries, three of which have taken place in the past few weeks, have caused a good deal of anxiety. My honourable friend Mr Hoon has called in the Indonesian Ambassador and my right honourable friend the Foreign Secretary has written to the Indonesian Government. Last week Mr Hoon was in Washington and New York to discuss these matters. The Foreign Minister, Mr Alatas, who heads the team that has gone to East Timor, said today that everybody agrees that the security situation is continually improving and that preparations for the ballot have been going well. I believe that the Indonesian Government are doing what they can. A number of Ministers are in

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East Timor. We must not take things for granted but must monitor the situation closely, as we are, both bilaterally and through the United Nations.

Lord Avebury: My Lords, the Indonesian Government may be doing all they can, but does not responsibility for the violence and intimidation, and condoning it, rest on the shoulders of the army commanders, Tono Suratman and General Adam Damiri? Is not the best thing that the high-level delegation can do to restore the confidence of the people of East Timor to dismiss the commanders under whom this reign of terror has occurred?

Baroness Symons of Vernham Dean: My Lords, very often in some countries there is not necessarily the synergy between the military and political that we have come to expect. This is a matter for the Indonesian authorities who lead their armed forces. I hope that I have been able to demonstrate to your Lordships today that not only is the United Nations on the ground taking these matters very seriously but the fact that half the cabinet has gone to East Timor today to hold discussions with the UN and local civilian leaders demonstrates the urgency with which that Government are addressing the issue.

European Union/US Banana Dispute

2.53 p.m.

Lord Renton asked Her Majesty's Government:

    What progress has been made in their attempt to resolve the dispute between the European Union and the United States Government in the banana war.

The Minister of State, Department of Trade and Industry (Lord Simon of Highbury): My Lords, in response to pressure from the UK and other member states, the European Commission came forward with a paper on 26th May reporting the results of initial discussions with the US and other parties in setting out a range of options for revising the EU's banana regime. The Council of Ministers has encouraged the European Commission to continue its discussions with the US and other parties and to submit formal proposals on the adaptation of the arrangements for bananas as soon as possible. The UK has made it clear that it is open-minded on options, provided the solution is clearly WTO-compatible, ends the dispute conclusively and provides suitable support for the Caribbean.

Lord Renton: My Lords, while thanking the noble Lord for that reply and welcoming the steps that have been taken so far as they have achieved anything, may I remind him that our export trade is still suffering very severely? I give the example of carton manufacturing in my old constituency of Huntingdonshire where the threat of unemployment is now serious. Will the Government press this matter to a satisfactory conclusion?

Lord Simon of Highbury: My Lords, as the noble Lord has rightly outlined, carton manufacturing is one

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of those areas where retaliation has been taken by the United States to the value of £1.4 million in turnover out of a total of £27 million. We are doing everything in our power to hasten the European Union's negotiation so that it reaches a successful conclusion.

Viscount Waverley: My Lords, does the Minister agree that one of the principal difficulties is that in general US congressmen have little idea of the consequences of United States actions? Can the UK assist in strengthening the ACP secretariat in Brussels, for example, to allow it to play a more effective role in this regard?

Lord Simon of Highbury: My Lords, I do not believe that the negotiating process is lacking. In the European Union and in individual member states we have sufficient capacity and know-how to conclude a successful negotiation. I do not believe that extra bureaucracy will help at this time. I agree that on occasions the American process of lobbying between company and government is much more strident than our own, but, as in the case of "hushkits", sensible compromises can be found, and I believe that one will be found in this case as well.

Lord Bruce of Donington: My Lords, my noble friend will be aware that the European Commission is in the process of reorganisation. Whether or not it is yet finalised, one does not know; but can the Minister give any indication of whether the Government have yet been informed which of the new commissioners, if approved, will deal with this matter? Can he identify, in order that we may trace the matter thoroughly, which directorates-general are likely to be involved in the negotiations in their final form?

Lord Simon of Highbury: My Lords, as far as we understand it, the Commissioner for Trade Relations who will take over from our own commissioner will be Pascal Lamy, the French nomination. He is widely experienced in trade negotiations through his current role at Credit Lyonnais. I do not believe that we can yet provide details about individual directorates-general. One of the first utterances of Professor Prodi was that it would be a lot easier for people generally if directorates were given titles that described what they did rather than a number of numbers, if I may put it that way.

Baroness Gardner of Parkes: My Lords, we were told initially that the cashmere industry was just as badly affected. We now read in the press that the Americans have reversed their position on that industry. Was that simply because they liked cashmere, or was a very clever technique employed from which we can learn, and which we can perhaps apply, in the trade war?

Lord Simon of Highbury: I do not believe that it was due to anything particularly clever other than consistently sound negotiating by our side in bringing to the attention of the Americans the fact that this particular trade is seasonal and that once we had gone

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through the seasonal peak, which we were doing at the time of the dispute, that particular problem would be resolved and they would gain nothing.

Lord Clinton-Davis: My Lords, on the assumption that the hearings before the European Parliament on the new Commission will be completed by September, can my noble friend indicate when he believes it is likely that specific proposals will be forthcoming from the Commission to deal with this very protracted issue? Perhaps I should declare an interest because of my involvement in this matter until last July.

Lord Simon of Highbury: My Lords, as I said in my initial response to the noble Lord, Lord Renton, we hope to have formal recommendations soon. I think that the soonest date would be late September as and when the new Commission has gone through the process of parliamentary approval. However, as we can present proposals before that, I think that late September would be a good date.

Lord Razzall: My Lords, does the Minister agree that whatever the outcome of the negotiations, it is inevitable that there will be a serious problem for a number of Caribbean islands? Will he confirm that the Government will be at the forefront in putting together the appropriate package of guarantees, soft loans and grants to enable those islands to make the natural transition from bananas to other products?

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