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Lord Wallace of Saltaire: My Lords, I had not intended to intervene in this short debate. However, I wish to make a couple of remarks. I am tempted to invite the noble Lord, Lord Bruce of Donington, to come across to our Benches because I have heard such a wonderful conversion to the doctrine of pure international free trade and the argument that government should not in any sense be involved in international commerce. However, these agreements are important. It was not the European Community itself which initiated many of these discussions, it was the countries concerned. The Euro-Mediterranean strategy is one of the more important elements of the European Community's foreign policy.

As the noble Baroness mentioned, there is a substantial budget under the Euro-Mediterranean agreements agreed by the Barcelona conference which
 
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is intended to provide a substantial amount of aid over the next few years towards the countries of the southern Mediterranean littoral. This is not just a matter of commerce; it is a matter of foreign policy and security policy. Morocco, Algeria, Tunisia and others—the noble Baroness mentioned our agreement with Palestine—are countries with close political relations with western Europe. All of them supply substantial flows of migrants towards western Europe which we struggle to contain. We all therefore have a direct interest in their continuing stability. I therefore welcome in particular the agreement with Morocco in those terms.

I hope the Minister will say a little more, now or later, on how the broader Euro-Mediterranean agreements are being put into effect. Certainly many of us had the impression that this was an initiative of the Spanish and Italian presidencies in connection with the French Government to which other member governments of the European Union did not attach much importance. However, it seems to be rather important in terms of the long-term stability of the Mediterranean periphery of the European Union.

Lord Moynihan: My Lords, I think the noble Lord, Lord Bruce of Donington, was being a little modest. I can match neither his eloquence nor certainly his experience of, I believe, 34 years on this subject. As my Government—as they were then—were party to negotiating these agreements, the noble Lord and the House will not be surprised to hear that we are supportive of the three framework co-operation agreements before the House today. Nor do we believe that there is anything in them that is inimical to British trade interests abroad. On the contrary the thrust of all three of these agreements is to take progressive steps towards freer, more open trade and to permit greater opportunities for companies which need to exercise their business acumen within the countries concerned and in their relationship with the European Union in order to undertake business, make a profit and create employment.

I give one example to show why these agreements are a considerable step forward and are not much ado about nothing, to use the noble Lord's phrase. I refer to the negotiations that took place between the European Union and Morocco. The negotiations were not easy; they were protracted and painful. The reason for that is that it took a long time to move forward to a more liberal and open approach to agricultural exports coming from Morocco into the European Union. I think the Moroccans were rightly aggrieved in the early stages of the negotiations that the agricultural arrangements seemed to fall short of what they wished, which was the much more open market sought after both by the noble Lord, Lord Wallace, and the noble Lord, Lord Bruce of Donington.

Many observers thought that both France and Spain were being unduly protectionist on the question of agricultural exports. What was needed was a detailed negotiation culminating in a reasonable decision and a step forward which would allow far greater opportunities for companies to do business from Morocco into the European Union and vice versa.
 
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Morocco would much prefer to have seen a system of free competition as it quite rightly maintained that its consumers were happy with its agricultural products, as were European consumers. It argued that market access was important. Agreement could not be reached to the extent that Morocco wished, but the final agreement was a significant step forward and I hope there will be further openings of the door towards a wider, more open market and towards open free trade in due course. That is one of the long-term objectives of this agreement and the surfeit or plethora of agreements. The noble Lord referred to that surfeit of measures in his speech. The agreement is a step forward in removing the barriers to trade and in enhancing competition.

The motive underlying the agreement is the same as that which underlies the other two orders that are before the House today. Far from being inimical to British or European Union trading interests, I argue that these three agreements represent significant and important steps forward to more open trade and ultimately, I hope, to a global free trade organisation which has appropriate regulation but which enables much wider more open trade with significant trading partners. As was rightly pointed out by the noble Lord, Lord Wallace, this all emerged from the Barcelona process launched in 1995. I believe that process has been significant in developing closer co-operation between the European Union and the Mediterranean region. Tunisia was the first Mediterranean country to sign an association agreement with the European Union.

The agreements before the House today concern Morocco, Mercosur and Chile. However, that is not the end of it. I welcome the commitment given by the Minister today that further agreements are also due to be ratified with Egypt, Jordan, the Lebanon, Algeria and, as I understand it, Syria. Those are all important and welcome steps forward. Just as we have developed and broadened our relationships with the Mediterranean region, it is also important that the European Union begins to develop its already thriving links with Latin America through the two additional agreements, first, with Chile, and, secondly, with the Southern Common Market—or Mercosur, as it is better known to your Lordships' House.

In these agreements, Europe not only advocates freer trade, but also looks to the need for self-determination and territorial integrity. I welcome the Minister's comment that the agreement will also lead to opportunities for policy developments for the environment. I should like to learn more about that from the Minister. The agreements add a secondary dimension to the critical core issue: the realities of global trade and inter-communication. That is what the three development frameworks seek to achieve.

The effects of the frameworks should not be seen to be limited simply to successful trading alliances. I hope and believe that there will be other diplomatic advantages to the Government. I refer to the extension of the European Union's influence in regions of disturbance, and the welcome measures that we have heard—we shall look forward to seeing them in practice—in regard to human rights and human rights
 
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abuses in those countries where, as a result of closer trade relations, we shall have an opportunity to exert greater leverage in order to develop sensible and practical solutions to the problems of the day.

When we discuss trading links with Latin America, and in particular the Southern Common Market, we are referring to some of the largest economic engines in the world. Brazil's GDP is of the same order of magnitude as that of China, and 50 per cent. larger than that of India. The Argentine province of Cordoba alone has a GDP equal to that of Bulgaria. The Southern Common Market already accounts for 7 per cent. of the national product of the world. I suspect that it will grow very fast—far faster than the more mature economies of Western Europe. We have already played a key role in this region's success story, in particular through the privatisation initiatives which have dominated domestic policy throughout the region. So the strengthening of the economic ties with Europe forged by this agreement are welcome, important and positive steps forward.

My noble friend Lady Hooper, who has considerable well-known expertise on South American politics, had intended to be present to speak on the draft order regarding Chile. She asks to be associated with my congratulations to the Government of Chile on the work that they have done both in the negotiations on this agreement and as an economic paragon in Latin America. It has become a remarkable example of a country where free trade policies and privatisation can fuel economic growth and create jobs. Chile's economy grew by 7.1 per cent. in 1996. It was the largest growth rate of any of the major economies in the Americas.

I seek to praise Chile for the remarkable success of its pension programme. In practice what that pension programme achieved is a lesson to all development economists. It created a strong enfranchised middle class. Through that pension provision, and through the creation of a strong middle class, one no longer has the traditional problems of a ruling elite and a disenfranchised working class. But with the creation of a middle class, one has a strong springboard to growth—exactly the same springboard as created success, for example, in Taiwan. The strength and courage of the Chilean politicians and economists in creating that is a model. It is a model that is widely acclaimed around the world. The orders present a useful opportunity to praise the Government of Chile for the success of their free trade policy and their openness towards foreign investment. It is noteworthy that Chile's major trading partners include the United Kingdom and Germany. The agreement before your Lordships' House today develops and nurtures that trading link. It is a further step towards free trade with this successful nation and will, I hope, create a framework for continued prosperity between us.

I also believe that the agreement will help fulfil the ambitions expressed by all speakers in this short debate for global free trade in the future, in our case we hope early in the next century. Chile has become an entrepôt between a number of key trading groups. Although not a member, it has close dealings with NAFTA, and as an associate member of Mercosur it will undoubtedly be instrumental in developing a free trade zone across the whole of the Americas.
 
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But Chile is also a member of the APEC grouping which brings together the countries of the Pacific Rim. I envisage a future where freer trade groupings of the world are able to unite to create less inhibited global markets. I stand short of a global free market zone. I think that that aspiration is probably beyond my lifetime, although it is one that I would welcome.

The agreement is important to us politically because as an entrepôt in those trading organisations Chile can be important as a key to unlocking the potential of closer working relations between the trading groups.

Finally, on Morocco, it is incumbent on the European Union to develop bilateral agreements with those closer to home. Of all the regions with which I believe we need to develop a closer understanding, the Mediterranean is perhaps the most important. It is, after all, on our doorstep; and, moreover, it is politically turbulent. I believe that the Barcelona process which is keen to develop closer integration between the European Union and the countries of the Mediterranean can play a very active part in the Middle Eastern peace process. I look forward to agreements being ratified with Egypt, Jordan, Lebanon and Algeria as well as Syria. Morocco is, happily, in a more stable situation than most. Nonetheless, just as we can prosper by developing our markets with Morocco, so we must ensure that Morocco has access to the markets of Europe.

I mention the specific example of the lengthy and protracted negotiations over agriculture. But this agreement is welcomed by the Government in Morocco. It is welcomed by the nation states, the countries, the members of the European Union. It is an important step forward. All those who have worked to achieve this agreement deserve our support and recognition of their success.

The agreements vary considerably. The agreement with Morocco steers us towards a closer political dialogue. It concentrates on the liberalisation of trade in goods and services, and capital, and the expansion of economic social relations. It will also encourage the integration of the Maghreb group of countries. In contrast, the agreement with Chile, although also primarily concerned with trade and political dialogue, will ultimately lead, I believe, to the establishment of a political and economic association between the European Union and Chile.

Finally, the agreement with the Southern Common Market, the Mercosur, is perhaps the most wide-ranging of the three agreements. It will seek to strengthen existing relations, and, I hope, prepare the ground for the creation of an inter-regional association. It will seek co-operation and progress on trade liberalisation and other areas of mutual interest including energy, transport, science and technology, telecommunications and, as the Minister mentioned, the environment, education and training.

I had warned the Minister that I intended to ask her a number of questions today. I have not done so not only because I know that she will be extremely confident in answering any questions that I ask, but because I believe that it has been useful to try to answer the important point made by the noble Lord,
 
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Lord Bruce of Donington, as to why these three agreements are important today and why a great deal of time has been put into negotiating them. I hope that my comments will find at least some agreement with the Minister. I believe that these important steps forward are beneficial trading opportunities for European companies and the three areas of the world about which we have been talking. The agreements are important steps forward to free trade. They will be seen by history as door openers to further economic, political and trade policy.


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