HL Deb 04 March 1937 vol 104 cc517-22

My Lords, I have to ask your approval this afternoon to what at first sight may appear to be a somewhat formidable list of Orders under the Government of India and Government of Burma Acts, but these Orders have been scrutinised by the India and Burma Orders Committee, and they have reported that upon two of these Orders only need your Lordships bestow any particular attention. I shall nevertheless be pleased, if any noble Lord wants information relating to any other Order, to do my best to supply it if he will ask for it as the Orders are moved. The two Orders which do raise questions of principle and of some importance are those known as the India and Burma (Trade Regulation) Order and the Government of Burma (Immigration) Order.

The purpose of the Trade Order is to regulate for a specified time after the separation of Burma from India the trade between those two countries, and the necessity for such regulation arises, of course, out of the dislocation which might be caused in the trade of the two countries which has hitherto passed freely from the one to the other. That trade is of some magnitude, amounting in all to a value of some £30,000,000 per annum. The question as to how best any dislocation of this trade could be prevented on the separation of the two countries was considered with great care by the Joint Select Committee. The conclusion the Committee came to was that the best course would be for the Government of India and the Government of Burma to conclude a trade agreement before the separation took place, and for provision to be made in the Government of India Act and in the Government of Burma Act for effect to be given to such an agreement by means of an Order in Council. An Agreement as suggested by the Joint Select Committee was duly con- eluded between the Governments of India and of Burma in the summer of 1935. It was published as a White Paper in August of that year. Your Lordships will remember that provision was made in the Government of India Act, by Clause 160, and in the Government of Burma Act, by Clause 135, for the implementing of an agreement of that kind by means of an Order in Council, and it is the terms of that Agreement which are embodied in the Order now before your Lordships.

Perhaps it will be for the convenience of your Lordships if I explain very briefly the salient features of this Agreement. Broadly speaking the effect of the Agreement will be to maintain the existing position—that is to say, to maintain during the currency of the Agreement free trade between India and Burma. So far as the imports from other countries into India and Burma and the exports from India and Burma to other countries are concerned, they will be subject to the duties which are at present leviable under the existing Indian tariff. In other words, India will retain so long as the Agreement is in force the preferential position which she occupies in the Burmese market at the present day, and Burma will maintain the preferential position which she occupies in the Indian market. So far as the tariffs of the two countries are concerned against goods from other countries the hands of neither party are rigidly tied. For instance, in the case of goods which are not produced or manufactured in India, Burma will be entitled if she so desires, by giving two months' notice, to reduce or to abolish her duties on foreign importations, and the same of course applies to India also.

Even in the case of goods which are produced or manufactured in either of the two countries, reduction may be made in the level of their duties on foreign imports, but the reduction in that case would require the consent of the other party to the Agreement. That is to say, if Burma desires to lower the Import Duties at present levied upon goods imported from outside and those goods were either manufactured or produced in India, she would before she was entitled to reduce her duties have to obtain the consent of the Indian Government. The term of the Agreement as at present arranged is to be for three years, or for such period as elapses after twelve months' notice has been given by either party to terminate, whichever of those two periods may be the longer. The Agreement, therefore, will remain in force at any rate for three years, and unless one party gives notice of a desire to terminate by April 1, 1939, the Agreement will continue beyond three years and until notice, with the necessary interval which is required for notice to be given, is given.

Let me just touch for a moment upon such criticism as has been made of this proposal. So far as I have been able to ascertain, the only serious critics of the arrangement are those who speak on behalf of the cotton interests of Lancashire. To such critics I would point out that the Agreement imposes no disability upon the cotton trade of this country. I would remind them that this is not an Agreement either between India and the United Kingdom or between Burma and the United Kingdom. It is an Agreement between India and Burma and so far as the competition between the Lancashire mills and the Indian mills is concerned this Agreement has no effect one way or the other. So far as competition between Lancashire and other countries in the Burmese market is concerned there is a provision in this Agreement which has some effect upon that competition, so far, at any rate, as importations from Japan are concerned. But that effect is favourable to the Lancashire trade, for if your Lordships will look at Clause 9 of Part III of the Draft Order in Council, you will see that the importation of cotton goods from Japan to Burma is not to exceed in any one year the amount which was imported from Japan into Burma in the year 1934–1935. It happens that, while in the years 1932–1933, 1933–1934, and 1935–1936 Japan sent 90,000,000, 47,500,000 and 62,000,000 yards into Burma, she sent to her in the year 1934–1935, which is the year mentioned in the agreement, only 42,000,000—that is to say, less than half what she sent to Burma in the year 1932–1933. Therefore, as a result of that provision, in so far as the Lancashire trade is affected by this Agreement at all it is favourably affected.

It has to be borne in mind that there is a large volume of British trade other than the Lancashire trade which is liable to be affected by the trade regulations in connection with the trade between India and Burma. It so happens that the interests of those who are concerned with this other large volume of British trade are identical in this matter with the interests of Burma herself. When one comes to examine the facts as to the trade of Burma, one sees that they must necessarily be so. The purchasing power of Burma depends upon her ability to dispose of the surplus products which she produces in large quantities—rice, oil, teak, and so forth—and until she has disposed of those products she is not in a position to purchase from other countries. Her purchasing power depends almost exclusively upon that particular export trade. At the present time she finds a market for nearly the whole of these goods—certainly for two-thirds of her surplus rice crop, amounting to 1,500,000–2,000,000 tons a year, practically the whole of the oil which she produces, and something like 80 per cent. of her teak—in the Indian market. It is therefore obvious that she is in a very vulnerable position unless she has a trade agreement with India. Were India to impose a tariff on these products, it would have a very serious effect indeed or the trade of Burma. It also has to be remembered that there are, of course, many millions of British capital invested in these various commodities in Burma, so that not only would the Burmese themselves suffer but the large amount of British capital which is invested in Burma in the production of these commodities would be seriously affected.

I have perhaps said enough to show that this Agreement has been conceived in the interests of the greatest number of people, not only in India and Burma but in this country also. There has, however, been one development since the Agreement was reached between the Government of India and the Government of Burma which may conceivably make it necessary that at some future date an amending Order in Council should be introduced. As a result of the denunciation of the Ottawa Agreement by the Indian Legislature, negotiations which have been initiated are about to take place, probably during the course of the present summer, between India and this country and between Burma and this country also, for the purpose of reaching a fresh comer- cial agreement. It is conceivable that as a result of those negotiations the Indian and the Burmese tariffs, instead of being identical, as they are at present, may diverge rather widely, and in those circumstances it would be necessary to amend Clauses 9 and 10 of Part II of this Order and Clauses 11 and 12 of Part III, since it would be necessary to provide for countervailing duties and also for certificates of origin and so on. But I would make it clear that if any amending Order of that kind is found later on to be necessary, the intention would be merely to get over the difficulties which have been created by an alteration of the Indian and the Burmese tariffs and not to interfere in any way with the main principle which underlies this Agreement.

Finally, there is the Immigration Order, which is indissolubly linked with the Trade Agreement. The object of this Order can be explained in a sentence. Its purpose is to maintain the status quo so far as immigration from India to Burma and from Burma to India is concerned. That is of considerable importance to India, for a large number of Indian labourers proceed every year to Burma to find employment there. It is estimated that something like 300,000 Indian labourers cross over to Burma every year to take part in the harvesting of the rice crop alone, so that India stands to gain appreciably as a result of the Agreement to maintain the status quo so far as immigration is concerned. On the termination of the Agreement it will of course be possible for the Legislature of Burma to legislate in regard to immigration, but that legislation will be subject to certain safeguards which have been provided in the interests of India. That, my Lords, I think covers the ground as far as these two Draft Orders are concerned, and I now beg to move that they be approved.

Moved, That the Draft Orders, as presented to Parliament and reported from the India and Burma Orders Committee on Thursday last, be approved.£x2014;(The Marquess of Zetland.)


My Lords, the noble Marquess invited us to ask any questions which might occur to us on the various Orders, and I should like to put one. The pith of the noble Marquess's speech relates to India and Burma. I do not know whether he can say anything regarding the effect on the finances of Aden of the new régime that has been set up. Some three or four years ago the idea prevailed that when the transfer of Aden from the purview of India took place there might be some injury inflicted on Aden owing to the fact that her revenues, which largely depend on the salt industry, might be heavily taxed in India. The belief used to be that the Aden salt is so very popular in India that, whatever the tax was, India would insist on having Aden's salt. I do not know whether that has been found to be the case, in fact I do not know what are the financial relations between India and Aden at the present time. Perhaps the noble Marquess might say a word on that point. Might I take this opportunity of congratulating the residents of Aden on the fact that Sir Bernard Reilly has been appointed the first Governor? It was with great pleasure that I saw this new appointment of one who has done so much for the benefit of Aden.


Perhaps it would be more convenient if I replied to the noble Lord when we come to the Order which deals with Aden. The two Orders before your Lordships now deal only with the Trade Agreement between India and Burma and the Immigration Agreement between those two countries.


My Lords, when this subject was before the Select Committee I thought—and I am still of the same opinion—that permanent safeguards should have been put into the resulting Bill for the protection of Burma. I think that not only should some such Agreement as this be drawn up for a certain period by order of the Imperial Government, but that it should not be changed without the consent of the Imperial Government, because the powers of pressure and retaliation of India when the period under this Order comes to an end, will be infinitely greater than those of Burma. That, however, is a criticism of the policy of the Act. As regards the Order, I am only sorry that it has not been made for a longer term, but I fully recognise that it is entirely in consonance with the letter and spirit of the Act, so that whatever my former views may be. I cannot oppose the Order now.

On Question, Motion agreed to.