§ 3.45 p.m.
VISCOUNT ELIBANK rose to draw the attention of Her Majesty's Government to the procedure in Part II of the Safeguarding of Industries Act, 1921—as amended in accordance with the White Paper (Cmd. 2327)—under which applications for the imposition of duties were first considered by the Board of Trade, and then referred to an independent Committee set up ad hoc by the Board, if in its opinion a prima facie case had been established; and to ask Her Majesty's Government whether they will consider the advisability of setting up a Committee or Committees similarly to give assistance to the Board of Trade in relation to the issue of licences for the export of non-strategic materials to China. The noble Viscount said: My Lords, before putting the Question which is standing in my name on the Order Paper, I desire to make a few observations explanatory of my purpose in putting the Question down. My Question arises out of a Question which was put to Her Majesty's Government on March 24, to which there were several supplementary questions from myself and from other noble Lords. When the noble Lord, Lord Mancroft, gave me the substantive answer to my Question he used these words. He said (OFFICIAL REPORT, Vol. 181, col. 242):
Her Majesty's Government would be prepared to consider, in consultation with other
nations, the addition or deletion of any item if strategic considerations warranted such action. They would be prepared to consider in this context any suggestions the noble Viscount may care to submit.
Subsequent to that, it was conveyed to me that, were I to raise the matter again, Her Majesty's Government would consider it more convenient if it were raised in the form of an Unstarred Question. That being so, I put down the Question which stands on the Order Paper to-day.
§ This matter is concerned with the licensing of exports to China. I submit that our export trade is vital to the existence of this country. It is vital, indeed, to clothe with a living reality the slogan of the Chancellor of the Exchequer, "Trade, not aid." It is from that angle that I propose to approach the subject. May I say to begin with, however, that I fully appreciate the Government's difficulties in this matter? I fully realise the difficulties and I appreciate the understanding with which the Board of Trade is approaching this matter. There was a period in my life when I had the good fortune to be Parliamentary Private Secretary in another place to an Under-Secretary of the Board of Trade and also to the Secretary of State for Foreign Affairs. During that period, I got to know the Civil Service intimately, from the inside, and ever since those days I have had the greatest admiration for the Civil Service, as a body and as individuals, and I am glad to be able to pay them that tribute to-day.
§ The refusal to issue export licences for goods to China is being carried out following on a resolution of the United Nations which was passed on May 18, 1951. I am not one of those who consider that a United Nations resolution is necessarily sacrosanct. I think that if we held that view, it would soon lead to the abrogation of sovereignty on the part of this country. I suggest that the United Nations evaded its responsibilities in regard to this resolution placing an embargo on the export of strategic materials to China. In my submission, it ought to have drawn up a list of materials which all the member nations subscribing to the resolution would have had before them as a guide when they were imposing the embargo. Instead of that, the United Nations left each nation to decide which particular materials they were going to 26 place upon their own list. The consequence is that there is evidence that the United Kingdom is imposing tighter restrictions on trade wilt China than are other countries who are operating a strategic embargo.
In that connection I should like to quote something which the noble Lord, Lord Mancroft, said on March 24 when he was replying to a supplementary question put by my noble friend Lord Stansgate. At the end of his answer Lord Mancroft said (OFFICIAL REPORT, Vol. 181, col. 244):
Unfortunately, many other countries do not carry out their part of the bargain with the same scrupulous accuracy as we do. That has been the cause of much of the trouble.
§ I ask this question: who is to determine the standard of accuracy? In my submission, that is where the United Nations failed in regard to their resolution. Surely it was for the United Nations to determine the standard of accuracy which other countries imposing an embargo could have lived up to. With great respect to Her Majesty's Government, I cannot really subscribe to the view that that is the right method under which to impose this embargo.
§ As I have said, in my view the United Kingdom is imposing tighter restrictions on trade with China than are other countries who are operating a strategic embargo. May I quote a few instances to support my argument? For example, an export licence has been refused by the Board of Trade for the first instalment of an order for £2 million worth of penicillin, streptomycin and sulpha drugs. Now it is understood that these are to be supplied to China by West German firms. Licences have also been refused in recent months, in October 1952, for the export to China of pumps for coalmines, diesel engines for industrial purposes, other stationary engines, electric drills for detecting water in coalmines, electric coal drills, aerial rope, die-stocks for pipes, chasers for die-stocks, twist drills, gear cutters, electric dynamometers, mercury rectifiers, magnetic separators, lightning arresters, voltage detectors and other items, making a total of £10 million worth of general industrial machinery. In addition, a licence was refused at the end of last year for the export of £500,000 worth of cables. It is known that in regard to these items Sweden. France and Germany have been 27 acting on a more conservative interpretation of "strategic" from that apparently adopted by the Board of Trade, and it is to be expected that much of the export trade in machinery to China will in consequence find its way to suppliers outside this country. Another commodity in which trade badly needed by this country has been lost owing to the refusal of export licences is a commodity to which the noble Lord, Lord Ogmore, referred in the course of the interchange which took place on March 24—namely, the tinplate industry.
§ Now I turn to examples which have come to light quite recently illustrating the impracticability of maintaining an embargo on the comprehensive scale now attempted. I suggest that this is a very important matter in connection with the picture which I am attempting to paint. In February Ceylon concluded a 5-year agreement on trade with China to the value of 250 million rupees a year. China is to supply a minimum of 200,000 tons of rice annually, together with other goods to be agreed upon each year, including green peas, coal, wheat flour, newsprint and sulphur.
§ Ceylon will send China 50,000 tons of sheet rubber annually. The Prime Minister, Mr. Senanayake, said that he considered it of great importance to Ceylon's economy to secure a steady and dependable market for rubber at a fair price. It was pointed out also that whether or not rubber was a strategic material for China, rice was a strategic material for Ceylon.
§ I now turn to sales to China of rubber and constructional materials which have been resumed by Burma. The quantities reported to be involved to date are 1,500 tons of rubber and 300 tons of iron and building materials. At the same time, the Government of Burma has foregone any further financial aid from the United States. Now I turn to Japan. The news that Japan had lifted her embargo on the supply of no fewer than 97 classes of commodities to China is now followed by the announcement that she is to resume the sale to China of textile machinery and fertilisers in return for Chinese coal. In the course of the next three months alone, 157,000 tons of Kailan coal will be delivered to Japan in exchange for 860,000 dollars' worth of textile machinery and 400,000 dollars' worth of chemical fertilisers and other goods.