$Unique_ID{COW00562} $Pretitle{405} $Title{United Kingdom Britain's Overseas Relations} $Subtitle{} $Author{Embassy of the United Kingdom, Washington DC} $Affiliation{Embassy of the United Kingdom, Washington DC} $Subject{community britain european member council states overseas british policy co-operation} $Date{1990} $Log{} Country: United Kingdom Book: Britain's Overseas Relations Author: Embassy of the United Kingdom, Washington DC Affiliation: Embassy of the United Kingdom, Washington DC Date: 1990 Britain's Overseas Relations Britain's overseas relations have been shaped by its history as a major trading and maritime power and its concern to maintain peace and to promote global prosperity through international co-operation. Since 1945 Britain has progressively, and largely peacefully, dismantled its Empire. Yet it retains world-wide trading concerns and continuing responsibilities for 14 dependent territories and for the 6 million of its citizens who live overseas. London is a major world financial centre. Britain's overseas investments are the second largest in the world, fast catching up with Japan's. Britain imports over one-third of its food and more than half of its raw material requirements. Exports account for over a quarter of its gross national product (GNP). In a world where communications, information and problems are increasingly on a global scale, Britain regards regional or world co-operation as the best way to attain its overseas objectives. It has diplomatic relations with 165 countries and with around 20 of these it has common security arrangements, principally through the North Atlantic Treaty Organisation. Britain provides development assistance to over 120 independent countries as well as to its remaining dependencies. It is a member of some 120 international organisations, ranging from the world-wide United Nations to regionally based and technically orientated bodies. The principal regional organisation to which Britain belongs is the European Community: Britain increasingly co-ordinates its foreign policy through the mechanism of European political co-operation. As a member of the Commonwealth, which evolved out of the British Empire, Britain is part of a representative cross section of the international community, whose 48 members share a common language and close professional, academic and commercial links. Britain also has strong ties with the United States, including a common language and similar political and cultural traditions. Britain considers that the maintenance of international order, governed by respect for a generally accepted system of law, is vital if international co-operation is to be effective. As a permanent member of the United Nations Security Council, it makes support for the United Nations a central feature of its foreign policy. Administration The general conduct of overseas relations is the responsibility of the Secretary of State for Foreign and Commonwealth Affairs acting through the Foreign and Commonwealth Office (FCO) and over 200 British diplomatic posts overseas. The latter comprise embassies and high commissions in about 130 countries, together with subordinate consulates-general and consulates, and missions at ten international organisations. These posts, like the Foreign and Commonwealth Office, are staffed by members of the Diplomatic Service and locally engaged people. Excluding supporting administrative and communications services, 30 per cent of front-line diplomatic staff and senior locally engaged staff are involved in commercial work such as export promotion and the protection of British commercial interests, 25 per cent in consular/entry clearance services, 18 per cent in political and economic work, 9 per cent in information and 7 per cent in other work. Other departments which have a primary concern with overseas relations include the Ministry of Defence, the Department of Trade and Industry, the Treasury and the Overseas Development Administration (ODA, which is part of the FCO); but the involvement of most has increased with the growing dependence of domestic economic policy on international decisions and with Britain's membership of the European Community. Where questions of overseas policy involve matters within the responsibility of other departments, the FCO formulates policy in consultation with the departments concerned. The balance of responsibilities is a matter of constant adjustment, and the department with the predominant functional interest, even though it may be primarily domestic, takes the lead. This is particularly so in policy concerning the European Community and international monetary matters. In the case of policy towards the Community, the FCO exercises its co-ordinating role at official level through the machinery of the Cabinet Office. Other bodies whose work has an overseas dimension include the British Overseas Trade Board and ECGD (the Export Credits Guarantee Department), which provide export services for industry; the Crown Agents for Oversea Governments and Administrations, which helps to arrange purchases from British aid funds and appointments under technical co-operation programmes (as well as providing mainly purchasing and management services to overseas governments and institutions); and the British Council. The British Council The British Council, established in 1934, aims to promote Britain abroad through cultural, educational and technical co-operation. The activities of the Council, which is represented in over 80 countries, include the teaching of English and the recruitment of British teachers for posts overseas; administering the Government's educational assistance and technical co-operation training programmes; fostering personal contacts between British and overseas people, especially in the educational, professional and scientific areas; running, or helping to maintain, libraries of British books and periodicals overseas and providing information through touring exhibitions and bibliographical services; and presenting overseas the best of British arts and culture. Overseas it acts as education adviser to Britain's diplomatic missions and is responsible for educational assistance in developing countries in which it is represented and for links and exchanges in higher education which require official support. In Britain the Council is concerned mainly with arranging programmes for professional visitors and with the placing, administration and welfare of overseas students. A basic principle is that the Council's work should be of benefit both to Britain and to the receiving country. In 1987-88 the Council assisted 28,050 overseas students, trainees and visitors to come to Britain and 60,400 students learnt English through the Council and associated teaching centres overseas. Apart from FCO- and ODA-funded schemes, the Council provided 1,682 fellowships and 3,212 short-term professional visits to Britain in 1987-88. Many visitors finance all or part of the costs while others are paid for by overseas governments and international agencies. Training in Britain was arranged for 3,340 people and funded by clients. Book, audio-visual and periodical issues made by the Council's 116 libraries around the world totalled 7.4 million and users contributed 1.2 million Pounds to the costs. In many places the libraries have film and video stocks, software demonstration equipment and on-line access to British databases. The Council supported 700 British drama, dance or music events, including experimental work and jazz and rock concerts for younger audiences. In 1988-89 the Council's annual grant from the FCO was 77.8 million Pounds. It also received another 132 million Pounds, mainly from the ODA, to manage various government-assisted programmes. The Council's own programmes are funded by its government grant and by earnings. The latter- 63.6 million Pounds in 1987-88-derive mainly from English language teaching, educational services, examinations, courses and library membership. Business sponsorship provided 670,000 Pounds,and 3 million Pounds was contributed directly by commercial sponsors towards events with which the Council was involved. Membership of the European Community Britain is a fully committed member of the European Community, an association of 12 democratic nations which originated in the need for countries in Western Europe to co-operate in the reconstruction of their ruined economies at the end of the second world war and their desire to use this economic co-operation to promote peace and freedom. In 1952 Belgium, France, the Federal Republic of Germany, Italy, Luxembourg and the Netherlands established the European Coal and Steel Community to include their coal and steel resources within a common market. This was followed by the Treaties of Rome, signed in March 1957, setting up the European Economic Community and the European Atomic Energy Community. Britain became a member in 1973, together with Denmark and the Irish Republic; Greece followed in 1981 and Portugal and Spain in 1986. The separate institutions established by the three Community treaties were merged in 1967. The Community's aim, as set out in the Treaty of Rome and confirmed in the Single European Act of 1986, is to lay the foundations for a closer union between the peoples of Europe on the basis of a common internal market, the gradual approximation of member states' economic policies and a framework of common law. The Community has abolished internal tariffs and some other trade barriers, established a common external customs tariff and made provision for freer movement of labour, capital and services. Member states have agreed to establish a genuinely free internal market by 1992. The Community also negotiates on behalf of its member states in international trade negotiations. Overseas countries having special links with the Community are accorded preferential treatment in aid and the development of trade. The Community accounts for about a fifth of world trade, and nearly half of Britain's trade is with the other 11 member states. Britain plays a constructive part in the development of the Community, which it regards as a means of strengthening democracy and reinforcing stability in Europe and of increasing the collective strength of member states in international trade and other negotiations. In addition, it welcomes the member states' commitment enshrined by a treaty in 1986, to political co-operation on foreign policy issues. Community Institutions Under the treaties major policy decisions are taken by the Council of Ministers, on which member states are represented by foreign or other ministers as appropriate to the subject under discussion. The Presidency of the Council changes at six-monthly intervals, Britain having assumed it for the third time from July to December 1986. Most Council decisions are taken on the basis of a proposal made by the European Commission; some may be decided by majority or qualified majority, with votes weighted according to provisions set out in the treaties. In other cases the Council proceeds on the basis of unanimity. The Single European Act provides for improved decision-taking through more use of qualified majority voting, particularly on internal market measures. Heads of Government meet at least twice a year as the European Council, which takes important decisions and discusses Community policies and world affairs generally. The European Commission puts forward policy proposals, executes decisions taken by the Council of Ministers and ensures that Community rules are correctly observed. It is composed of 17 Commissioners (two from Britain), nominated by member governments and appointed by common agreement, and is pledged to act independently of national or sectional interests. The European Parliament, directly elected by the people in member states at five-yearly intervals, has 518 members, 81 of whom come from Britain. Members sit in eight main groups according to party affiliation and not nationality. The next election will take place in 1989. The Parliament is consulted on a wide range of issues before the Council takes final decisions and these arrangements have been recently improved. The Commission can be removed from office as a whole by a two-thirds majority of all members of the Parliament in a vote of censure. The Parliament can also reject in its entirety the draft annual budget as presented by the Commission and approved by the Council. Members may also put questions to the Council of Ministers and the Commission. The European Court of Justice, consisting of 13 judges, interprets and adjudicates on the meaning of the treaties and of any measures taken by the Council of Ministers and the Commission; it also hears complaints and appeals brought by or against Community institutions, member states or individuals and gives preliminary rulings on cases referred to it by courts in the member states. It represents the final authority on all aspects of Community law. The Single European Act provides for a Court of First Instance to be attached to the Court of Justice. The European Court of Auditors examines all Community revenue and expenditure to see that it has been legally received and spent, and to ensure sound financial management. It draws up an annual report and may submit observations on specific questions as the Community institutions request. Community policies are implemented by regulations, which are legally binding and directly applicable in all member countries; directives, which are binding, as to the result to be achieved, on member states to which they are addressed but allow national authorities to decide on means of implementation; decisions, which are binding on those to whom they are addressed (for example, member states, firms or individuals); and recommendations and opinions, which have no binding force. The Council of Ministers can also indicate a general policy direction through resolutions. In addition to, and separately from, the institutions operating within the Community framework established by treaty, the member states have set up machinery under which they consult each other before taking up final positions on important questions of foreign policy. Known as political co-operation, these consultations include regular meetings of foreign ministers, monthly meetings of senior officials, and contacts at working level among those concerned with particular questions. In addition, the 12 foreign ministries are linked by a secure communications system and a small secretariat assists the Presidency. Finance The Community is financed by a system of levies on agricultural imports; customs duties; the product of a notional rate of value added tax (VAT) levied on a harmonised base at 1.4 per cent; and (following an agreement concluded in February 1988) contributions based on member states' GNP. These are known as 'own resources'. Without some form of adjustment Britain's contributions under the system would be much higher than its receipts from Community policies, because the Common Agricultural Policy (CAP) absorbs about two-thirds of Community spending and Britain's agricultural sector is relatively small. This problem was foreseen during the accession negotiations, and in 1980 the Community recognized that there was a problem for Britain. After a series of annual budgetary refunds the European Council reached an agreement in June 1984 under which Britain obtains a rebate of 66 per cent of the gap between its shares of VAT payments and of Community expenditure. The VAT ceiling of 1 per cent was increased to 1.4 per cent from 1986, partly to meet the costs of enlargement of the Community. In February 1988 member states agreed that in future the ceiling on own resources available to the Community should be expressed in terms of Community GNP rather than, as previously, in VAT. The new ceiling was set at 1.2 per cent of GNP. Because existing measures to control spending on the CAP had been shown to be ineffective, member states also accepted legally binding measures to control both output and spending. They also agreed on a guideline limit on overall agricultural spending (see p 79). The 1984 arrangements for British rebates are to continue. Internal Policies The Single Market In Britain's view, completion of a single, unified market of 320 million people by removing the remaining major barriers to the free movement of goods, services and capital is the most effective means of improving European competitiveness in world markets, so generating wealth and prosperity for its citizens. The Single European Act commits member states to the objective of establishing genuine single market by the 1992 target date. Since the Commission submitted its White Paper 'Completing the Internal Market' to the Milan European Council in June 1985, nearly 200 single-market measures have been agreed, including nearly 50 measures during the British Presidency in the second half of 1986. Nevertheless, a great deal remains to be done. Britain's priorities are the simplification and eventual lifting of customs and other frontier restrictions on the free movement of goods, the removal of technical barriers to trade, the liberalisation of public purchasing and the freeing of markets in services, especially financial services and transport. In 1988 the Government launched a campaign to bring home to British businesses the importance of 1992 and to encourage companies to plan ahead to meet the challenge it represents. Transport Britain favours the establishment of a deregulated transport system within the Community, and has welcomed the June 1986 agreement by transport ministers to abolish all quota restrictions on the movement of road haulage in intra-Community trade by 1992. In January 1988 new measures to increase competition in civil aviation came into effect. Britain's links with other member states will be improved as a result of the 1986 decision taken by Britain and France to facilitate the construction and operation of a rail link under the Channel. Industry Community action seeks to encourage the development of new European high-technology industries and the restructuring of older ones. The ESPRIT programme supports research in advanced microelectronics, information processing, software technology, office automation and integrated manufacturing while the BRITE project is designed to promote the use of advanced technology in motor vehicles, aeronautics, chemicals, textiles, engineering and other industries. Member states also participate in the Eureka programme set up to improve European performance in high technology. The Community is pledged to abolish state aid to the steel industry and return to a free market. To this end, production quotas for the different categories of steel are to be phased out between 1988 and 1990. In 1987 the Council approved the RESIDER programme aimed at assisting the development of new economic activities in regions affected by the restructuring of the steel industry. The Community's policy on shipbuilding is that state aid to the industry should help it to adapt to prevailing market conditions. Employment Britain believes that the Community has an important role to play in fighting unemployment. In December 1986 the Social Affairs Council agreed an action programme for employment growth with the aim of promoting new businesses, improving the working of the labour market, better training, and more help for the long-term unemployed. It was based on proposals put forward by Britain, the Irish Republic and Italy. Other measures agreed or adopted during the British Presidency included a Commission action programme on small and medium-sized enterprises which was endorsed in outline, 1,000 million Pounds in loans to help small businesses gain access to new technology and a Council resolution emphasising the importance of cutting administrative burdens on business. The Environment International co-operation is often necessary to deal with environmental pollution which does not respect national boundaries. The Community has been active in this area for some 15 years and its role has been given explicit legal recognition in the Single European Act. Community instruments are concerned with such issues as water and air pollution, the disposal of wastes, noise and the protection of wild birds. Britain is actively participating in negotiations to reduce emissions from large power plants as part of the effort to reduce acid rain; in September 1986 the Government announced that three major coal-fired power stations would be retrofitted with flue gas desulphurisation equipment over the period from 1988 to 1997 at a cost of 780 million Pounds and that in future all new coal-fired stations (some 6,000 megawatts of existing generating capacity) would be fitted with similar technology. In May 1987 this was followed by the launching of a new 170 million Pounds ten-year programme to install low nitrogen oxide burners at the 12 largest power stations. In June 1988 Britain, along with the other members of the Community, agreed to reduce the level of emissions from power stations. Britain is to reduce its airborne emissions of sulphur dioxide by 60 per cent from 1980 levels over the next 15 years, and emissions of nitrogen oxide are to be similarly reduced by 30 per cent over the next ten years. Britain is also concerned about pollution from vehicle exhausts, and, following a British initiative, the Council of Ministers adopted a directive in March 1985 providing for the introduction of unleaded petrol throughout the Community not later than 1989. In 1987 a directive was adopted allowing for the reduction of exhaust emissions from motor vehicles over a five-year period from 1988. Member states also agreed to fund further research into protection against radiation and in September 1987 the Community signed the Montreal Protocol to the Vienna Convention for Protection of the Ozone Layer. In 1987 Britain, six other Community member states, Norway and Sweden agreed to phase out the dumping of harmful wastes in the North Sea by the end of 1989 and of marine incineration by 1994. Agriculture Decisions on the level of Community support prices for agriculture are taken annually on the basis of proposals presented by the European Commission. Over many years these support prices have not been adjusted sufficiently to take account of technical progress in agriculture which has caused a continued increase in production. The growing market imbalance has led to the creation of unwanted food surpluses. To deal with the problem, the Agriculture Council, under British chairmanship, agreed in December 1986 to reduce Community milk production by 9.5 per cent over two years and to restrict recourse to market intervention in the beef sector, thereby effectively reducing beef support prices by 13 per cent. In February 1988 member states agreed a guideline limit on overall agricultural spending and introduced the concept of 'stabilisers' through which automatic cuts will be made in the Community guaranteed price for a commodity if agreed production levels are exceeded. To complement these arrangements and to discourage overproduction further, member states agreed a set-aside scheme to take some agricultural land out of production. Fisheries Britain has a particular interest in the control of Community fishing since a sizeable proportion of the total catch taken in the area bounded by member states' 200-mile limits is in British waters. It therefore took an active role in negotiations on an agreement reached in 1983 on a new Community fisheries policy; this covers access to coastal waters, conservation of fish stocks, the allocation of catch quotas among member states within each year's total allowable catch, enforcement of these rules and financial aid to promote the adaptation and development of the Community's fishing fleet. Other Policies The European Social Fund assists areas of high unemployment by providing grants towards schemes of training, job creation and geographical mobility of workers. The European Regional Development Fund provides grants for industrial and infrastructure projects in the less-developed or industrially declining regions of the Community with the aim of reducing existing imbalances or preventing the creation of new ones. In 1987 Britain was allocated some 391 million Pounds from the Regional Development Fund and 431 million Pounds from the Social Fund. Britain also receives about a fifth of the lending of the European Investment Bank, which was set up in 1958 to provide finance on a non-profit-making basis for investment to develop the Community's less-favoured regions, to modernise industry and to help projects of common interest to two or more member states. The European Monetary System was established in 1979 to promote monetary stability in Europe. It consists of an exchange-rate mechanism, a monetary unit known as the European Currency Unit (ECU-based on a 'basket' of national currencies including sterling, the value of which is recalculated daily) which is used within the Community for budgetary and other purposes, and enlarged Community short- and medium-term credit facilities. The member states are also committed to the establishment of a European Monetary Fund. Britain has participated in the system from the outset, although not in the exchange-rate arrangements, and has deposited 20 per cent of its gold and dollar currency reserves with the European Monetary Co-operation Fund in exchange for ECUs. The Government intends that Britain should join the exchange-rate mechanism when conditions permit. Britain has given high priority to Community action to combat drug trafficking and terrorism. In October 1986 a meeting of ministers responsible for these subjects set up a high-level working group to study ways of improving co-operation against crime and terrorism and an action plan to fight drug abuse. The Community is also committed to closer co-operation in the fight against AIDS. External Relations The aim of European political co-operation on foreign policy issues is to maximise the influence of the Twelve in international affairs; it takes place outside the framework of the Treaty of Rome. The six original Community members first decided to co-operate on foreign policy matters in 1970 and it was then decided to establish separate arrangements to cover foreign policy co-operation. Successive political agreements and declarations have extended the scope of the process. Since Britain's accession in 1973, it has played a leading role in developing European political co-operation; as the result of a British initiative, the Single European Act, which came into effect in July 1987, places the basic commitments on a treaty basis for the first time.