HC Deb 27 October 1955 vol 545 cc366-7
32. Mr. H. Wilson

asked the President of the Board of Trade if he will make a statement about the trade and payments agreement recently signed with the Japanese Government.

Mr. P. Thorneycroft

Yes, Sir. These negotiations took place against the background of a rising Japanese sterling balance and it was the principal object of our delegation to obtain satisfactory assurances that the Japanese Government would take steps to correct the imbalance between Japan's sterling receipts and her sterling payments. I am glad to say that these assurances were given to us.

The Japanese Government are budgeting this winter for increased sterling expenditure. Secondly they have assured us that they intend to eliminate practices tending to discriminate against sterling goods. Thirdly they have given new or increased import quotas for a number of products of interest to United Kingdom and colonial exporters. On our side we are continuing unchanged the previous quotas for the import of Japanese goods except that the quota for canned salmon has been increased from £2.2 million to £4.7 million.

The trade arrangements run for a year from the beginning of October but are subject to review in February. The Sterling Payments Agreement has been extended until 30th September, 1956.

Mr. Wilson

Does not this answer represent an admission that the Government made a very serious and irresponsible miscalculation at the time of the original Japanese trade agreement, which was debated in the House on 10th February last year? Does the right hon. Gentleman not recall that during the debate the present Minister of Supply commended the Agreement to the House on the ground that Japan was chronically short of sterling at that time and, in consequence, Lancashire must bear some very serious burdens? Now the Government have to admit that miscalculation to a tune of £50 million to £100 million a year.

Mr. Thorneycroft

I think that the answer is that Japan was short of sterling at that time.

Mr. J. Amery

Does my right hon. Friend envisage that the Agreement will lead to any increase in Japanese textile exports to the Colonies?

Mr. Thorneycroft

I think that' there will probably be an increase of trade both ways under the Agreement.

Mr. Woodburn

Will the right hon. Gentleman say whether he was able to get any agreement that Japan would cease the practice of "jumping the gun" by plagiarising the designs of this country before they reach the Middle East?

Mr. Thorneycroft

Discussions on that matter have been carried on, but separately from this Agreement and on an industrial basis which has so far proved reasonably satisfactory.

Mr. S. Silverman

Does the right hon. Gentleman not realise that the arrangement made twelve months ago, on the basis that Japan was short of sterling with which to buy British goods, was a very severe blow to the Lancashire textile trade, one more blow added to a great many others in recent years? In view of that fact that it appears from his answer that Japan now has a surplus of sterling and is no longer suffering from the shortage which the Government thought justified their blow at Lancashire, what steps will the Government now take to make good the damage?

Mr. Thorneycroft

The hon. Membet for Nelson and Colne (Mr. S. Silverman) will appreciate that one of the results of the Agreement is to increase the amount of sterling purchases which Japan will make; but with regard to Lancashire, it preserves a very rigid restriction on the import of Japanese grey cloth into Lancashire to the level of £3 million sterling, almost the whole for re-export.