HC Deb 17 December 1962 vol 669 cc1033-44

10.25 p.m.

The Minister of State, Board of Trade (Mr. Alan Green)

I beg to move, That the Anti-Dumping Duty (No. 2) Order 1962 (S.I., 1962, No. 2614), dated 29th November, 1962. a copy of which was laid before this House on 29th November, be approved. This Order, under the Customs Duties (Dumping and Subsidies) Act, 1957, imposed an anti-dumping duty of Is. per lb on lithium carbonate originating in Canada. Lithium carbonate is an ingredient in vitreous enamels used on staves, refrigerators and other domestic appliances. This duty has been imposed in unusual circumstances, and I should like to give the House an account of the background.

The Board of Trade announced in September that it was considering an application from the British producers for anti-dumping duties on lithium carbonate—and also on a related product, lithium hydroxide—imported from the United States and Western Germany, and in early October the Board announced that it had accepted the extension of the application to lithium carbonate imported from Canada. The Board has not yet completed its full consideration of the application as a Whole.

Provided we are satisfied that the provisions of the Act are met we are ready to take appropriate action against serious "forestalling" or the equivalent — that is to say, if during the investigation of a case an exporter tries to build up stacks in the British market in anticipation of a passible anti-dumping duty, of if he is so slow in providing information that imports can continue without danger of penalty for longer than would otherwise have been the case. I emphasise that these circumstances arise very seldom, and up to now we have averted the danger by obtaining satisfactory undertakings from the exporters concerned.

In the case of Canadian lithium carbonate, the Canadian exporter was notified of the prima facie case for inquiry under the Act on 14th September, and was given until 19th October to make representations. This was in line with the Board's normal practice. By that date the firm concerned strongly denied dumping, but did not provide evidence to cause us to alter our opinion that they were dumping. We were willing to allow them more time because examination of other aspects of the case was not then complete, and lack of the resulting evidence was not yet holding up the completion of the case.

By late November, however, we could forsee that a decision might soon be held up simply and solely by lack of this evidence; at the same time, we learned that a consignment from Canada was imminent. We considered that it would be wrong to allow the consignment to appear on the British market at what, as far as our existing information went, would be a dumped price. Accordingly, we asked if the exporter would be prepared to hold up the shipment or, if it was already on the way, to give an assurance that no sales would be made from it until the case was finally settled. He was not prepared to do this. My right hon. Friend decided that in these circumstances we should take immediate action.

On our existing information Canadian lithium carbonate has been sold to Britain at an export price lower than the fair market price in Canada; that is to say, it has been dumped within the meaning of the Act. On existing evidence sales of Canadian material have caused material injury to the British lithium industry. In the circumstances, anti-dumping action appeared to be in the national interest. My right hon. Friend was accordingly satisfied that the three conditions for imposing duties under the Customs Duty (Dumping and Subsidies) Act, 1957 were fulfilled. The duty of ls. a lb. is equal to the margin of dumping established on the present evidence. The Board of Trade remains ready to consider further evidence from the exporter. If we were satisfied by this that he was not dumping, the Order could be revoked. The Act provides for him to claim the refund of any duty paid in the meantime.

We have imposed the duty with a good deal of reluctance. I emphasise that there has been no change in our normal practice of not interfering with ordinary trade while an anti-dumping case is under consideration. But, as an exceptioned measure to meet an exceptional situation, I commend the Order to the House.

10.30 p.m.

Mr. Douglas Jay (Battersea, North)

I am interested in the Order because the President of the Board of Trade has just been rebuking the Canadians for too free use of anti-dumping duties against us. No sooner has he done this than he brings forward this Order and imposes it solely on Canadian exports.

That does not necessarily mean that there is no case for it. I did not think the Parliamentary Secretary made out a very clear and convincing case, however. He asserted that harm was being done to what he called the lithium industry, Or the producers, but he did not tell us what the harm was or the damage which would result to British industry if the duty were not imposed. It may be that it would be serious damage, but we were not told.

I should like to ask him some questions. The Board of Trade rather frequently brings along these antidumping duties on chemical products—at any rate, we had the instance of fertilisers last summer. There are people who say that whenever I.C.I. go to the Board of Trade and demand an antidumping duty on some imports, very often on a product of which they are the sole producers in this country, the Board of Trade gives way with surprising ease, or at least with greater ease than in the case of other people. It might be because I.C.I. have had rather more practice in making out cases under the anti-dumping legislation than have other people.

I therefore ask the Minister whether the people he calls the producers, whether the lithium industry, are I.C.I. If not, will he tell us who else they are? Secondly, what is the total damage which is being done by these imports from Canada and, thirdly, how long does he expect the duties to remain in force? Does he look on them as a temporary measure to tide over an emergency or crisis for a few months, or are we introducing new import duties on an industrial raw material for an indefinite period ahead?

10.33 p.m.

Mr. Forbes Hendry (Aberdeenshire, West)

I am very sorry to intervene at this late hour of the night, but it seems to me that in introducing this Order my right hon. Friend is departing from the established precedent in bringing in an Order affecting only part of an industry. I should like him to give me some answers to questions arising out of that.

In parts of my constituency the paper industry has been worried about dumping by competitors in Canada, Australia and East Germany, and on several occasions has made application to my right hon. Friend the President of the Board of Trade for the imposition of antidumping duties. The industry has always been answered with the argument that before the Board of Trade can consider action under the legislation it must be satisfied not only that dumping and subsidisation is taking place but that this is causing or threatening to cause material injury to the industry as a whole in the United Kingdom. The answer has been given to the various paper makers in my constituency that the specialty on which they are claiming is only part of the great paper-making industry and that the dumping from elsewhere involves too small a part of the paper-making industry as a whole to make any definite impression an the industry.

I do not know what the lithium industry is. It may be part of the great chemical industry. On the other hand, it may be part of the vitreous enamel industry. But as far as I know there is no separate industry in this country known as the lithium industry. I think that the Board of Trade must regard the paper-making specialties to which I referred quite as much as industries on their own account as the lithium industry.

To quote an example, in my constituency there is a small paper mill employing about 300 people in the manufacture of duplicating paper, about 10,000 tons of it a year. To the people concerned, this is an industry in itself. It would be impossible for this mill to switch from the production of duplicating paper to another form of paper, because it is on duplicating paper that the goodwill of the concern has been built up and made known to the trade. If this mill were troubled with dumping from overseas the whole place might have to go out of commission, causing several hundred people to be unemployed.

That case is relevant because I have been met with the argument that the Order deals with only part of an industry. I would, therefore, like the Minister to say whether there has been a change of policy on the part of the Board of Trade and whether my paper makers, who are dealing with a highly specialised commodity, may make formal requests to the Board of Trade is this connection if necessary.

I was rather vexed when the Minister said that it was with reluctance that he introduced the Order, because every time an application for anti-dumping duties is asked for, the Board of Trade searches out all the reasons why an Order should not be made. It is desirable, in the interests of industry in general—with particular emphasis on the smaller industries, especially those in the north of Scotland and elsewhere—that the Board of Trade should seek reasons why an Order should be made and not why one should not be made.

10.36 p.m.

Mr. H. Rhodes (Ashton-under-Lyne)

Having heard the remarks of the hon. Member for Aberdeenshire, West (Mr. Hendry), I am tempted to start a discussion on Hong Kong cottons, but I will not. Like my right hon. Friend the Member for Battersea, North (Mr. Jay) I am interested in discovering just who are the producers in this country, because from the experience we have had since the antidumping Act came into operation the only people who have been able to get relief have been the "big boys".

The gigantic organisations—more often than not the chemical industry—have been able to put the whole of their resources behind their efforts and have been able to prove damage simply through having the means to do so at their disposal. The Act is rapidly gaining a bad reputation. I said when we were considering it, before it went on to the Statute Book, that it was a bad Measure. I still think it is and, in view of the comments made by hon. Members about the Order, I hope that we shall be given a satisfactory explanation by the Minister.

10.38 p.m.

Sir James Duncan (South Angus)

I intervene in the debate for two reasons. First, the Order concerns Canada and as one who has always been in favour of Empire preference as far as possible and Empire free trade, my ears pricked up, metaphorically speaking, when I heard that the Order was directed solely against Canada. Secondly, I understand that there is no production of lithium carbonate in this country. I understand that it is a mineral, a mineral of itself, and not a product of minerals. I understand, too, that it is used as one component in the manufacture of paint and enamel and someone told me, with what justification I do not know, that it is used in doing something to brown bread, Whether or not that is true I do not know.

I am intrigued by the Order. Having listened to the Minister, I realise that there may be some point in his introducing it, but as one who has suffered in the past in the agricultural sphere from the difficulties of proving cases of agricultural dumping, I am interested to note the speed with which the Board of Trade is acting now. Like the right hon. Member for Battersea, North (Mr. Jay) I, too, would like to know to what extent the Order is in the national interest. Who are the alleged producers? I do not think there are any British producers, although there may be British users. To what extent is the imposition of this duty in the national interest? Is it a product of which a good deal is used and, if so, for what is it used?

The third question one has to deal with is the extent to Which it is having a serious effect on the British industry? After all, if the British industry that uses this material can get it at the market price from elsewhere and cannot get it at home, we should know where it normally comes from, and why there is this special reason for taking forestalling action against our oldest Dominion.

10.40 p.m.

Mr. Cyril Bence (Dumbartonshire, East)

When I first saw this Order, I made inquiries which led me to understand that lithium carbonate is used for hardening glass, especially for lenses. We are imposing a duty of ls. a lb on the Canadian price of this substance, but are the Canadians exporting this same mineral to Japan, for instance, at the same price at which they send it here? If so, are we not making this product dearer here while the price remains the same in Japan, or in some other country?

I do not know whether or not this mineral is produced here. It being a mineral, I presume that it is mined or quarried. By whom is it mined or quarried in this country, and where? If it is not produced here, how can it be a threat to our industry if it is imported as forming part of something we manufacture? It must be to our advantage to import as cheaply as we can. If there are a few quarrymen or miners extracting this mineral in this country, I can understand them appealing to the Government to bring in this Order, but it is a serious matter for a manufacturing nation like Britain to impose this duty on an imported substance if lithium carbonate is not mined or produced here. The duty means that our costs are driven up as compared with, say, those of Japan.

The Explanatory Note states: (This Note is not part of the Order, but is intended to indicate its general purport.) This Order imposes on Lithium carbonate originating in Canada an anti-dumping duty of 1s. 0d. per lb. Why is the duty imposed only if the country of origin is Canada? Is Canada the only country in which lithium carbonate is produced?

Mr. Geoffrey Hirst (Shipley)

It is the only country that is dumping it.

Mr. Bence

Will this imposition make Canadian lithium carbonate more expensive than that emanating from some other country? This Explanatory Note is too brief for such a complicated matter. I had to do a lot of checking to find out what this product is. I learned that it goes into vitreous enamel, and is also used for hardening glass for lenses; that it has a hardening or toughening property.

I hope that the Minister of State will explain this Explanatory Note, and let us know whether this substance is mined or manufactured in this country, what other countries manufacture it, and why we should have to take this sort of action against one of our Dominions, a member of the Commonwealth. I do not know the price of lithium carbonate. If the average price is 6d. a lb., a duty of Is. a lb. is pretty hefty, but if it costs 400s. a lb. then a duty of Is. a lb. is neither here nor there. The Explanatory Note should give us some idea of the general world price, so that we can relate the duty to the price. One shilling a pound has no meaning at all. If it is 1s. per lb. of gold it does not mean a thing. I do not know what the price of this product is. It may be 20s. or 100s. or 3d. per lb. I have no idea. I suppose that those who are in the business know, but as we do not know the names of those in the business it is not much help. We should be told what is the relationship between this Is. per lb. and the world price of the commodity.

10.46 p.m.

Mr. Peter Walker (Worcester)

If the import of this product is endangering the livelihood of one of our industries I congratulate my hon. Friend the Minister of State, Board of Trade on the manner in which he has swiftly dealt with the problem. It is encouraging, without obtaining the full evidence, to know that before the ship reaches these shores such action will be taken. I hope it will be repeated on other occasions in connection with other imports coming to this country.

A point has been raised about the lack of evidence in respect of this product. I wonder if my hon. Friend will be able to tell me the manner in which he will obtain information upon the internal price of the product in Canada. I recall on previous occasions when this type of Order has been brought forward that the Board of Trade has been unwilling to discover or to do anything about discovering the internal price of the product until representation has been made to it by the industry adversely affected in this country. I therefore ask my hon. Friend whether he received a request from such an industry or whether he received evidence, which he accepted, from that industry.

One of the big differences in the manner in which these matters affect large combines and producer bodies on the one hand, and smaller concerns on the other, is that the large combine is able to collate this information whereas the smaller concern is not. I should like to know whether in this Order that we are discussing tonight the information was obtained by the Board of Trade or by some industry concerned.

10.47 p.m.

Mr. Green

I have been asked a number of factual questions and I will do my best to give the facts in reply.

The first question asked by the right hon. Member for Battersea, North (Mr. Jay) was as to whether was concerned in this case. The answer is, "No" The Associated Lead Manufacturers are the sole producers in this country and they represent an industry within the terms of the Act. What they do—perhaps I can answer a number of hon. Members on this point, and particularly my hon. Friend the Member for South Angus (Sir J. Duncan)—is to import the ore and process it here. They import the ore from Rhodesia, so this is not a case of picking on one Commonwealth country. This will, in fact, help another Commonwealth country into the bargain. I hope that there is no suggestion of picking an one country at the expense of another Commonwealth country.

I was asked by the right hon. Member for Battersea, North how long this Order might last. It can be removed at any time, but it will remain in force until the Board of Trade receives evidence which satisfies us that no dumping is taking place.

On the genesis of the Order, it has been suggested that this is directed solely against one country, namely Canada, but I said at the beginning of my remarks that this started with imports from the United States of America and the Federal Republic of Germany. Both the United States and the Federal Republic of Germany ceased to send material in because they had accepted the fact, on the evidence that we had got, that they were liable to dumping duty.

Our difficulty was simply on the matter of time, to get from them the information for which we had asked them within a reasonable time. I am not blaming them particularly far not providing the evidence within the time we asked, but the fact was that the time was running out. A shipment was known to be under way. We could get no undertaking that it would not be disposed of if it was landed here, so on the basis of our knowledge of prices and costs in Europe, the United States of America and West Germany—we were able to make a reasonable deduction about the Canadian price—we had no option but ourselves to forestall the act of dumping against this single producer, representing an industry within the meaning of the Act, that we were quite satisfied was being materially damaged if this material continued to come in at these particular prices.

Sir Harry Legge-Bourke (Isle of Ely)

In the Department's attempts to prevent this happening, was any contact made with the Canadian Government about it, or was it done purely between Her Majesty's Government here and the exporter concerned?

Mr. Green

We had to ask the exporter concerned for the evidence of his pricing because he is really the only person who can give the evidence. His Government cannot. So we dealt with the firm, as we must, and it is only because of the delay in getting the information that I am asking for the Order now, and for no other reason.

If the Canadian producer comes forward with his own evidence—for which, I say again, we have asked more than once—and convinces us that he is not in fact dumping, on the basis of his own true figures, we shall revoke the Order and he will be entitled to get back the duty which has been levied on this consignment which is on the way, if it is landed. We are not seeking to impose an unfair burden on him. We are not picking on one particular country in this matter. We are not at all endeavouring to change the policy under which we operate the anti-dumping duty procedures.

The Is. represents about 24 per cent. of the price now ruling, which itself has been driven down, of course, so it is a substantial differential. It is difficult to say what would be a fair price over the years, but the ls. is near enough to a 24 per cent. duty.

Mr. Jay

May I press the hon. Gentleman to answer two questions which he has not answered? First, what is the material damage which is being done to the British industry? Who is being damaged, and where? Who is likely to be thrown out of work, how many people, and where? Secondly, I do not think that the hon. Gentleman answered the question asked by one of his hon. Friends below the Gangway. On what information did the Board of Trade decide that the price charged by the Canadian producers in Canada was at a certain level? Did the Government, as the hon. Gentleman appeared to say, merely presume that it must be at some sort of level because of information they had about prices in other countries and because the Canadian producers did not answer the questions addressed to them?

Mr. Green

I quite understand why the right hon. Gentleman asks his questions, but, with respect, he will appreciate that I cannot be expected to go into too many commercial details or give away information which has been given to us in confidence. I cannot give all the details for which he asks.

I gave the name of the firm in this country, Associated Lead Manufacturers, who are the only producer. Our information, on which we rely, is that, if this dumping had gone on, that manufacturer would have certainly had to stop production of this material and its associated products. There would have been no industry, therefore, of this kind left in the country, since it was the only remaining one. One could, by inference, suggest that a little damage would have been done to producers of the ore in Rhodesia because there would have been no imports from there. I do not make much of that, but it is a contingent point.

Mr. Jay

The hon. Gentleman does not suggest that that is a good ground for applying the anti-dumping duty, that we could switch our source of supply from one overseas country to another?

Mr. Green

I did not try to make anything of it, but I said that it was a contingent point having regard to what has been said in this short debate.

We are quite satisfied that this particular industry, the sole producer in this country, would have been driven out of the business if the process had continued. We did not think this constituted anything but material damage, which is one of the criteria under which we apply the Act. I would think it material damage when the sole producer is clearly hurt. We are quite convinced this is the case. We got our figures on the basis that till we have got—I must repeat it, because it is an unusual circumstance: I accept that, and I said it at the beginning—till we have got evidence direct from the Canadian producer, which we have sought, we have no means of checking against his figures the figures which we have worked out for ourselves. We have no means of doing it.

I tell the House quite frankly that this is an unusual situation. This is why, I repeat, if the Canadian producer will come along with his figures and prove that we are wrong we shall revoke this Order and refund the duty to him. We shall certainly do that, but we could not risk the continuance of the present situation because of delay in providing us with the evidence for which we had asked. We had, therefore, to go on such evidence as we could find for ourselves, and that evidence, the existing evidence, convinces us that there is dumping here which constitutes material injury to the sole producers of this material in this country.

Sir J. Duncan

It is not clear to me. This stuff, this raw material, a mineral, which Associated Lead Manufacturers manufacture—I do not see why they could not import it from the United States or Canada or Rhodesia or anywhere else. Or is it that their competition would come from the manufacturing side? That has not been made clear.

Mr. Green

The point, if I may stress it again to my hon. Friend, is this. Associated Lead Manufacturers import ore from Rhodesia. They process it. Lithium carbonate and its derivative, lithium hydroxide, come from Canada and also from the United States and West Germany. It is not an ore. It is a processed article, which they themselves manufacture.

Question put and agreed to.

Resolved, That the Anti-Dumping Duty (No. 2) Order 1962 (S.I., 1962, No. 2614), dated 29th November, 1962, a copy of which was laid before this House on 29th November, be approved.