§ 10.12 p.m.
§ The Minister of State, Board of Trade (Mr. Edmund Dell)
I beg to move,That the Anti-Dumping Duty (No. 2) Order 1968 (SI., 1968, No. 2063), dated 30th December 1968, a copy of which was laid before this House on 2nd January 1969, be approved.This Order has been made under the Customs Duties (Dumping and Subsidies) Act, 1957, as amended by the Customs Duties (Dumping and Subsidies) (Amendment Act 1968. It imposes anti-dumping duties ranging from 5d. to 35s. per dozen on files and rasps originating in Portugal and ranging from 4s. to 20s. per dozen on files and rasps originating in Australia. In accordance with normal practice, there is provision for relief under Section 3 of the 1957 Act in respect of any imports which are shown to the Board of Trade's satisfaction not to be dumped or not to be dumped to the full extent of the relevant duties.
An application alleging dumping, with consequent material injury, was received from the British industry in March, 1968. Following discussions with the industry and the provision of certain essential additional information, the Board of Trade was satisfied that a prima facie case had been made for an investigation. A public announcement that the Board were considering the application was made on 28th June 1968, in which representations from interested parties were invited.
This is not the first time that the British industry has sought anti-dumping action on imports of files and rasps from Portugal. Following an earlier application some years ago, the Board of Trade found that there was dumping by the Portuguese supplier, but was not satisfied that the rate of imports from Portugal and their trend were such as to cause or threaten material injury to the British industry. When rejecting that application in September 1963, it was made clear to the Portuguese that any increase in imports at dumped prices would no doubt lead to a fresh application and that it could not be assumed that the same decision would then be reached.
In fact, shipments from Portugal continued to decline in 1964 and there were no significant increases in 1965 and 1966. 720 However, there was a considerable increase during 1967 and again in the early months of 1968. In addition, an Australian supplier first entered the British market in a significant way in the second half of 1967. These developments led to a renewed application from the British industry. Our inquiries established that imports from both sources were being dumped by substantial margins. We were also satisfied that the rate and trend of dumped imports from Portugal and Australia were such that the dumping was causing material injury to the British industry and threatening further injury, and that anti-dumping action against the dumped imports would be in the national interest.
The House will not expect me to give detailed reasons for our findings in relation to dumping and consequent material injury. These were based on financial and other information given to the Board of Trade in strict confidence. However, I can assure the House that, in accordance with our usual practice, the case was investigated most carefully—both in relation to the dumping and also the question of consequent material injury—and our findings were based on a thorough study of all the evidence.
I will comment on the rather complicated Schedule to the Order. Files and rasps vary according to type, cut and size and the margins of dumping that we found vary considerably from item to item. To have imposed the exact margin of dumping on each item would have been impracticable; it would have meant hundreds of different duties, and Customs officers at the ports would not have been able in practice to distinguish between many types. A uniform high rate of duty would have exceeded the margin of dumping that we found on many types and would, therefore, have been unfair to the exporters concerned, despite the provisions we make for refund of duty in such cases.
Conversely, a uniform low rate of duty would not have given the British industry the protection to which it is entitled against the more highly dumped items. The present Schedule represents the best compromise which the Board of Trade could find in consultation with Customs. In the case of Portugal, where the margins of dumping vary more widely, we have sub-divided files and rasps into 721 three classes and imposed duties varying by size. In the case of Australia, where the dumping margins vary much less by type of file, the Schedule imposes duties varying only by size. The classes and sizing of file are described in the Order in accordance with the recognised British standards.
Both the procedure followed in reaching a decision on this case, and the decision itself, were in conformity with Article VI of the G.A.T.T. and with the provisions of the International Anti-Dumping Code which was agreed as part of the Kennedy Round negotiations. The anti-dumping duties took effect from 3rd January, 1969.
§ 10.18 p.m.
§ Mr. Peter Blaker (Blackpool, South)
My hon. Friends have on many occasions expressed support for freer trade, but there is, of course, nothing inconsistent with that position in welcoming antidumping action in an appropriate case. Indeed, I suggest that the two go together, because as trade gets freer, as we hope it will, the temptations to dump them are more pronounced and the bad effects of dumping on the home producer are more severe. Anti-dumping action therefore becomes more important to take when it is appropriate.
The House will have noted that the two countries from which goods affected by the Order originate are both countries against which there is a nil duty on those goods, namely, Australia, a Commonwealth country, and Portugal, an E.F.T.A. country. It is regrettable that we should have to take anti-dumping action in these two cases, but it is not the first time that anti-dumping action has been taken within either of those groupings and we are, of course, concerned with the action of a very small number of firms in the countries concerned.
I have a question to put to the Minister of State about the relevance of our international obligations to this Order. I believe that no problem arises in the E.F.T.A. case because the E.F.T.A. Convention expressly states that nothing which it contains shall impede the making of anti-dumping Orders. The Australian case is affected by a different agreement, the British-Australian Trade Agreement 722 of 1957, which does not appear particularly to deal with allegations of dumping by either Australia or Britain. Article 12 refers to dumping by third countries, but as I read the Agreement there is nothing dealing with dumping between Britain and Australia.
Article 14 provides for consultation between Australia and Britain in certain cases, but it does not particularly envisage the case of dumping. I wonder whether the Minister could clear up, because it would be useful to have it on record, what the relevance of the Agreement of 1957 is to anti-dumping Orders, whether the Government consider that Article 14, which provides for consultation between the Government in certain cases, applies and whether those consultations have taken place.
The Minister has given some of the background to this Order. The rise in imports of files and rasps from the two countries has been very striking. I understand that from Portugal, in 1966, the value of files and rasps imported was £51,000, whereas in 1968 it was £94,000, almost double. In the case of Australia the rise has been even more striking. In 1966, according to my information, the value of imports was £109 only, whereas last year it was £40,000 in value. I am informed that imports as a proportion of the value of home sales, which of course is a very significant factor, have risen very markedly from 14 per cent. in 1965 to 22 per cent. in 1967. As to material injury, I understand that the home producers claim that their profits as a result of this action have become very low. In some cases they hardly exist. There has been a fall in the number of firms engaged in home manufacture and a fall in the number of employees engaged in the business. It is not simply a question of fewer but larger firms, but fewer employees.
The House will be aware that none of these adverse effects on the home producer are in themselves enough to establish the case for an anti-dumping Order because, as the Minister explained, more than that has to be proved—not only evidence of dumping, but the actual causing or threatening of material injury and it must be in the view of the Government in the national interest that the Order should be made.
723 One or the problems in discussing these anti-dumping cases in the House has been referred to by the Minister. It is that much of the evidence the Board of Trade has to examine both as to dumping and material injury is impossible to divulge to the House because it is commercially secret information. Therefore, I cannot press the Minister too far to divulge the nature of the Board's investigations to the House.
I do, however, take the opportunity to express gratitude to the Minister for inviting me personally recently to visit him in his Department and to meet him and his officials to talk about the methods which the Board of Trade adopts in these cases. It is particularly relevant to mention that now because of the difficulty to which I have referred—that he cannot, in public, go into details on these cases. It was reassuring to me to find from the explanations given of the methods adopted in the investigation of these cases, that they appeared to be efficient and conscientious.
Nevertheless I observe that the antidumping code agreed in the Kennedy Round said in 1967 that it is desirable to provide for equitable and open procedures as the basis for a full examination of dumping cases. That encourages me to ask the Minister whether he will tell the House a little more about the methods of investigation adopted in these cases. Did they include, for example, discussions with the overseas suppliers?
The Minister referred to the fact that the Order applied Section 3 of the Statute. May I take him a little further on the subject of exemptions? Will he say whether the overseas suppliers were given an opportunity to undertake that the dumping would cease, which presumably would have meant that the Order would not have been necessary?
The Government have to consider not only the interests of the home producer in these anti-dumping cases. They have also to consider the effect on the home consumer and I hope that, in his reply, the Minister will comment on that. My understanding is that what are concerned are essentially hand tools, each of which is relatively inexpensive and, presumably, has a certain durability. We are talking not about raw materials but about tools of manufacture.
724 I take it that that means that the effect of the imposition of the duty on the user will to that extent be not too serious. It is true that the duty varies from a few percentage points up to 60 per cent. of the value of the tools in some cases. Nevertheless, for the reasons which I have given, I infer that the effect on consumer prices of the goods manufactured by using these tools is unlikely to be too serious. Perhaps the Minister will comment on that.
Will he also comment on the effect on supplies in the home market? He will have seen in the Financial Times of 3rd January that the United Kingdom representative of a Portuguese undertaking said that, in his view, the action of the Board of Trade amounted to a total prohibition of the company's imports into the United Kingdom. Perhaps the Minister will comment on that point. Will he say whether, in his view, there is an adequate number of suppliers in the United Kingdom and whether competition in this market will continue to exist? Have the Board of Trade felt it necessary to seek any assurance from the United Kingdom manufacturers, whether on supplies or on prices?
I believe that the Minister has made out a case for this Order. We on this side of the House do not intend to oppose it. But I hope that in his reply the Minister will deal with the questions which I asked, for the House would like to have the answers on the record.
§ 10.28 p.m.
§ Mr. George Darling (Sheffield, Hillsborough)
It would be appropriate for me to express on behalf of the manufacturers and workers engaged in the file trade industry their thanks to my hon. Friend for introducing the Order. I have been asked by the Sheffield Amalgamated Union of the File Trades, which has a total membership of about 250, practically the whole of the workers engaged in the trade, officially to thank my right hon. Friend on their behalf.
I agree with the hon. Member for Blackpool, South (Mr. Blaker) that we need to look very carefully at antidumping Orders, and I also agree that the more free trade we have, the better. But I do not think the hon. Member would object if I said that what we are seeking is free and fair trade.
725 There is a problem in that the industry is in the process of contracting, but not of reducing its production. The number of firms is contracting and fewer employees are being employed as the industry goes through a process of rationalisation. We should look at antidumping Orders, including this one, from another point of view. We do not want such Orders to be used to protect inefficiency. In this connection, we can be pleased to put on record that the union to which I have referred is very much concerned about conditions in the industry and is in favour of its being examined to make sure that it comes up to proper standards of efficiency. I realise that this is really a matter for the Ministry of Technology, and I sincerely hope that the Ministry will look carefully at the organisation of the industry to make sure that it does, with whatever help the Government can give, come up to an appropriate standard of efficiency.
I have two other aspects of the matter to raise, and these relate to the importation of files from India. There is some concern in the trade in Sheffield—there are, I think, only two firms engaged in the industry outside the City of Sheffield—that files from India are being dumped—
§ Mr. Darling
I appreciate that, Mr. Speaker. I shall therefore merely remark, to put it on the record, that I know that my hon. Friend has looked into this matter also, as well as the question of the Ministry of Defence buying files from overseas, which has some relation to this Order.
We are pleased in Sheffield, both employers and workers, that the Order has been brought forward. Again, I thank my hon. Friend the Minister of State for the work he has gone in carrying out the investigations and making sure that the wishes of both sides in the industry have been met in this way.
§ 10.32 p.m.
§ Mr. John Hynd (Sheffield, Attercliffe)
I endorse what has been said by my right hon. Friend the Member for Sheffield, Hillsborough (Mr. Darling). 726 Sheffield Members of Parliament have been under considerable pressure for some years—for many years, one might say—on this question of dumping, but it is always a little difficult for the ordinary back bencher or those without access to the information which the Government can have to know whether an allegation of dumping is justified. One hears a lot of allegations about the dumping of various materials and products, and there has always been some question as to how far they can be justified.
The House will recall that the late Member for Brightside, Dick Winter-bottom, raised this matter on many occasions. We were never able to get a clear exposition of the situation or confirmation that there was dumping or that there was something to be said on the other side. I am considerably relieved, therefore, that the Minister has brought in the Order, and I am satisfied from what he said that the Government have completely confirmed that these files from Portugal and Australia come within the category of dumping.
As has been said, Portugal is a member of the E.F.T.A. group. Is there not a provision under the E.F.T.A. agreement that the Government of a country from which dumped goods come have some responsibility in the matter? If so, has the Minister had consultations with the Portuguese Government, and over what period? If he is satisfied that his information is correct, why have not the Portuguese Government taken some steps themselves?
§ 10.34 p.m.
§ Mr. Dell
First, I thank the hon. Member for Blackpool, South (Mr. Blaker) for the appreciation which he expressed regarding his visit to my Department and the information and assistance given to him on that occasion by my officials. Also, I express gratitude to my predecessor as Minister of State at the Board of Trade, my right hon. Friend the Member for Hillsborough (Mr. Darling). Nothing is more warming to my heart than approval from him. My right hon. Friend referred to the Indian situation. On that, I need say no more than that an application has now been made and that if a prima facie case is made, we will, of course, proceed to a full investigation.
727 The hon. Member for Blackpool, South asked about the relevance to the situation of the 1957 Anglo-Australian Agreement. Nothing in that Agreement prohibits either country from taking anti-dumping action which is consistent with our international commitments under Article 6 of G.A.T.T. Both countries have, in fact, taken anti-dumping action against the other. Of course, we keep the Australian High Commission informed of our investigations.
The hon. Member asked whether all parties were kept informed and given an opportunity to comment, and about the method by which the inquiry was carried out. Officials from the Board's tariff division carried out a detailed on-the-spot investigation in the offices of the Portuguese manufacturer concerned and there were discussions with his agent in London. The Australian manufacturer supplied very full information in writing and this was supplemented by discussion in London with his export manager in the course of a visit by the latter to the United Kingdom.
Users of the products submitted their views, both direct and through the importer concerned. The views of all interested parties were, therefore, fully covered and there was a full investigation, including the material injury aspect, in the form of a detailed inquiry by Board of Trade accountants into the financial affairs of the main United Kingdom producers in recent years. The hon. Member for Blackpool, South asked an important question about whether the interests of the users had been borne in mind. Indeed they were, as I have just said. Their views were taken both directly and indirectly through the importer concerned.
As to price, it is certainly my hope that there will be no increase in price as a result of the Order. Indeed, the better use of British capacity which, I hope, will result from the Order should keep prices steady. I have no evidence that supplies will be inadequate.
My hon. Friend the Member for Sheffield, Attercliffe (Mr. John Hynd) asked about provisions under the E.F.T.A. Convention and discussions with the Portuguese Government. Article 17 of the Convention states that nothing in the Convention shall prevent a member 728 State from taking action against dumped or subsidised imports consistently with its other international obligations. We did, of course, keep the Portuguese Government informed of our action in this respect.
The hon. Member for Blackpool, South asked whether the Portuguese and Australian suppliers were given the opportunity to give suitable undertakings in lieu of the imposition of anti-dumping duties. With the large number of sizes and cuts of files and rasps involved and the varying margins of dumping found, the Board considered that any offer to accept undertakings from the dumpers to stop supplying at dumped prices, with the firm administrative safeguard which the Board would require, would be bound to lead to considerable delay. In all the circumstances of the case, the Board did not feel able to delay the imposition of anti-dumping duties beyond 3rd January, 1969. We have, however, informed the Portuguese and Australian suppliers that we should be prepared to consider suspending, and ultimately revoking, the Order if at any stage in the future they give an undertaking to operate the necessary safeguards to stop dumping.
I think that I have dealt with the questions that were put to me, and I hope that the House will approve the Order.
§ Question put and agreed to.
That the Anti-Dumping Duty (No. 2) Order, 1968 (S.I., 1968, No. 2063), dated 30th December, 1968, a copy of which was laid before this House on 2nd January, 1969, be approved.