ANTI-DUMPING DUTY (ALARM CLOCKS) (Hansard, 18 July 1969)

§ The Minister of State, Board of Trade (Mr. William Rodgers)
I beg to move, That the Anti-Dumping Duty (No. 1) Order, 1969 (S.I., 1969, No. 895), dated 2nd July, 1969, a copy of which was laid before this House on 3rd July, be approved. This Order has been made under the Customs Duties (Dumping and Subsidies) Act, 1969. It imposes an anti-dumping duty of 2s. 0d. each on mechanical alarm clocks of a value less than 12s. 0d. each originating in the People's Republic of China. In accordance with normal practice there is provision for relief under Section 2 of the Act in respect of any imports which are shown to the satisfaction of the Board of Trade not to be dumped or not to be dumped to the full extent of the duty.
An application was received from the British industry in July, 1968, alleging dumping by China. Czechoslovakia, Hungary, Poland and the U.S.S.R. with consequent material injury. Following discussions with the British industry and the provision by them of certain essential additional information, the Board of Trade were satisfied that a prima facie case had been made for an investigation, and a public announcement that the Board of Trade were considering the application was published on 22nd November, 1968 in which representations from interested parties were invited.
The Board of Trade established fair market prices for alarm clocks from each of the countries named in the application. To do this, use was made for the first time of the powers granted to the Board of Trade in the Customs Duties (Dumping and Subsidies) Amendment Act, 1968, which has since been consolidated in the Customs Duties (Dumping and Subsidies) Act, 1969. These powers enable the Board of Trade to determine fair market prices, in the case of state-trading countries, by reference to the price of identical or comparable goods exported to the United Kingdom from another country.
In this case the fair market prices were established by reference to the price of similar alarm clocks from the Federal Republic of Germany. The fair market prices were found to be higher than the 1175 c.i.f. prices of imports from each of the countries named in 1968 by amounts, varying according to country, between 2s. and 3s. 9d. per clock.
The House will not expect me to go into details of our findings in relation to dumping and consequent material injury which were based on financial and other information given to the Board of Trade in strict confidence. But, I can assure the House that the case was investigated very thoroughly and our findings were based on a careful study of all the evidence.
Following discussions with the countries concerned, the trading organisations of the U.S.S.R., Poland, Hungary and Czechoslovakia decided to raise their prices for all shipments entering the United Kingdom from 4th July to the fair market levels determined by the Board of Trade. These assurances have been accepted; we shall see that they are implemented, but otherwise no further action is to be taken.
Discussions were also held with representatives of the Chinese Government. No corresponding assurances were received, and an Order has therefore been made. If satisfactory assurances are received at some future time, we will, of course, consider revoking the Order.
The anti-dumping duty in the case of the People's Republic of China took effect from 4th July and I invite the House to approve the Order.

§ Mr. Peter Blaker (Blackpool, South)
On behalf of hon. Members on this side of the House, I welcome this Order. This is a long-standing application. The Minister referred to the application put in on behalf of the industry in July, 1968, but the matter goes back further than that. I take it that the reason that the application he referred to was made in 1968 was that that was the date when the new Act came into effect, but the application had been made on behalf of the industry a number of years before.
I should like to put to the Minister a number of questions because, as he said, this is the first Order made under these powers. I therefore think it is of general interest to industry as a whole and not only to the makers of alarm clocks.

§ Mr. Speaker
Order. This is a debate which has to do with anti-dumping measures against Chinese alarm clocks.

§ Mr. Blaker
I am very sensitive to that point, Mr. Speaker, and I hope I may persuade you that what I am about to say is in order and I think that all my questions will be.
A long time has elapsed since the application was made. It was put in in July, 1968, but already at that time the Ministry had considered two previous applications made by the industry on what must have been very similar facts. Nevertheless, it has taken a year before the Government were able to lay this Order. I recognise that in most cases of a definitive anti-dumping Order six months or thereabouts elapses, but in this case there was a longer period. This was in a situation where I should have expected the time taken to have been shorter because of all the spade-work the Ministry must have put in in relation to applications to the same effect which had already been submitted. Perhaps, therefore, the Minister can explain why such a long time has elapsed.
How does the new procedure which the hon. Gentleman has explained and which is contained in the 1968 Act, now consolidated in the 1969 Act, differ from the former procedure concerning imports from a State trading country? The Minister will, no doubt, be aware of correspondence with my hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin) which was referred to in Committee on the 1968 Bill, when the Minister of State, the right hon. Member for Sheffield, Hillsborough (Mr. Darling), explained the practice then adopted by the Department in dealing with applications from State trading countries before the new procedure provided in the Act was available. He said that the Government normally preferred to operate within the framework of bilateral trading agreements with State trading countries and that the Government normally found it easier and quicker to proceed in that way.
Explaining the way in which the degree of dumping was established, the right hon. Gentleman said: In considering such allegations, we base our decision on a comparison of the landed price…with the ex-works prices of comparable British products and the landed prices 1177 of comparable goods imported from other market-economy sources."—[OFFICIAL REPORT, 29th April, 1968; Vol. 763, c. 882.] That, I understand, is exactly the same procedure as has been used in this case and as laid down in the 1969 Act.
In other words, to establish whether there is dumping and the degree of dumping, a comparison is made with the prices of comparable goods imported from other market economy sources. The Minister has said that the goods chosen for comparison this time were from the Federal Republic of Germany. I should like to know from the Minister how the new procedure, which has been used in this case, compares with the former method.
My third question relates specifically to China. I understand that these alarm clocks have been coming in from China at remarkably low prices, something like 5s. 6d. or 6s. a clock, to which 2s. is to be added as a result of the Order, in addition to the tariff of 2s. 6d. per clock. This is obviously a very low figure, with which it is difficult for the home industry to compete. Can the Minister say what has been the effect in general terms of these dumped clocks on home manufacturers? He has, of course, had to establish that material injury to them has been caused, and I wonder whether he can say to what extent their sales have suffered.
I observe that there is already a quota for mechanical alarm clocks from the Republic of China amounting to about £20,000 worth of such clocks a year. The yearly import figures for clocks of this class for the last four years have been approximately £20,000 or a little below. In 1965, the value was £21,000 and in 1968, £19,500. That is relatively a small quantity of imports. In spite of this fairly small quota, however, it is still possible for material injury to be caused to British manufacturers by dumping. This is an indication of the sensitivity of the market.
My next question is very brief: why was West Germany chosen for purposes of comparison? My last question relates to the policing of these arrangements. Under Article 3 of the Order, as the Minister has rightly pointed out, there is provision for remission of duty in certain cases. This will require policing in relation to China, and there is also the question of policing in relation to Eastern European countries which have given 1178 assurances. It will be necessary, presumably, to see that their assurances about the future prices which will be charged for their clocks are maintained. It would be helpful to the industry if the Minister would say how this policing is to be done. Subject to those questions. I welcome the Order.

§ Mr. William Rodgers
I will try to help the hon. Gentleman, and, in so far as I fail to answer all his questions, I shall certainly do so by correspondence. I think they are important and relevant to this application.
I am sorry that it has taken some time to bring forward this Order but, as the hon. Gentleman said, this is the first case under the Act and, whereas there was an application in September, 1963 for an anti-dumping Order, at that time we did not feel it was justified and so, in a sense, it was necessary in different circumstances to begin our inquiries all over again.
As the House knows, five countries were involved, and in addition it was necessary to carry out further elaborate technical assessments in order to establish precisely what the position has been. I am sorry that it has taken some time. I am sure that it is our wish to bring forward these Orders as fast as possible consistent also with a proper investigation of the facts of the case made.
The hon. Gentleman asked for a comparison between the present procedures and past procedures, and referred to the correspondence between my right hon. Friend the Member for Sheffield, Hillsborough (Mr. Darling) and the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin). Under the old procedure it was a question of enabling dumping to be established by reference to domestic prices in the country of export or, alternatively, the costs of production, or prices to third markets. None of these was suitable for eastern area countries. That is why the new method of comparison of imports into the United Kingdom of comparable goods imported from other, market-economy, sources is now used. There is a significant difference here.
The hon. Gentleman also asked why West Germany was chosen. West Germany is the traditional supplier of 1179 comparable alarm clocks. There are very few from other sources except the sources examined on this occasion. I note what the hon. Gentleman says about the quota not being enough, but I think the case has been fairly made here.
The hon. Gentleman asked about the degree of material injury. Confidential information has been given to the Board in the course of its investigation. I can say that the injury was very serious, but I cannot give the actual figures on this occasion and I do not believe that it would be in the interests of the industry, with which the hon. Gentleman is concerned, that I should do so. The goods are subject to licence, and steps are being taken to ensure that assurances are carried out by the inspection of records by Board of Trade officials and in other ways. We shall do all that we can to ensure that there is no breach.
I hope that, given those assurances, the House will be prepared to accept the Order.