§ 3. Mr. Ovenden
asked the Secretary of State for Trade if he will seek to renegotiate the agreements between the United Kingdom and its former EFTA partners in respect of duty-free import quotas.
§ Mr. Deakins
No, Sir. The present system has been in effective operation for only two years. It is intended to balance the interests of United Kingdom manufacturers and the needs of industrial users. Although the recession in the industry is greater than we expected in 1972, the arrangements still look generally right.
§ Mr. Ovenden
Is my hon. Friend aware that in respect of paper products imported under this quota system the industry tends to regard the competition that it faces from Scandinavian producers as unfair because British producers have to pay about 14 per cent. more for their pulp than do their competitors in Scandinavia? Is there not a case for reviewing quotas to ensure that they reflect the state of home demand? If home demand falls, the size of quotas given to our Scandinavian competitors should reflect that. In any discussions that my hon. Friend has, will he bear in mind that we have lost 20,000 jobs in the industry over the past eight years and that the Scandinavians are now taking three-quarters of the British market for newsprint?
§ Mr. Deakins
The prices that we pay for pulp are not fixed arbitrarily by the Scandinavians, because we also import pulp from Canada. They are world prices, and they cannot be rigged by any one country.
I know that the level of the duty-free paper quotas is a matter of particular concern to my hon. Friend the Member for Gravesend (Mr. Ovenden) and to other hon. Members who have constituency interests in this matter. The opening of duty-free quotas for our former EFTA partners was a discreet act of policy in 1972, designed to maintain the bulk of the duty-free trade that we had built up in our membership of EFTA. Although there may be felt to be some disadvantages 939 from the point of view of imports, there are positive benefits to British exporters if they continue to have duty-free access for most of their manufactured exports to the EFTA markets.
On my hon. Friend's third question, there are provisions for a limited review of quotas. This was to have taken place this autumn, but, in view of the uncertainty of the economic situation in both Britain and the world as a whole, we have decided to postpone those discussions until early next year.
§ Mr. Deakins
The harmonisation process will be completed by 1st July 1977. We are transiting upwards in our duties on paper and board imports, and the EEC countries are transiting downwards. We shall both meet at 8 per cent. on 1st July 1977, and thereafter there is a timetable for phasing out these duties by 1984.