HC Deb 03 November 1975 vol 899 cc6-13
2. Mr. Blaker

asked the Secretary of State for Trade what representations he has received from the TUC and the CBI regarding import controls; and what response he has made.

Mr. Shore

Like other Ministers, I have recently received papers on this subject from both the TUC and the CBI. The Government will obviously give them careful consideration.

Mr. Blaker

Although there would be a general welcome for a tightening up of the procedures against dumping, is the right hon. Gentleman aware that a number of his right hon. Friends, including the Secretary of State for Foreign and Commonwealth Affairs and the Chancellor of the Duchy of Lancaster, have spoken out against the imposition of import controls in other circumstances? Does the right hon. Gentleman recall that in Tokyo on 18th September he himself said that the British Government saw no attraction in the imposition of import controls? Will he confirm that that is still his view?

Mr. Shore

We are very willing indeed, as I have previously indicated, to use our powers whenever serious prima facie evidence of dumping is made available. I am perfectly willing to look more widely at the general question of anti-dumping measures, in so far as any suggestions are compatible with the agreed GATT arrangements.

Various statements have been made about imports. I think that the hon. Gentleman can certainly take it for granted that the view of the British Government is that the major purpose is to avoid trade restrictions, by promoting the expansion of the world economy and international trade. However, we cannot rule out circumstances in which it may be inevitable and in the national interest for us to proceed in a different way.

Several Hon. Members rose

Mr. Speaker

Order. There are a great many Questions about import controls.

I propose to move on to Question No. 10 as quickly as I can and not now to allow many supplementary questions.

10. Mr. Rooker

asked the Secretary of State for Trade if he will make a statement on his policy regarding import controls.

15. Mr. Canavan

asked the Secretary of State for Trade whether he will now introduce selective import controls.

28. Mr. Peter Morrison

asked the Secretary of State for Trade whether he plans to introduce import controls.

30. Mr. Thorne

asked the Secretary of State for Trade whether he is prepared to institute selective import controls in such areas as the field of textiles, footwear and motor cars at an early date.

Mr. Shore

My prime objective is the early revival and expansion of world trade. But I do not rule out protective measures for particular industries suffering or threatened with serious injury as a result of increased imports. In any particular case we would have to consider all the relevant factors, including the fact that other countries can also use protective measures, before deciding where the balance of advantage lay.

Mr. Rooker

Does my right hon. Friend accept that he has been looking at this matter for far too long to please workers in this country? While we are in a situation in which the multinational companies in Britain are in effect controlling our exports, we have the right to demand control of imports.

Mr. Shore

My hon. Friend will accept that the trading relations between countries are, perhaps, somewhat more complex than the policies, although they are relevant to the trading relationships, of particular multinational companies. Although I understand the position of and sympathise with all my hon. Friends who, naturally, have pressure upon them from constituents who are worried about the future, and who indeed are perhaps already affected by the present, we must face the fact that we are in the middle of a world trade recession. We have to consider how we can best handle this situation and overcome it in the interests of our own people as well as of others.

Mr. Canavan

Will my right hon. Friend bear in mind that the imposition of selective import controls is the policy of the Labour Party and of the TUC? Will he also bear in mind that, particularly in the textile industry, cheap imports not only threaten the jobs of our own workers, including textile workers in my constituency and in other parts of Scotland and the North of England in particular, but are often the direct result of multinational companies exploiting cheap labour in other countries?

Mr. Shore

The problem of cheap imports is important, but we have to remember that cheap imports are not by any means the same as dumped imports. We have long understood in the Labour movement in this country that countries that have formerly lagged well behind us in terms of industrial development will inevitably turn to certain ranges of industries where their skills and natural advantages can be used, and will develop them first.

In the case of textiles there is the new multi-fibre arrangement, which has only recently been concluded, and which broadly will be of benefit to Britain, because it not only limits the increases available to other countries, particularly developing countries which have this advantage, but limits them in an orderly way, and, in terms of the EEC, has within it a burden-sharing formula un doubtedly beneficial to Britain.

Mr. Morrison

Will the right hon. Gentleman accept that in the event of the Government imposing import controls some retaliatory measures are bound to be taken, which will lead to greater unemployment?

Mr. Shore

There is here a question of the possible international repercussions of particular measures that may be taken by the British Government. Obviously, that is something that any responsible Government must consider and weigh before deciding on any particular action about imports. If I may express my view in these words, I shall at least, I hope, command considerable support on both sides of the House. I would not expect any of my hon. Friends, or any hon. Members opposite, to urge upon me a course of action that, after serious examination and with the best possible information available, would lead to results the very opposite of the results they want. That will not necessarily always be the case, but it is a serious factor that we must weigh in the interests of our own people.

Mr. Hoyle

Will not my right hon. Friend accept that it is not sympathy but action that the workers are demanding? Does he not also accept that the threat of reprisals has been overstated too often? Will he not take action before it is too late with imports of textiles, footwear and glass? Will he bear in mind that only last week we have seen Chrysler threatening to withdraw from this country, while a British designed car is to be produced in France and imported here, with the loss of British jobs? We are demanding action.

Mr. Shore

The question of Chrysler is now being considered, as my hon. Friend knows, and important consultations are being held in a few days' time. Therefore, I should not like to comment separately on that case at the moment. However, it may be that some have overstated the dangers of retaliation, but I equally put to some of my hon. Friends that there is a danger in understating that probability.

Mr. Higgins

Will not the right hon. Gentleman accept that there is a great deal of dangerous double talk about import controls? The true distinction is the one he makes—whether goods are dumped. The term "selective import controls" totally fudges that vital distinction. Will the right hon. Gentleman reject the protectionist appeals of Ron Hayward and others, which would be likely to create retaliation and which could create not a world depression but a world slump, with beggar-my-neighbour policies and a reversion to the situation of the 1930s and higher, not lower, unemployment?

Mr. Shore

I accept one point that the hon. Gentleman made—that the phrase "selective controls" in a rather blanket way covers different situations—one in which one is faced with genuine dumping and the situation I sometimes describe as over-competitiveness. There is a distinction.

What the hon. Member has to realise—and I hope that others outside the House realise this—is that the commitment of the major industrial countries to an increasingly free international trading order is a commitment that, on the whole, has been of benefit to this country, and it can be sustained in future only if we are able to resume the growth of international trade. If international trade fails to grow, we shall all be turned, whether we like it or not and however much we try, into enemies rather than rivals in international trade. That is a situation that I desperately want to avoid. Those who understand the history of the 1920s and 1930s will know very well why.

Mr. Atkinson

Will my right hon. Friend accept that the argument about import controls is about world growth and the recovery of our economy? Does he agree that import controls are not temporary expedients to effect protection? They are essentially instruments of planning. If the whole of the Socialist case is about planning the economy, how can we plan it in the absence of controls on our external trade? The introduction of import controls would mean that we could expand the economy, raise production and lift world trade. It is not the other way about.

Mr. Shore

My hon. Friend has an argument, but it is not the argument about selective import controls. It is the argument about controls more generally as a means of protecting the balance of payments, or whatever it may be.

Mr. Atkinson

That is right.

Mr. Shore

That is a matter which does not immediately concern us. We have been talking about selective controls. I wish to add only this point to what I have said on that subject. We must do our best—I have said this before—to do what we can to sustain world trade, but we cannot stand idly by in a situation that would result in the destruction of a major British industrial capacity that we shall need in the future. That is my viewpoint.

Mr. Biffen

In view of the substantial and dangerous dependence of the Government's finances on overseas borrowing, would it not be realistic for the hon. Gentleman to point out to his hon. Friends below the Gangway that the International Monetary Fund would take a very poor view of any Government who, in seeking further credit, had a record of trade discrimination at a time when all its policies are designed to expand world trade rather than restrict it?

Mr. Shore

The important international obligation in this case is not the obligation that the hon. Gentleman has cited. It is Article 19 of the GATT. Article 19 of the GATT gives a nation the right to impose restrictions if increased imports are causing or threatening serious injury to domestic industry. That is the right under Article 19 of the GATT. What my hon. Friends have also to recognise is that the same article also gives the rest of the international community the right to have compensation in respect of the exports of the country taking that action. That is why, amongst other things, one has to think very carefully about particular cases.

14. Mr. Madden

asked the Secretary of State for Trade how many representations have been made to his Department, by individuals and organisations, since March 1974, urging import controls on textiles.

The Under-Secretary of State for Trade (Mr. Eric Deakins)

About 260. We already have restrictions on a wide range of textile items. As my right hon. Friend the Prime Minister said on 23 May, the Government do not consider that an across-the-board cut in textile imports would be justified. But I am ready to consider the case for further restrictions on individual items on their merits in the light of our international obligations.

Mr. Madden

Will my hon. Friend take it that the number of representations from all sides of the textile industry shows that the majority of the industry recognises that the only way to safeguard the British textile industry and relieve the misery in which it now finds itself is to impose selective import controls? Further, will he agree that import controls would not create retaliation, nor export unemployment? If the Department tells me that import controls are imposed on textiles by Australia, Canada, Norway, South Korea and Taiwan, why is it right for them to exercise such controls and not right for this country?

Mr. Deakins

First, I should remind my hon. Friend that there are already a considerable number of restrictions on textile exports from other countries to Britain. Under the terms of the multi-fibre arrangement, we have agreements in operation with Hong Kong, India, Malaysia, Macao and Singapore, and one will shortly come into effect in respect of Pakistan. Further agreements are to be negotiated by the end of this year with Mexico, Latin America and the East European countries. Thus, virtually the whole of the developing world will be covered by these agreements in the next six months. Moreover, we do not wish to take selective action on textiles that is not justified under the terms of the multi-fibre arrangement, which represents for the first time ever an international agreement between the developed and the developing countries to control international trade in this important commodity—important for us and important for many developing countries. Finally, we do not, at least on this side of the House, wish to export unemployment—certainly not to very poor countries. We must take all the steps we can to protect employment in this country without harming the interests of people who are at present unemployed or in work in other and poorer countries.

Mr. Fletcher-Cooke

May I revert to the question of dumping strictly so-called, not selective import controls? Do I understand from the answers to previous Questions that it is the Government's view that our anti-dumping machinery is the strongest we are entitled to adopt under the GATT? If that is so, why is it that Canada adopts much stronger anti-dumping machinery and yet is apparently able to keep within the GATT?

Mr. Deakins

I am satisfied that the measures we have taken under the GATT anti-dumping code—rather than our own legislation of 1969—represent or contain the strongest possible measures we can use to restrain dumped imports from other countries. If the hon. and learned Gentleman is saying that the GATT rules could be tightened up or be made more stringent, that is an entirely different matter. I am not aware that Canada has any approach to anti-dumping basically different from that adopted by Britain. There is a difference in respect of the United States, but it arises because of something known as the "grandfather" clause, since United States domestic legislation existed on this issue before the GATT anti-dumping code was drawn up.

Mr. James Lamond

Will my hon. Friend bear in mind that some of those who are calling for import restrictions are employed by our own companies, which invest in mills abroad which provide the cheap imports coming to this country, and that the British Government have themselves financed a number of projects in developing countries, which will add to the difficulties of our textile industry? Will my hon. Friend, therefore, have urgent talks with his colleagues to see whether any strategy can be developed by the Government at least to provide alternative employment for the many textile workers who are being thrown out of work because of the present policy?

Mr. Deakins

My hon. Friend's last point is certainly important. Obviously, as my right hon. Friend has already said, no Government can stand by and see whole sectors of British industry decimated by competition from cheaper imports from overseas. But imposing selective import controls is not necessarily the only or the best means of safeguarding employment in our industries. If my hon. Friend will watch in the next few weeks for announcements about the Government's developing industrial strategy, he will, I think, find that measures will be taken that will in the longer term look after the interests of these domestic industries.

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