Multi-Fibre Arrangement (Hansard, 29 January 1979)

§ 6. Mr. Cryer
asked the Secretary of State for Trade if he is satisfied with the operation of the multi-fibre arrangement.

§ 13. Mr. Madden
asked the Secretary of State for Trade what recent agreement has been reached to safeguard the United Kingdom from the import of the most sensitive textile products.

§ 21. Mr. Arnold
asked the Secretary of State for Trade whether he remains satisfied with the working of the multi-fibre arrangement.

§ Mr. John Smith
I am reasonably satisfied with the operation of the bilateral agreements negotiated under the multi-fibre arrangement. The EEC Commission has also been negotiating voluntary restraint arrangements for 1979 with a number of Mediterranean suppliers, and agreements with Greece, Spain and Portugal have now been concluded. The agreement with Portugal, which is by far the most important supplier to the United Kingdom, covers a period of three years.

§ Mr. Cryer
Will the Secretary of State accept that there is a good deal of concern being expressed by the wool textile delegation about the lack of automatic application of the quota arrangements under which, by change of mind by the EEC, representations must be made in a similar way to those made on dumping? Will he accept that this is a matter of considerable concern? Should the import position for textiles worsen, what action will he take?

§ Mr. Smith
I had very full discussions with both sides of the textile industry before the last meeting of the Council of Ministers, as a result of which I put forward proposals to the Council for a warning bell mechanism. This would mean that when 75 per cent. of the restraint level was reached, consultations with the exporting country would be set in hand by the Commission. I am glad to say that that has been approved and is now part of the machinery. It is a substantial and important advance for the operation of these arrangements.

§ Mr. Madden
Will the Secretary of State confirm that the warning bell or safeguard measure to which he has referred has been introduced to ensure that import levels are observed? Also, will he confirm that absolute minimum growth is the underlying approach of his Department in all matters concerning textile imports? Lastly, will he give a clear assurance that in any trade discussions he has with the Chinese the interests of the British textile industry will not be sacrificed for the exporting interests of British capital goods industries?

§ Mr. Smith
We are very sensitive to the adverse effects there might be on the textile industry if agreements which did not take its interests into account were reached. I must constantly balance the 1007 interests of exporting and importing concerns, both of which provide employment in this country. Certainly I shall bear my hon. Friend's concerns in mind.
On my hon. Friend's other question, the purpose of the warning bell is to enable action against imports to be taken in good time rather than after an individual restraint level has been reached. That was the unfortunate experience during 1978, and the reason why we were so anxious to put the safeguard into the agreement was to stop similar happenings in 1979. We have also obtained from the Commission an agreement to engage safeguard procedures immediately if any of the restraint levels are not respected, or if consultations do not give a satisfactory result. All in all we have made a most important step forward.

§ Mr. Arnold
Is it not quite clear that on balance the Commission is doing a good job in terms of the responsibility that it has been given? Are we to understand from the Secretary of State's original answer that it is now his intention to try to bring most if not all of the remaining financial agreements within the framework of the MFA? Has he given instructions to that effect to our negotiators in Brussels?

§ Mr. Smith
We have had discussions with the Commission during 1978 about the way in which action should be taken when levels are breached. As a result of these discussions, we have reached a very satisfactory arrangement for the future. I must leave matters at that stage.

§ Mr. Nott
Will the Secretary of State say a little more about the relationship of the GATT arrangements—the Tokyo round—with the multi-fibre arrangement? Is it not the case that the wool textile industry is very concerned about exports from this country to the United States? What progress is being made there?
Secondly, will the new safeguard clause in the Tokyo round negotiations be available to help excessive and sudden surges of imports of textiles as well as of other goods, and how far is that proceeding? Obviously the two negotiations are closely related.

§ Mr. Smith
The hon. Member is quite correct to remind us of the importance of 1008 wool textiles in the context of the Tokyo round, because this principally concerns barriers towards exports from this country and others entering the United States. We are one of the countries pressing the Community to take this line with the United States. There are some domestic political problems from the Congress affecting the attitude of the Administration, but the level of withdrawals that the Community might make would depend largely on the United States' attitude. We have certainly taken that point seriously into account, because if there were a change in the position of the United States we could anticipate a considerable increase of exports of textiles from this country to that market.
On the question of imports of textiles in the context of the Tokyo round, we are discussing the context of a safeguard clause which would be applied on a non-MFA basis. There is substantial agreement on this within the Community and progress is being made by the other parties. In addition, there will have to be discussions with the developing countries.

§ Mr. Speaker
I must ask for shorter answers, as well as shorter questions.