Multi-Fibre Arrangement

HC Deb 12 March 1979 vol 964 cc3-5

3. Mr. Arnold

asked the Secretary of State for Trade what representations he has received about the workings of the multi-fibre arrangement.

Mr. John Smith

I keep closely in touch with both sides of the textiles and clothing industry about the workings of the multi-fibre arrangement and related issues.

Mr. Arnold

Is the Secretary of State aware that the success of the MFA will have to be judged against the outcome of the Tokyo round? Does he really believe that the present proposals of the Commission, which will result in textile tariffs in the Unted States being at least 35 per cent. higher than those in the EEC, can possibly be justified?

Mr. Smith

The multi-fibre arrangement is working well and will maintain itself in operation until 1982. I hope that it will be continued beyond that, because I think that it is necessary for the industry. I have only recently received the latest interim reports from the Commission on the multilateral trade negotiations. Since there are over 2,000 items in the United States tariff scale alone, I am having it carefully evaluated. I do not wish to express an opinion on the worth to the Community, as opposed to the United States, of these offers until I have had a fuller opportunity to analyse them properly.

Mr. Madden

Has the Secretary of State any further news about action being take to control textile exports from Mediterranean associates such as Portugal, Turkey and Malta especially in the context of outward processing? Can he say whether, when the time comes to negotiate the agreement, efforts will be made to include China?

Mr. Smith

In answer to the first part of my hon. Friend's question, agreements were reached with the Mediterranean countries for different periods of time but on a basis which I think was satisfactory, particularly since much better safeguard mechanisms have been introduced into them. Discussions between the EEC and China have begun. Obviously in these negotiations the British Government will not only have regard to our commercial interests, but will wish to ensure that the outcome is consistent with the multi-fibre arrangement.

Mr. Fletcher-Cooke

Does the Secretary of State accept, either wholly or in part, the complaint made by Hong Kong that although its quota has been reduced for imports into this country, ostensibly in the interests of the home producers, the shortfall has been made up, not by the home producers, but by importers from other countries?

Mr. Smith

It is always difficult to pin down these matters completely. Our judgment is that part of the gap created by the reduction of imports from Hong Kong has been made up by the home producers. The quotas bit quite heavily on Hong Kong, as they did on some other countries. I am afraid that that was an unfortunate necessity in the achievement of the multi-fibre arrangement.

Mr. James Lamond

Has my right hon. Friend had any representations from the British Textile Confederation about the Tokyo round? Is he aware that the BTC regards the current offer by the United States as being unfavourable to the textile industry? Will my right hon. Friend bear that in mind when he is considering this matter?

Mr. Smith

I have received recent representations from the British Textile Confederation. I value the opportunity of corresponding with that organisation and discussing these matters with its members. The American offer is under discussion in the Commission. Recent discussions have taken place and I am in the process of evaluating them in the context of textiles policy and of the MFA negotiations.

Mr. Michael Latham

Has the Department of Trade seen the annual report from the Leicester and District Hosiery Manufacturers Association which I sent to the Under-Secretary and which is critical of the operation of the multi-fibre arrangement? What steps are the Department taking to improve monitoring the effectiveness of that arrangement?

Mr. Smith

I have not seen the report, although I understand that it has been sent to my hon. Friend the Under-Secretary. My impression—and indeed it is more than an impression, it is a justified conclusion—is that the monitoring of the multi-fibre arrangement is working reasonably satisfactorily. But if detailed points are brought to my attention which I feel are justified I shall not hesitate to raise them with the Commission.

Mr. Nott

What is the legal position of the quotas? Is the Secretary of State aware that many textile companies in the country foresaw that when the multi-fibre-arrangement was renegotiated the total quotas would be more or less fixed until the end of the period but now, with enlargement and the Chinese question, they see the quotas as being movable? Is there no fixed limit on the quota? There is some uncertainty about this problem.

Mr. Smith

My understanding is that there are fixed quotas under the bilateral arrangement. Of course, the Mediterranean associates are in a different position because they are regarded as preferential countries in relation to the Community. If any other countries were to be brought within the scope of the multi-fibre arrangement, that would raise the question of whether there should be an increase in the global amounts.