HC Deb 23 January 1980 vol 977 cc581-610 10.12 pm
The Minister for Trade (Mr. Cecil Parkinson)

I beg to move, That the draft European Communities (Definition of Treaties) (Multilateral Trade Negotiations) Order 1980, which was laid before this House on 15 January, be approved. This order, laid under section 1(3) of the European Communities Act 1972, constitutes an important step in the implementation of the agreement reached in the Tokyo round of the multilateral trade negotiations. The negotiations started in 1973. There can seldom have been less promising circumstances for the world's trading nations to be discussing the reduction of barriers to trade and the reduction of tariffs than during the last six difficult years.

It is a matter of pleasure that the negotiations were brought to a successful conclusion when participants from the main developed nations signed an understanding in April 1979. Subsequently, in July, the detailed results of the tariff negotiations were set out in a tariff protocol. Taken together, the Tokyo round agreements constitute the first general revision of the principles governing the conduct of international trade since the General Agreement on Tariffs and Trade came into force 30 years ago.

The House debated the Tokyo round package on 29 June 1979, and I explained then the Government's support for the agreements which have been negotiated. The period since 1973, following the Middle East war and oil price rises, has not been a good time for this type of negotiation. But both the present Government and their predecessor have, nevertheless, sought a positive and successful outcome to the Tokyo round.

A country as dependent on exports as is the United Kingdom would have been very ill placed indeed to cope with a general increase in protectionism which. I believe, could well have been the outcome of a failure in the Tokyo round negotiations. The positive outcome which has been achieved should, on the other hand, provide increased opportunities for export sales of which competitive United Kingdom firms will be able to take advantage.

When the negotiations were concluded last summer, the focus turned from negotiating to the implementation of the results of those negotiations. I think it would be true to say that the United States implementing legislation, to fairly widespread surprise, was passed quickly into law in July 1979. On 20 November last year, the EEC Foreign Affairs Council accepted a proposal by the Commission—which had been examined by the Scrutiny Committee of this House in the usual way—that it should agree to conclude the agreements on behalf of the Community. The Government supported this decision; indeed, we would have preferred the decision to be taken earlier. Following the Council's decision in November, the Community was able to join with the other main industrialised participants in signing the negotiated agreements.

Signature took place in Geneva on 17 December, that is, shortly before most of the agreements came into force on 1 January 1980. Countries which, like ourselves, had not completed their parliamentary procedures signed the agreements subject to their subsequent approval through their various constitutional processes.

Mr. Nigel Spearing(Newham, South)

Precisely who was involved in the negotiations on behalf of the EEC? Was it officials of the Commission, or did the Commission recruit a team of persons from the Governments of the member States?

Mr. Parkinson

As the hon. Gentleman knows, the Commission negotiates on behalf of the member States, but I think it would be true to say that at every single stage of the negotiation the Commission was being watched and guided by representatives of the member States. The United Kingdom Government were very well represented at every stage of those negotiations and at both official and at ministerial level the direction of the Community's negotiations was settled by the member States.

The bulk of the implementing action is being undertaken through Community legislation—for example, new regulations on countervailing and anti-dumping, new customs valuation regulations, the new Community tariff for 1980, and so on. The drafts of all these, and the Government explanations of them, are being brought before the Scrutiny Committee in the usual way, and the necessary action has been completed on the agreements which came into force at the beginning of this year. The House has therefore had several opportunities to consider these documents.

In the White Paper we put forward the Government's view on the agreements. In the debate tonight, the House will have a chance to comment. But every agreement listed in the order will be translated into Community legislation. The draft directive will be brought before the Scrutiny Committee. The Government have been very anxious to make sure that the House has had a chance to consider these measures. The House, rather unusually, will have had no fewer than three separate opportunities to do so.

Mr. Julius Silverman(Birmingham, Erdington)

Is is correct to say that these treaties will be brought before the Scrutiny Committee? The position of the Scrutiny Committee at present in relation to the definition of treaties is indeterminate. As the House knows, there was a resolution of the Procedure Committee which has not yet been carried out.

Mr. Parkinson

May I say to the hon. Member, who has taken on one of the most important jobs in the House in chairing the Scrutiny Committee, that tonight we will approve the agreements in this order as they were signed on behalf of the Community and its member countries. However, each of those agreements in detail will have to be translated, by directives, into Community law. Each of them, in turn, will come before the Scrutiny Committee—a number have already done so—so that that Committee may examine them and decide whether it is happy to see them adopted by this House.

Within the United Kingdom, an order under section 1(3) of the European Communities Act 1972 is necessary so that multilateral trade negotiations agreements should have full effect in United Kingdom law. Last year there was only a short time in which to do this between the approval of the negotiated agreements by the Foreign Affairs Council at the end of the year.

This House approved a draft order similar to the present one on 10 December, but the Joint Committee on Statutory Instruments was unable, for very good reasons, to complete its consideration of the order in time for it to be approved by the House of Lords and made in 1979. So the Government withdrew the draft 1979 order and have instead brought forward the present draft I am glad to say that the 1980 draft order was cleared by the Joint Committee on Statutory Instruments at its meeting yesterday.

No practical difficulties will result from the short delay necessary for Parliament to give proper scrutiny to this order. However, it is important that the present draft order be made reasonably soon so that the United Kingdom's reserve on its signature can be removed.

Three agreements in the MTN package are not proposed for specification in the order. The supplementary tariff protocol and the two agreements relating specifically to the agricultural sector do not need to be specified in the order either because they have been signed by the Community alone, and not by the United Kingdom, or because they are not of such a nature as to have a direct effect.

All the other agreements negotiated in the Tokyo round have been specified for the reasons set out in the explanatory memorandum. In general, these reasons are that the agreements concerned have been signed both by the Community and by the United Kingdom and they contain provisions which we judge might be held to have a direct effect. The nine agreements are covered in one order since they are closely related in their subject matter and have been negotiated as one package.

The various agreements specified in the order have been described in detail in the White Paper on the Tokyo round, Cmnd. 7724, which was published in October and their texts have been published as Command Papers. Tonight I can touch only briefly on each agreement and shall concentrate on their effects in the United Kingdom.

The tariff negotiations, whilst not necessarily the most important part of the package, were amongst the most difficult to conclude. No firm, for understandable reasons, likes to see the tariff protecting its home market being reduced. Each party to the negotiations naturally tailored its cuts to the circumstances of its own industry so that the cuts are balanced overall, though not necessarily product by product.

Nevertheless, I believe that the Community's tariff cuts are being implemented in an acceptable way for United Kingdom industry. That was an important part of the objectives of the United Kingdom in settling the negotiating mandate for the Community. The EEC's common external tariff on manufactured goods is being reduced in annual stages between 1980 and 1987 from an average level of 9.8 per cent. to an average level of 7.5 per cent. That represents an average reduction of about 0.3 per cent. a year.

Mr. Nigel Forman (Carshalton)

Has the Department studied the comparative effects on the protection available to firms of tariff barriers, non-tariff barriers and currency movements? If it has made such a study, what is the result?

Mr. Parkinson

If my hon. Friend introduces an Adjournment debate on that interesting range of subjects, which demands much homework and time, I shall be happy to take part. Of course, we constantly examine the basis of our trade performance and the effect on our performance of tariffs, other countries' tariffs, non-tariff barriers and technical tariffs. Those are debated regularly in the Department. As usual, my hon. Friend the Member for Carshalton (Mr. Forman) has mentioned an important issue. I hope that he will write to me. I shall welcome the opportunity of debating the issue with him.

Additional assurances have been provided to the textile and paper sectors which were particularly anxious about the prospects of increased competition from imports. The Community has reserved its right to stop the tariff-cutting process after five years if the economic circumstances require it. The reciprocal tariff cuts of other participants in the negotiations will yield worthwhile export opportunities for a range of industries. That will apply particularly to our producers of chemicals, ceramics, wool textiles and various types of engineering products. The distinctive feature of the Tokyo round was its emphasis on tackling the non-tariff obstacles to trade which have caused much anxiety to our exporters and have been reflected often in our discussions in the House.

Mr. Bob Cryer (Keighley)

I thought that the Minister said that the Community reserves its right to withdraw from the textile tariff concessions after five years. The White Paper, Cmnd. 7724, states that the Community has reserved its right to withdraw its textile tariff concessions when the present multi-fibre arrangement expires at the end of 1981. Has the position changed since the publication of the White Paper?

Mr. Parkinson

I shall be straightforward with the hon. Member. After five years we have the right to review the tariff-cutting process. If I am wrong, I shall deal with the question later.

The distinctive feature of the present round—and the achievement of it—is not the tariff cuts but the attempt to re-create a new set of rules for world trade and to tackle some of the non-tariff problems which have become a more obvious barrier to trade in some areas than tariffs. A number of agreements are aimed at dealing with those problems.

The customs valuation agreement and its protocol lay down detailed rules on the valuation of imports for duty purposes. Valuation is normally to be based on the price paid, or payable, for goods. Certain alternative methods are specified in order of precedence, for use in circumstances where this criterion cannot be applied. The agreement will require some changes in our Customs valuation methods, which will result in small decreases in duty paid in some cases, though in most—the overwhelming majority—the duty paid will be the same as at present. Our exporters will, however, gain a greater predictability and fairness in the valuation applied to their products, and hence in the duty paid, in some foreign markets.

The agreement on subsidies and countervailing duties elaborates the existing GATT rules on the imposition of countervailing duties against subsidised imports. As a result of the agreement, the Community has made some changes in its regulations on the imposition of such duties, designed to make them more precise. These changes will not impede the Community's ability to take action in defence of its industry. Signatories are also committed to certain general principles about seeking to avoid subsidies that cause adverse effects for the trades of other countries with them.

Mrs. Elaine Kellett-Bowman (Lancaster)

Will the new rule that my hon. Friend is speaking about make it easier to take rapid action on such matters as dual pricing in America so that we do not have that tremendous drag on our trade?

Mr. Parkinson

What the agreements should do is to establish a set of rules and a way of enforcing them, or monitoring them, which I believe should benefit the United Kingdom. I believe—and it is a widely held belief in this country—that there are non-tariff barriers erected by other people to an extent that we do not erect them. Therefore, a fairer set of rules, cleaning up the rules of world trade, making sure that non-tariff barriers are in effect outlawed, and that there is a system for monitoring the agreements that countries will have signed of their own accord, must benefit us.

Mr. Douglas Jay (Battersea, North)

Does the fair set of rules that the Minister mentioned for controlling export subsidies apply to export subsidies on food exported by the EEC?

Mr. Parkinson

I can see myself ending the debate with a set of the parliamentary equivalent of IOUs. I should love to debate that subject again with the right hon. Gentleman.

I believe that the Community has been a force for liberalisation in the Tokyo round negotiations, but that it is an Achilles heel of the Community that we maintain the common agricultural policy in its present form, because it rather smudges our credentials as a force for liberalisation in world trade.

I should like to conclude what I was saying about the agreement on subsidies and countervailing duties. Under the agreements, we have gained the acceptance of all participants—including for the first time and most importantly the United States Government—of the GATT material injury criterion under which countervailing duties can be imposed only if the subsidised imports can be shown to be causing material injury to a domestic industry as a result of the subsidy. That is a major gain from the negotiations.

The existing GATT anti-dumping code, which dates from 1968, has been updated to bring its provisions into line with those of the subsidies and countervailing duties agreement. The Community will continue to be able to take the necessary action to protect British industry against dumped goods.

The agreement on import licensing procedures is designed to ensure that the ways in which import licensing schemes are administered do not cause unnecessary difficulties for traders. It requires no change in our practice, but it might require changes in some other countries' practices.

The agreement on technical barriers to trade is concerned to alleviate the difficulties that exporters can face from product standards and certification systems in force in the importing country. Under the agreement, an authority establishing a new or revised standard is encouraged to adopt an international standard where that is appropriate and to follow certain notification procedures before laying down a national standard when no suitable international standard exists.

The agreement also provides for improved information for exporters on existing standards, and improved access to certification schemes. The British Standards Institution and other bodies concerned with standards in the United Kingdom are encouraged to follow these practices, while our exporters should benefit from similar practices in other countries participating in the agreement.

An agreement has also been reached on the liberalisation of Government purchasing other than the defence purchasing of warlike stores. The agreement does not apply to nationalised industries. After the agreement comes into force in 1981, the procedures under which tenders are invited must be made public. Most contracts over £100,000 must be advertised in advance in specified journals. These and other provisions are designed to ensure that the purchasing authorities within the agreement's scope do not discriminate in their award of contracts.

Many of the procedures to be established by the agreement are similar to those contained in the EEC supplies directive 77/62, which came into force in July 1978. As a result, it is expected that the existing departmental arrangements under the supplies directive will largely be able to continue on much the same basis as before.

Mr. Cryer

Is it not a fact that the United Kingdom was following the rules laid down in the directive and advertising public contracts throughout the EEC, and that in stark contrast the other EEC members were making only nominal gestures? Does the Minister agree that there were about 250 United Kingdom advertisements as opposed to 20 or 30 from the other member States?

Mr. Parkinson

The hon. Gentleman is right. In the initial stages the United Kingdom adopted the directive and implemented it earlier than other member States. I am pleased to say that there has been a change. There is a growing proportion of advertisements from other countries and a diminishing proportion of advertisements from Britain. The figures for the last month that I checked revealed that France had an overwhelming number of advertisements. I accept what the hon. Gentleman said. The directive was slow to get off the ground in other countries. Britain's implementation was quicker. It now seems to be operating more fairly. A growing proportion of the advertisements is from countries other than the United Kingdom.

Mr. Ron Leighton (Newham, North-East)

What contracts have we obtained as a result of the directive?

Mr. Parkinson

The hon. Gentleman might ask himself another question. How many contracts have other member States obtained as a result of it? I suspect that the answer in both instances is not dissimilar.

Mr. Leighton

I understand that the Metropolitan Police are being uniformed by German manufacturers.

Mr. Parkinson

I had lunch yesterday with a United Kingdom supplier who is providing uniforms for staff of the Paris Metro. We might both ask ourselves, so what?

Finally, the section 1(3) order that is before the House specifies the agreement on trade in civil aircraft. The agreement provides for duty-free trade between signatory countries in aircraft, aero engines and some aerospace equipment. It also lays down certain general principles relating to Government support for pro- jects, purchasing of aircraft by airlines, and other matters. The elimination of tariffs has not affected the Community's tariff on large aircraft, which is already suspended at zero, while the general principles are designed to help establish a modus vivendi with the United States, which is of major importance as a producer and increasingly, in a welcome fashion, as a purchaser of civil aircraft.

I hope that hon. Members will be able to see from that brief explanation, and from the extremely detailed documents that have been provided for the debate, that none of the obligations that the United Kingdom is assuming under the Tokyo round agreements is unduly onerous. The main agreements provide for a committee of signatories to oversee the operation of the agreement concerned and ensure that its provisions are complied with. I believe that we and the Community have sufficient influence to use that machinery effectively to make sure that the agreements are implemented in a balanced way between ourselves and the other participants.

Before concluding, I should say a brief word about one matter that is still outstanding in the negotiations and which the right hon. Member for Lanark shire, North (Mr. Smith) and I discussed in the debate in June. I then reported that the Government were committed to a successful outcome to the negotiations for a safeguards agreement. Unfortunately it was not possible to reach agreement within the time scale of the remainder of the negotiations. Negotiations on a code are, however, to continue within the GATT. The working party that will undertake these discussions is required to report back by the end of June 1980. I regret the delay, but I welcome the general willingness among participating countries to seek an agreed solution of the difficult issues involved.

In the meantime, our ability to protect the interests of United Kingdom industries remains as it was. While negotiations continue, article 19 action remains fully available to the Community, and the Government, while rejecting policies of general import controls, are, as in the past, prepared to consider the possibility of import restrictions where excessive imports are, in particular cases, threatening otherwise viable industries. As for selectivity, the EEC Commission has indicated a willingness to consider requests for future safeguard action on the same basis as they have done in the past. That history includes the fact that article 19 has been used selectively by the EEC.

Apart from the outstanding issue on safeguards, the main aspects of the Tokyo round negotiations have been brought to a successful conclusion, and, I would suggest, a conclusion broader in scope than at one time seemed possible. I believe that the Tokyo round has been a most ambitious venture by the world's trading nations. At a time of great difficulty, they have turned their backs on protectionism and decided that the way to improve the standard of living of the people of the world is to expand world trade and liberalise the system.

In the agreements listed in the order we have set out to deal with problems such as technical barriers to trade, which are of themselves extremely difficulty to pin down. However, I feel that a worthwhile attempt has been made. We must now begin the big job—that of implementing these agreements. We must make sure that the ambitions and objectives that the world's trading nations have defined for themselves are carried through in practice. These new rules, as defined, must be implemented and made to work. I believe that we shall all be the better for it, if we are successful in that large and difficult venture.

10.45 pm
Mr. John Smith (Lanarkshire, North)

The House is grateful to the Minister for his explanation of the conclusions of the Tokyo round. We discussed the matter fully in June last year, and there is only one point in the hon. Gentleman's analysis on which I take slight issue.

I am flattered by the idealism that the Minister injects into the conclusions negotiated by the Labour Government. Those, like myself, who participated heavily in the negotiations would be wary of injecting too much idealism into them. The Tokyo round was a success because adjustments were made between a number of the negotiating parties. It was not always done in the idealistic spirit of liberalising world trade and the negotiations were certainly not always conducted idealistically.

I do not want to traverse the ground covered in June. It is important that the Tokyo round negotiations did not fail. A failure to agree the proposals set out as a result of the round would have set world trade back considerably, but we did not achieve a tremendous amount and some of the difficult issues, such as safeguards, have been put to one side.

I was pleased to note that the Government are adhering to the selectivity that the Labour Government argued was inherent in article 19. That view is not shared by all the rest of the world—the developing countries would certainly dispute it—but I hope that the Government will adhere to that view.

I wish to refer to the problem of textiles and dual pricing. I wrote to the Secretary of State some weeks ago and have not yet had a reply.

Mr. Parkinson

The right hon. Gentleman knows that my right hon. Friend is abroad, but I signed his reply today.

Mr. Smith

I just hope that it is a good reply.

Mr. Parkinson

It is better than the letter.

Mr. Smith

I hope that it is better than the draft that was probably put before the Secretary of State. It is not a joking matter, because it is of major importance to our man-made fibre industry.

The facts are simple. The United States gets an enormous price advantage out of the fact that its man-made fibre producers get their energy feedstocks at much lower than the world price. That deliberate policy of the United States gives a great advantage to its manufacturers.

During the multilateral trade negotiations the previous Labour Government were alive to the problem and the Council of Ministers decided on 3 April last year that, in the event of the dual pricing system giving rise to disruptive effects on Community trade, the EEC would not hesitate to take appropriate action by way of quotas or countervailing duties. Since then there has been a signal lack of action by the Community. The Government drew the matter to the attention of the Council of Ministers too late and the matter has been postponed, month after month, to the February meeting of the Council of Foreign Ministers.

Not only can the Council of Ministers take action, but the British Government can act to deal with the problem, and I suggested in my letter to the Secretary of State that they should not hesitate to take action. It would strengthen their negotiating hand within the Community and would make clear to our EEC partners and to the United States that we mean business.

There are a number of rumours from the Community that the United States is deliberately stalling. Every month in which the Community does not take action is another month in which the British market is penetrated by the unfair trading advantage of the United States'man-made fibre producers. It is time that effective action was taken. It has nothing to do with free trading, but a lot to do with fair trading.

I hope that the Government will not hesitate to take action. I understand that they are waiting for the February meeting of the Council of Foreign Ministers. I hope that the result is not some feeble application of countervailing duty of a few percentage points to make it look as if the Community is taking some token action. Nothing less than effective action will do to protect the man-made fibre industry in this country. We link this matter to the tariff-cutting process. As my hon. Friend the Member for Keighley (Mr. Cryer) rightly pointed out, the tariff-cutting process has a break at the end of five years. The whole process can be linked to progress on other matters. I hope that the Government will take much firmer action. This can be taken collectively. But if there is no action collectively, the capacity exists within the rules of the European Community for a sovereign Government to take action, at least on an interim basis, on their own account. I hope that the Government will take action and that the Minister will say that he expects real progress at the meetings on 4 and 5 February.

We have asked previously how these negotiations were proceeding. The report that the House received was in the form of an omnibus report from one of the Foreign Office Ministers. That was not satisfactory. I put the Minister on notice that, after the 4–5 February meeting of the Council of Ministers we shall expect the Secretary of State for Trade or himself to give a full report to the House on what has happened in the negotiations. These are of fundamental importance to the man-made fibre industry in this country. I hope that the hon. Gentleman will be able to announce some success in the negotiations. If not, he can expect round criticism not only from the Opposition but from some of his hon. Friends.

10.51 pm
Mr. Donald Thompson (Sowerby)

This is an ideal document. In an ideal world it would be just what many manufacturers are looking for. It is a first-class package. I am sure that it will be welcomed by all. The background supplied to the Joint Committee on Statutory Instruments in paragraph 3 says that the idea is to provide a more secure framework of rules and procedures to encourage the continued expansion of world trade. My constituents and I agree, but we realise that an expansion of world trade does not necessarily mean an expansion of trade in the United Kingdom, especially in textiles. I am glad that the Minister had so much to say about textiles, especially wool textiles. I hope that he is certain that our share of world trade will expand. I think that it will if all EEC members and the other signatories stick to the agreement.

Paragraph 9 of the same briefing document, in a sentence which I do not fully understand, says: It is considered that each agreement contains provisions which may be directly applicable within the United Kingdom, although such questions can only ultimately be decided by the European Court. Are we to infer from that sentence that EEC countries, anxious not to abide by parts of the agreement when it suits them, can kick back the whole matter to the European Court and waste time? Will we be in a French lamb situation? The old GATT rules had no authority to impose sanctions. Nor were there any sanctions to impose. Has that changed?

I have read the documents carefully. I should like to refer to those on countervailing duties and anti-dumping. I understand that under the last GATT regulations on dumping and subsidisation it had to be proved that dumping was taking place, that the action was causing material injury to Community industry, not simply to our industry, and that the imposition of duties would be in the Community interest and not just ours. Do the new rules change that situation? Are we the signatories? Or is the EEC? A footnote says that "signatories" means parties to this agreement. Is that the United Kingdom? Or is it the EEC? If it is the United Kingdom, so much the better.

The first few articles in each agreement, while setting out procedures, highlight the built-in delays. For instance, article 2.14 of agreement 7658 says that one year may be taken to reach an agreement. Although article 2.10 mentions provisional measures, no time scale is laid down in that article, or in the article contained in the anti-dumping measures, that gives us a hint of how quickly we or the Community can act. Throughout that article the term "speedy action" is used. But how speedy is "speedy"? If I have read the documents aright, we cannot interfere with goods already in Customs.

The definitions laid down defining injuries caused through subsidisation and dumping are clear. However, may we be told whether damage to domestic producers covers not only their loss of trade in this country but the knock-on effect and the subsequent damage to their export potential? May we also be given clarification of exactly how a third non-signatory country is involved? For example, when clothing is imported into this country from Hong Kong via Italy, how do we intend to deal with the third country? We cannot do it at present. Perhaps the Minister will explain how that can be done.

Somewhere in the document I read that we have to discover and prove our competitors' manufacturing costs. Is any information forthcoming from the Government to assist private firms to cost their competitors' textile goods? The Wool, Textile and Clothing Action Committee is at present investigating the cost of imported suits, which will cost £75,000.

Finally on these two agreements, what are the Minister's thoughts about how he will deal with a cargo of, say, yarn or golf balls that has been dumped and which is far outside an equitable share of world trade by any yardstick? Such a cargo having been dumped, the trade cannot be retrieved. Once the toothpaste is out of the tube, how do we get it back? Will industry be allowed to exclude cargoes that have been dumped until the damage done to trade can be repaired?

I want to say a word about the technical barriers code, contained in agreement 7657. It is industry's opinion that the opposite of what is laid down in that code happens. Others will be able to quote examples from their own constituencies. I shall mention only fire extinguishers.

In Sowerby there is a firm called Nu-Swift, which exports fire extinguishers that are produced to a high technical standard. The experience of that firm is that there is manipulation of technical standards in Community and other countries. I believe that the experience of that company is common

I am told that the technical department of Nu-Swift has been negotiating with the French for five years, seeking approval for the company's products, and has met with delays and deliberate procrastination. The Danes have apparently carefully written a new technical standard which is different from any other in the world to protect that country's industry. The Germans, Italians and French; who voted in favour of a defined EEC standard, have as yet given no indication of adopting that standard and that code.

If article 5 is accepted by all Governments many of the troubles will be swept away, but will foreign industry allow foreign Governments to adopt this code? Will other countries besides Canada, the United States of America and Japan accept the tariff protocol?

My correspondent quotes Australia, Brazil, Malaysia, Equador, Venezuela, New Zealand, Kenya and South Africa as countries with negligible tariffs against goods coming to this country but punitive tariffs and restrictive licences in the other direction. If these measures do not work, manufacturers in this country will press for counteraction of the sort that I know the Minister deplores.

My last point relates to Government procurement agreements. The hon. Member for Keighley (Mr. Cryer), who carefully read the speech that I made on 13 November, has made some of the points that I wanted to make. I am glad to hear that the situation with regard to advertising has improved. What happens when our manufacturers reply to those advertisements? In one case, where a manufacturer replied to a German police tender he was told curtly not even to send representatives. In other cases, manufacturers have deliberately been misled and messed about.

These documents would be first class if we could be sure that they will be implemented in other EEC countries as fairly as we know they will be in this country.

11.1 pm

Mr. Douglas Jay (Battersea, North)

I agree with the Minister that we must welcome the successful result of the Tokyo round. I also agree that it has to be launched at a remarkably unfavourable moment in world trade as a whole.

However, there are some points which the Minister did not make entirely clear. I asked whether the subsidy rules applied to food exported from the EEC, and I take it that the answer is "No". If I am incorrect, perhaps the Minister will let me know later. Secondly, although he spoke on the legal aspects of this order, which, after all, is a definition of treaties order, I was not exactly clear whether he was saying that these tariff changes are already in force in the United Kingdom, whether this order brings them into operation in the commercial as well as the legal sphere or whether some further step is to come. May we know exactly when the changes are to be made?

Thirdly, the Minister did not say much about some of the wider applications of the results of the Tokyo round. Presumably, the changes generally will lower United Kingdom tariffs on imports from sources outside the EEC. I presume that that is one part of the operation. However, apart from Japan, it is not so much imports of manufactured goods from outside the EEC but rather imports from within the EEC that are now causing so much trouble to British industry.

In 1979 our deficit in visible trade in manufactured goods with the EEC Six was nearly £4 billion, and any discussion of our present trading situation which ignores that fact is a little unreal. The fact is that something must be done to correct it if British industry is to survive.

I have recently heard a good deal of discussion in all sorts of quarters about the economic and trading consequences if the United Kingdom were to withdraw from the EEC. There is no harm in having a little discussion about that. It seems to me that the tariff reductions and, indeed, the other changes made in the Tokyo round should enable us to examine this issue rather more clearly.

Some people imagine that United Kingdom trade has been so drastically switched and redistributed by EEC membership that if we withdrew there would be a major upheaval and all sorts of markets would be closed to us. But, interestingly enough, the figures—which the Minister did not quote, and I do not complain of that—show that that is almost totally untrue. Although our membership has imposed an enormous balance of payments burden on this country, it has not switched our trade geographically nearly so far as many people seem to believe.

Figures quoted in The Economist on 17 November 1979 show that whereas in 1972, before entry, Britain took 68 per cent. of its total imports from the non-EEC world, in 1978 it still took 62 per cent. That was no violent switch. In 1972 exports to non-EEC countries accounted for 70 per cent. of total exports, and the figure was still 62 per cent. in 1978. We are still doing over 60 per cent. of our trade with the non-EEC world. That should be the background to the debate.

It is rather surprising that we still took 75 per cent. of our total food imports by value in 1979 from sources other than the old EEC Six. It follows that withdrawal from the EEC would not mean as major an unheaval as some seem to think, but a gradual shift back of the percentages to the more natural and less distorted figure that prevailed in the 1950s and 1960s.

Withdrawal would do something more important in the trading sphere. It would give us the option of imposing these new and more moderate Tokyo round tariffs on manufactured imports from the rest of the EEC, as well as from the rest of the world, if we so wished to do. It would not compel us to do so, but it would give us that option.

I hear much talk in the Palace of Westminster and elsewhere about import controls. I would have more sympathy with those who advocate import controls if they frankly advocated outright withdrawal of Britain from the EEC. We cannot impose import controls on EEC goods unless we withdraw from the EEC. It is no good putting import controls on Japan without putting import controls on the EEC, because Japanese imports would, in many cases, be replaced from the Continent.

Three or four years ago I would have advocated that if we withdrew from the EEC we should rejoin the EFTA group—which has done remarkably well outside the EEC—and practise, as Sweden, Norway, Switzerland and Austria now do, industrial free trade with the rest of the EEC as well as EFTA. We could have done that in the early 1970s.

In view of our trade deficit in manufactured goods, and because EEC membership has done so much damage to British industry, especially the motor car and steel industries, I am afraid that for a time we would have to adopt the alternative of imposing these new Tokyo round tariffs on manufactured imports from the EEC if we were to withdraw from it. That would not be such a terrible reversal of policy, considering how low the tariffs are at present. It would mean that the other EEC countries would impose corresponding tariffs on Britain. I believe that we have reached the stage where we would gain by that double operation.

We also hear talk from time to time about a siege economy for this country as the alternative to EEC membership. That sort of philosophy seems to spring from a certain amount of ignorance about the facts of international trade, because to impose the now very moderate Tokyo tariffs on manufactured imports from Germany, France and Italy—the same tariffs that we are imposing anyway on imports from Japan, the United States, Canada and many other countries—would be to adopt not a siege economy but a very moderate policy for this country, and would indeed extend the normal way of conducting international trade.

As an illustration of what this sort of change would involve I should like to ask the Minister one concrete question. Can he tell us what is the present EEC common external tariff, after the Tokyo round, on motor cars on the one hand and on manufactured steel goods on the other? That would show the sort of changes that would be involved.

All that I want to do, apropos the order, is to ask hon. Members to start examining these options seriously in the light of the changes now being made, so that we may have some intelligent view of what would be the economic consequences of withdrawal, because we shall never have any real economic recovery in this country until we free ourselves from these restrictions.

11.12 pm
Mr. Ivor Stanbrook (Orpington)

It seems that no matter what subject the right hon. Member for Battersea, North (Mr. Jay) discusses he always comes to the same conclusion. This subject is far wider than the EEC. It is a pity—and to some extent I go along with those Labour Members who are not great friends of the EEC—that we do not have sufficient opportunity to discuss these matters, and these agreements in particular, before they are enacted or passed into our law. After all, the Tokyo round staggered to a conclusion last year after six years. It was because it came to a conclusion that, as the right hon. Member for Lanarkshire, North (Mr. Smith) said, it was a success.

If all the agreements are implemented there will be a degree of greater liberalisation of trade, and to that extent we can congratulate those who were responsible. They comprised a great many people on a world scale, and this country was represented at the negotiations by the representatives of the Commission, albeit with assistance from us.

It means that we are discussing a harmonisation of a harmonisation.

Mr. Spearing

Yes.

Mr. Stan brook

By the time the subject comes to this Chamber we are in the difficulty that the experts have worked it out in two arenas, and the Government must surely be satisfied that what has been obtained is the best that could possibly be obtained. Perhaps the better Committee to discuss the merits of these agreements and their implications for British trade and industry would be the Select Committee on Industry and Trade rather than the Scrutiny Committee. The agreements represent a degree of progress in the area of international trade, and I welcome that.

With regard to the anti-dumping provisions, there are notable improvements in the system that will apply henceforth.

There are greater powers on the part of the Commission. The fact that to institute a dumping complaint one does not need to show even a prima facie case, but merely sufficient evidence to be accepted by the Commission, is a great advantage to British industry, because as from that point the Commission takes over and has a duty to investigate, get at the facts, and pursue the case.

Mr. Leighton

Is it not a fact that this Parliament now has no anti-dumping powers against the EEC in terms of Community obligations? As far as the rest of the world is concerned, we are obliged to ask the Commission to do something for Britain. We have abdicated all our powers. We have no powers against dumping.

Mr. Stan brook

That is not true. In its wisdom this Parliament decided that the best way of tackling this problem was by concerted action with the other members of the EEC. By that concerted action we expect to get better results, and I am sure that that will be the case. It is a good thing that the Commission should, in future, be responsible for pursuing anti-dumping complaints and carrying, one hopes, its action to a logical conclusion.

The point has been made concerning Government procurements that there should be a fair balance and that the list which the Government have as a result of the agreement—there is provision for adding to it—should be such that we are not at a disadvantage compared with those industries on lists submitted by other countries. I am sure that the Minister will keep a close eye on that to ensure that there is reciprocity and a fair balance.

This is a complicated subject and the issues involved are extremely important to trade and industry in this country. Because we now have additional powers, additional opportunities for trade and additional weapons to defeat the scheming of foreign competitors outside the EEC who do not observe the rules, it is important that our industries should be well advised about the tools available.

I hope, therefore, that the Department will make sure that there is wide propagation of information about the opportunities now available as a result of our adoption of these provisions.

11.17 pm
Mr. Bob Cryer (Keighley)

I am delighted that as a result of the careful scrutiny of the Select Committee on Statutory Instruments this instrument is once more back on the Floor of the House of Commons for examination. It is a slight document, covering a massive range of negotiations. It cannot be faulted technically, but it behoves all Committees of the House to look at every document with great care, otherwise things which are far more important than hon. Members realise will slip through.

I want to speak briefly about the textile industry. As a background to the present condition of the industry, the draft annual report of the Bradford chamber of commerce states: Nowhere are these problems more acute than in the wool textile industry, which still comprises a very important proportion of the membership of the Chamber. That this industry is basically a well equipped, modern and efficient industry is beyond doubt, but the adverse factors enumerated above, sharpened by the difficulties caused by subsidised and dumped imports, are causing serious concern. It is natural, therefore, that when we examine something as wide-ranging as this instrument—which involves a reduction in tariffs—we should do so with a close and critical eye

Can the Minister say how, under the subsidies and countervailing duties agreement, the Commission will determine the principles for deciding injury? Can duties be imposed only when subsidised imports cause injury to domestic industry? Some people would argue that the textile industry has already suffered a significant degree of injury, and that often the Commission delays action until the damage has been done and cannot be remedied

As has been mentioned already, the idea of having technical regulations and standards is all very well when it is universally applied. Britain does not apply technical regulations and standards to imports to a significant degree. For example, the Health and Safety Executive does not examine imports. I asked a question about that some time ago. We have those powers under section 6 of the Health and Safety at Work etc. Act. Safety standards are specifically exempt from the non-discriminatory arrangements. I ask the Minister to consider the universal application of safety standards to imports of manufactured goods.

I turn now to the anti-dumping agreement. We have no anti-dumping powers. I hope that the anti-dumping arrangements will be applied effectively and that the Minister will bring pressure on the Commission to apply those powers. An anti-dumping unit is maintained by the Department of Trade. It was originally maintained by the previous Labour Government. However, it is virtually impossible to prove dumping. There is no reason why the Government should not consider changing the onus of proof. The importer should have to prove that the goods that he is importing are not being sold at dumped prices. The industry should not have to prove that they are. It is difficult for a manufacturer to gain access to the documents which may prove dumping.

Mr. Spearing

The issue is more complex than that. Anti-dumping does not have to affect any one place, such as Sowerby, but damage to the industry in the Community must be proved. Therefore, an industry in one part of the nation can be wiped out so long as production continues in another part of the Community. In that case, anti-dumping orders are irrelevant.

Mr. Cryer

The wide definition of "industry" creates the difficulty. By virtue of our membership of the Community we are not able to take effective action against other members or the Community. If we suffer from any blemishes in the Tokyo round, we shall be at a further disadvantage because of opposition within the EEC.

I have reservations about Government procurement. The agreement's aim is to ensure the principle of non-discrimination between domestic and foreign supplies. That is nonsense. It is a waste of energy for uniforms for the Paris Metro staff to be manufactured in Britain and taken to France, and for a French manufacturer to make uniforms for the London police and cart them here. That is an absurd waste of energy. That is called trading, but we must understand that thousands of jobs are lost in the textile industries every month. Preferential procurement by the Government and local authorities by massive contracts for all types of services can save those jobs. It seems daft to put people on the dole in York- shire while contracts for uniforms go to other Western European countries, such as Germany, which do not depend on the textile industry as much as we do.

This is not simply a matter of saying that it is trade. We must discriminate. The view of the Labour Party and the TUC is that if we are to solve the problem of deindustrialisation we must exercise discrimination through quota and import controls, and that is right.

I entreat the Minister to clear up a consequential matter that has been raised tonight. The basis of the debate is also Cmnd. 7724—the White Paper on the multilateral trade negotiations 1973 to 1979. Paragraph 22, entitled "Staging of Tariff Cuts", states: The Community has reserved its right to stop the tariff cuts after five stages in 1984 without proceeding to the last three stages, if it judges that the economic or other circumstances at the time require this. That is straightforward, but paragraph 18, which I quoted earlier, under the general heading "Textiles", states: In addition, the Community has reserved its right to withdraw its textile tariff concessions in the absence of a mutually acceptable arrangement regarding international trade in textiles. This relates to the continuance of acceptable arrangements after the present Multi-Fibre Arrangement expires at the end of 1981, and parallels a similar reservation in the US textile offer. That seems specifically to spell out that there is a reservation in the tariff concessions applicable at the end of 1981. Will the Minister confirm that that is so? Will he also confirm that the Government are committed to a renewal of the multi-fibre arrangement? If so—this is an opportunity to do that and it is relevant to the debate because it is in the White Paper—the industry will have some element of improved confidence. The industry is in need of a fresh injection of confidence. The Minister's earlier remarks and the remarks of the Secretary of State have not injected confidence about the future of the textile industry, which is facing a number of problems. If the hon. Gentleman could answer those questions and affirm clearly and unequivocally that the Government are committed to extend and improve the multi-fibre arrangement. it would be very useful.

11.28 pm
Mr. John Butcher (Coventry, South-West)

I am concerned about the remarks made by the hon. Member for Keighley (Mr. Cryer) vis-a-vis uniforms crossing the Channel in each direction. If I interpreted his remarks correctly, he was implying that we should be self-sufficient in all products. This country has always had to export or die. In order to export, surely we must specialise. That is the basis of our international trade and of our successes in latter years.

Mr. Cryer

By "specialise", does the hon. Gentleman mean that we should have a permanent massive balance of payments deficit with virtually every Western European country? By "specialize", does he mean that he is prepared to discard our textile industry because other countries regard their textile industries as more important?

Mr. Butcher

I think that the opposite has been implied. I should like to come back to this point and tie it in with the need for greater efficiency in many of our industries, which protection does not help in many instances.

I welcome the Minister's statement in the context of the interests of the Midlands, Coventry, the South-West in particular, and almost anywhere where engineering takes place in the United Kingdom.

Engineering is a harassed and beleaguered industry and it has often felt that, while this country has played the game in terms of international trade, other countries have not. Therefore, measures on anti-dumping, on the harmonisation of international or national standards, on Government purchases, and particularly on non-tariff barriers, are to be welcomed.

If, in current circumstances, I were to look at the main candidate for antidumping treatment, I should look to the COMECON bloc. In particular, I should look at the Lada car, which many people strongly suspect is supplied to purchasers in this country at a price which, by no stretch of the imagination, can cover the costs of manufacture and transportation. In the current political climate, at which the very top of this Administration is looking, this may be an economic measure which has a political as well as a fair trading basis. I should record that 22,000 Lada cars are imported into this country each year. This is more than the number of cars imported into this country by companies such as Mercedes or Lancia, which operate from Common Market countries.

Turning to national standards, I am reminded of an amusing, if not farcical, situation which arose inside the EEC. Manufacturers of fork-lift trucks in this country were amazed to discover that the European standard for this vehicle had been changed to incorporate a detachable fuel tank, a feature in which French manufacturers specialise. It happened that the French lobbying inside the EEC had been exceedingly effective, to the disadvantage of British, German and Scandinavian manufacturers. I hope that the measures announced tonight, dealing with national standards and the harmonisation of international standards. will have the desired effect.

When we consider the measures concerning Government purchases, we have to remember that no agreement can deal with the "nods and winks" factor. I suppose that if I were looking for a villain here I would have to cite the Germans who are very clever at nods and winks, as any prisoner of war during the last war will know. The "Buy German" policy does not need description in legislation. It does not need abolition by agreement. It simply occurs. As someone who, commercially speaking, was weaned in the computer industry, I wonder whether we are as tough as the Germans when it comes to buying our own products. Consequently, I welcome the clearer phrasing in the provisions dealing with Government purchases.

The part of my hon. Friend's speech which will delight people all over the West Midlands was that in which he said that he would be prepared to consider the possibility of import restrictions where excessive imports were threatening the viability of indigenous industry. That will be interpreted in engineering companies all over the country as at least a declaration of intent that the Government will not be messed around and will not be hoodwinked, as their predecessors were.

11.33 pm
Mr. Parkinson

A number of points have been raised in this relatively short debate, and I hope that the House will forgive me if I am unable to reply to all of them. If I miss any major points I shall write to the hon. Members concerned.

I begin by referring to the remarks of the right hon. Member for Lanarkshire, North (Mr. Smith). He talked of the dangers of idealism. Perhaps if we described the motivating force behind our negotiations as enlightened self-interest some of the difficulties would disappear. The truth is that it is not because of idealism that we want to see the world trading system kept open. It is simply because we export 33 per cent. of everything that we manufacture. We have a vested interest in having access to other people's markets for our goods. That is why the Government, and the right hon. Gentleman, supported the move to keep the world's trading system as open and fair as possible.

The right hon. Gentleman asked about textiles, in particular synthetic fibres. I have a sad piece of news to impart to him. He seems to be the only person who remembers that statement in Brussels in April. Every time I mention it people look slightly baffled. Certainly none of those whom I have met left that April meeting feeling in any way committed to taking action.

Mr. John Smith

May I suggest that those who have difficulty in recalling this matter read the official record of the Community? I have checked it. The Minister will find that that was the decision reached. If he was doing his job he would have pointed this out to the other countries a little more emphatically than he seems to have done.

Mr. Parkinson

We have been pointing it out very emphatically. One of our problems is that the right hon. Gentleman and his colleagues cried wolf so often that they rather devalued Britain's complaints. Britain established a reputation as a full-time bleater, and when we have a real problem now we find it difficult to get proper recognition of it.

The Commission is committed to bringing forward specific proposals for action which will be decided at the February Council. As the right hon. Gentleman knows, these Councils are officially Foreign Affairs Councils. A wide range of subjects is discussed, and the Lord Privy Seal normally reports to the House on behalf of all Ministers about the results of those meetings. At the last meeting textiles, steel and a wide variety of things were discussed. That is why one departmental Minister, namely, the senior Minister from the Foreign and Commonwealth Office, reports on the proceedings.

My hon. Friend the Member for Sowerby (Mr. Thompson)raised a range of specific and detailed problems, and I shall write to him about them. He asked two questions. The first was whether we would be in a position to take effective and speedy action against dumping. We were not satisfied with the arrangements that we found when we were appointed to office. My right hon. Friend and I went to Brussels. We pressed the Commission. The anti-dumping unit has been strengthened, and I believe that it is now more effective. We have retained an anti-dumping unit here. We have issued an advisory document on how to take advantage of the procedures. We remain available to back up British industry if it feels that it has a complaint, and we shall do what we can to speed up the procedures.

My hon. Friend then asked whether we could reckon on the rest of the world implementing the various codes as we will. A committee of signatories on each code has been established to monitor how the code works. We shall take advantage of those committees and press to make sure that other people, who have voluntarily signed these agreements and committed themselves to implementing them, and have established the procedure for monitoring that implementation, do the same.

The right hon. Member for Battersea, North (Mr. Jay) raised a number of interesting points. He asked about agricultural subsidies. I am advised that the rules have been refined, but there has been no major change in them. I shall write to the right hon. Gentleman on the other details of his question.

The right hon. Gentleman also asked when the tariff cuts come into effect. With the exception of textiles and steel, which will take effect in 1982, they came into effect on 1 January of this year.

Mr. Jay

So they came into effect before the order came before the House?

Mr. Parkinson

The agreements were signed by the Commission and by the Government, but, for the reasons that I have explained to the right hon. Gentleman, because of a procedural snag there was a delay in their being approved by the House. The agreements came into effect, and were signed to come into effect, from 1 January.

The right hon. Gentleman, in a persuasive fashion, developed his theme that the answer to our problems is to leave the EEC. I do not share that view. I think that it would be wrong to raise artificial barriers against people with whom we do 50 per cent. of our trade. Whichever way the right hon. Gentleman tries to talk, the fact is that the figure is edging towards 50 per cent. Let me give the right hon. Gentleman some details. Germany has overtaken America as our major trading partner. France is our third, Holland our fourth, Benelux our fifth, Denmark our ninth and Ireland is our sixth. The right hon. Gentleman is saying "Raise tariffs against all our major trading partners" as an answer to our trading problems. It is nonsense.

Mr. Jay

rose—

Mr. Parkinson

I shall not give way. The sooner the right hon. Gentleman faces up to the fact that he has been backing a loser for a very long time, the happier we shall all be, and the earlier, perhaps, some of us will get to bed.

The right hon. Gentleman said that the EEC had damaged our motor car industry. That is absolute rubbish. What has damaged our motor car industry is our own inability to perform and to compete. The sooner the right hon. Gentleman and his friends start telling their friends the truth, and stop misleading them into thinking that there is an easy way out of our problems, the better for all of us.

The right hon. Gentleman asked what the tariffs on steel and cars were. An exact figure is not available, but the answer is between 8 per cent. and 11 per cent. It is a range of tariffs.

The hon. Member for Keighley (Mr. Cryer) raised a number of subjects and repeated a number of his deeply held and totally misguided beliefs. The answer to one of his questions is that there are two specific let-outs on the textile tariff cuts. First, if there is not an MFA—

It being one and a half hours after the commencement of Proceedings on the Motion, Mr. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 3 (Exempted Business).

Question agreed to.

Resolved,

That the draft European Communities (Definition of Treaties) (Multilateral Trade Negotiations) Order 1980, which was laid before this House on 15th January, be approved.