HC Deb 29 June 1981 vol 7 cc568-70
31. Mr. John Townend

asked the Secretary of State for Trade if he will make a statement on the eve 1 of imports of Japanese cars.

Mr. Eyre

Prudent marketing, voluntarily adopted by the Japanese manufacturers, kept their annual share of the United Kingdom car market between 9 per cent. and 11 per cent. for the five years from 1975 to 1979. Their share of a smaller market in 1980 was 11.9 per cent. and up to the end of May this year it was 11.4 per cent. It was stressed again to Japanese Ministers in London on 17–18 June that we expect a significant reduction in their overall share this year compared with 1980.

Mr. Townend

Having regard to the non-tariff barriers that British exporters face in the Japanese market and our serious unemployment problems, will the Government consider following the example of the French, who, by methods so far indisclosed, have restricted the import of Japanese cars to 3 per cent. of their total market?

Mr. Eyre

It is essential for the Japanese to take action or protectionist pressures in the European Community will continue to grow. The Community's view is that the Ottawa summit should fully consider ways to alleviate the strains on the international trading system resulting from Japan's economic and trading practices.

Mr. McNamara

What share of our automotive parts production is taken by Japan? Why could the Department of Trade not tell us, in answer to recent questions from me, the degree of import penetration with automative part from European and other countries?

Mr. Eyre

Coming from the West Midlands, I expecially appreciate the hon. Gentleman's point about automotive parts, which, in fact, came into the discussions that I referred to. I shall look into the matter and write to the hon. Gentleman specifically.

Mr. Bowen Wells

Does my hon. Friend agree that the real alternative to protection against Japanese trade is, first, to encourage a positive attitude towards trading with Japan? Will he therefore work in that direction, to open up Japanese markets to our exports? Secondly, just as the United States found a method of altering the trade balance between the United States and Europe after the war, does my hon. Friend agree that we should encourage the Japanese to set up manufacturing units in this country? In that context, can he tell us how far Nissan has progressed with establishing its plant in this country?

Mr. Eyre

I much appreciate the strength of my hon. Friend's point about positive trading. I assure him that considerable efforts are being made to open up markets in Japan. On his second point, he is right to emphasise the importance of effective investment in this country, which contributes to our manufacturing strength. I can say only that the negotiations with regard to Nissan are still proceeding.

Mr. Park

Does the Minister agree that his answer to the original question illustrated the futility of voluntary arrangements with Japan under which the figures agreed are continually overshot and then put down to an accident? Is he aware that these accidents keep happening and that they always happen to Britain, never to Japan?

Mr. Eyre

I cannot agree with the hon. Gentleman's comments on voluntary agreements. If he looks back, he will see that from year to year they have certainly restrained undue imports from Japan. There are variations within a period of a year which sometimes cause the figures to look worse than they are. Nevertheless, the importance of these voluntary agreements was certainly brought home to Japanese Ministers during their visit.

Mr. Adley

Is there any difference in principle between the attitude of Her Majesty's Government to Japanese motor car manufacturers which wish to invest in manufacturing plants in the United Kingdom, and thus in the EEC, and their attitude towards American companies such as Ford and General Motors which are already here?

Mr. Eyre

American motor car manufacturers form part of an established international framework of manufacture, investment and export. That system is well established. On the other hand, with the prospect of the Japanese coming here, my hon. Friend will know that a large number of important questions have been raised by our component manufacturers as to whether the Japanese investment would beneficially provide jobs for them. Those are important practical questions.

Mr. John Smith

Does the Minister agree that, following restrictions on Japanese imports imposed by the United States in recent months, there will be a tendency for the Japanese to seek other markets in Western Europe? Will he make it crystal clear to the Japanese Government that the proportion of cars should be reduced in the next few years and that if this cannot be done by voluntary means, other means are available to the United Kingdom Government?

Mr. Eyre

The right hon. Gentleman raises a very important point in this respect. This was discussed at the recent meeting. The importance of the non-diversion to this country of surplus Japanese motor car production was emphasised. I am glad to tell him that the importance of this matter was recognised and satisfactory reassurance was given to British Ministers in this respect.