HC Deb 03 July 1985 vol 82 cc327-8
12. Mr. Teddy Taylor

asked the Secretary of State for Trade and Industry what was the deficit in manufacturing trade with Germany and Japan, respectively, in the most recent annual period for which figures are available.

Mr. Tebbit

In the 12 months to May the crude deficit on our manufactures trade with the Federal Republic of Germany was £5.4 billion and with Japan £3.1 billion.

Mr. Taylor

Do these alarming German figures show that we may be making a serious mistake in trying to make Japan the scapegoat for our trading problems, when many of the complaints about Japan fall apart on careful examination? Is my right hon. Friend willing to make representations to the German Government, asking them what steps they are taking to reduce the deficit, particularly when a significant part of this stems from clear abuses of the Anglo-German trade agreement and of non-tariff barriers?

Mr. Tebbit

My hon. Friend is on a bad point in being an apologist for Japan. Our policy is not to achieve a particular balance with each trading partner in each category of goods. Our quarrel with Japan is over its trading tactics, the barriers against imports—not just against the United Kingdom but against other countries — which we find almost impenetrable, the use of subsidy on exports to an excessive degree, and its control of the yen.

Germany is far more open, although she certainly has, as my hon. Friend says, quite disgraceful and blatant discrimination in some sectors, most notably, for example, against the insurance industry. My hon. Friend can be assured that I put that point most vigorously in the European Community and I hope that the Commission will eventually get up and begin to take some action over it. Lord Cockfield's White Paper may point in that direction.

Mr. Baldry

Is not the way to tackle deficits, whether with Germany, Japan or any other country, for Britain to seek to win a larger share of world markets? Is not the way to do this for the Government to assist manufacturers to win crucial export orders by assisting where necessary with loans to purchasers? Does my right hon. Friend agree that it is possible for us to do that without being dragged down into the subsidy quagmire?

Mr. Tebbit

In the trade between ourselves and Germany, happily, not a great deal of subsidy goes into the dumping of exports on each other. The way in which to get more of our exports into Germany, particularly our maufacturing exports, is to follow the example of Jaguar, which, from a very poor position a little while ago, has been increasing its exports substantially by the simple expedient of producing what the German customer wants.

Mr. John Smith

What precise lessons have been learnt by the Government from the Bosporus bridge affair, and what changes in Government policy might we expect to see?

Mr. Tebbit

The lessons that we have learnt are that, first, we must look with caution upon Japanese Government statements until they are backed by Japanese Government action in the same direction as the policy statements. Secondly, our companies must try even harder to be thoroughly competitive in every direction, including their choice of partners in such important contracts. Finally, the Government, too, must make sure that we are ready, on hand, with a quick response, within sensible limits of subsidy and assistance to our exporters. That lesson is well known, and was successfully carried through in the way that we beat the Japanese to the Korean steel mill contract recently.