Multi-fibre Arrangement

HC Deb 16 April 1986 vol 95 cc857-60

3. Mr. Patchett

asked the Secretary of State for Trade and Industry if he will make a statement on the current state of negotiations on the multi-fibre arrangement.

6. Mr. Waller

asked the Secretary of State for Trade and Industry if he will make a statement about the outcome of the general agreement on tariffs and trade textiles negotiations at Geneva.

The Minister for Trade (Mr. Alan Clark)

On 11 March the Community agreed on a negotiating mandate for renewal of the MFA. There was a meeting of the GATT textiles committee in Geneva on 3 April. Further meetings will be held with the objective of concluding negotiations before the end of July. I shall continue to keep in close touch with the industry and other interested parties as the negotiations progress.

Mr. Patchett

Why has the EEC agreed a negotiating mandate that allows an increase in imports of between 4 and 6 per cent. when it is anticipated that there will be a mere 1 per cent. increase in domestic growth? Will that not affect jobs in the British textile industry?

Mr. Clark

I am confident that the negotiating mandate that has been agreed still gives our industry a very considerable measure of protection. In my consultations with the industry, both before and since, I have been satisfied that it is reasonably content with that. But the two percentages that the hon. Gentleman has set against each another are not at all comparable. Consumption is increasing by 1 per cent. The hon. Gentleman quoted the figure of 6 per cent., but quota imports account for only 10 per cent. of consumption.

Mr. Waller

Is my hon. Friend aware that the United States Administration appear to be taking a much more restrictive approach to the negotiations than is the European Community. What assessment has he made that frustrated MFA exports to the United States may be diverted to the much more open Community market, and what action does he believe the Community should take in response?

Mr. Clark

It remains to be seen whether the posture of the United States Government is translated into action in their attitude to this question. I am satisfied that the Community's position is as restrictive, if that is the word that the hon. Gentleman welcomes, as we could have expected and as we could have achieved. It is within those confines that any diversion of imports from the United States would be restricted.

Mr. James Lamond

Does the Minister recall that in his article in The House Magazine, which was a little belated—no doubt that was not his fault—he hinted that some sort of trade-off had been done when the mandate was agreed and that we would allow more imports into this country in return for greater access by our exports to other countries? May I remind the Minister again that many tens of thousands of jobs have already been lost in the textile industry and that large numbers are still at risk if we do not get a proper, good and strong multi-fibre arrangement?

Mr. Clark

Yes, I fully accept what the hon. Gentleman said. I am well aware of the jobs that are at stake in this area. However, I must point out that domestic production, United Kingdom consumption and United Kingdom exports have all increased. It would not be realistic, and it was never envisaged when the multi-fibre arrangement was first set up, that it should be set in its existing form indefinitely. I think that it is useful for us to have the possibility of setting progressive, selective liberalisation of the arrangement against increasing the prospects of British exporters in other markets and other sectors.

Mr. Nicholas Winterton

Is my hon. Friend aware that his last answer will be very disappointing to those of us who have put a great deal of confidence in his good sense and national interest in the British manufacturing industry? Does he not agree that he has indicated that there has been a sell-out of our textile and clothing industries on the altar of high technology industries? Those high technology industries do not employ the very large numbers of people who are employed in textile and clothing, which are excellent industries. Will he perhaps, even at this late stage, ensure that the interests of a substantial employer are safeguarded in the ultimate MFA agreement?

Mr. Clark

Naturally I am sad to have disappointed my hon. Friend, whose robust pronouncements, on these topics I always welcome. I caution my hon. Friend that to use the words "sell-out" to describe what I regard as a very satisfactory solution, given the pressures and possibilities that were originally envisaged, is using ammunition that he may well have found more useful and effective under conditions that did not eventuate. It is wrong to attempt, without discrimination, to safeguard industries simply because they are old fashioned, have not modernised or have a high employment content when it is our business to open the possibilities for British exporters in every sense. I would not for one moment accept the inference that the industry is being sold out. My hon. Friend is using language that is not justified by the facts.

Mr. Ashdown

As the Minister has just hinted, there will be pressure at the forthcoming lateral trade negotiations to ensure that the regulation of textile trade is brought back within the GATT procedures after the end of MFA 4 in return for an extension of GATT rules to the service sector. Will he make it clear that if such a move were to be made it would be Her Majesty's Government's intention to use article 19 of GATT and to require the renegotiation of article 11 of GATT to be brought into operation in such a way as would protect our most vulnerable sectors?

Mr. Clark

I cannot predict the course of the GATT negotiations, in which both concession and advantage will be traded with the interest of the United Kingdom industries at every level in the market.

Mr. Brandon-Bravo

In balancing our domestic objectives with a desire to help the Third world, does my hon. Friend agree that the purchasing power of our people, of which employment in the textile trade plays a large part, is a factor in our ability to buy products from the Third world? Does he agree that any damage to our employment base would not help the Third world or us?

Mr. Clark

I entirely agree with my hon. Friend. That was very much at the forefront of our minds in concluding the form in which the mandate has been settled.

Mr. Madden

Is the Minister not aware that the Government's undue haste in agreeing the negotiating mandate has given rise to extensive suspicions within the industry that it is being sold out? Does he not recognise that the British textile and clothing industries are together our fourth largest manufacturing concern, employing more than half a million men and women, many in areas of high unemployment, and that their export efforts are excellent? Will the Minister give a clear undertaking that the British Government will in no way sacrifice the interests of these very important industries for any other considerations whatsoever?

Mr. Clark

Again, the hon. Gentleman is using the language of hyperbole, which is not justified by the situation. He says that the industries suspect that they are being sold out. I have been in consultation with them both before and since, and no one has ever used that phrase, or anything like it, to me. Indeed, people have expressed their satisfaction with the form that the mandate has taken.

Mr. Sims

Will my hon. Friend confirm that within the Community context the British Government represent the interests of the Hong Kong Government? Will he bear in mind that Hong Kong offers an open market to goods from the United Kingdom and in the past has made a considerable sacrifice of quota, which has not in fact given any benefit to undeveloped countries?

Mr. Clark

Yes, one of the central elements in the mandate has been that exporting countries which have liberal regimes and do not restrict our imports have been treated more generously than those which still retain restrictive barriers.

Mr. John Smith

Does the hon. Gentleman not understand that the industries' concern arises from what appears to be a virtual abandonment of safeguards, and a permitted quota growth six times higher than the projected market growth in some of the most sensitive sectors? There is also the possibility of the United States taking a very tough line. Does the Minister not realise that the fears are justified, and that the earlier optimism about his personal stand is being eroded day by day as he continues to mouth the viewpoint that he once derided from the Back Benches?

Mr. Clark

I am amazed that the right hon. and learned Gentleman can speak as he does. If he considers the facts, and considers what actually appears in the mandate—he knows that I cannot disclose the whole of the mandate on the Floor of the House, but I shall be perfectly prepared to discuss it with him—and if he discusses the matter with industries he will find that the mandate has been negotiated on a basis that is relatively restrictive—and much more restrictive than was originally conceived.

Mr. Spencer

While the industry in Leicester looks forward to a sensible new arrangement, is my hon. Friend aware that there are textile manufacturers in my constituency who export to Hong Kong, and does he not agree that no amount of protectionism is a substitute for enterprise?

Mr. Clark

Yes, that is absolutely true. I drew the attention of the House to the achievements of the industry. When I told my hon. Friend the Member for Macclesfield (Mr. Winterton) that it was not our purpose to protect old-fashioned industries, I did not intend to include the textile industry generically. The arrangement is a safeguard within the cover of which the whole industry can modernise. Its achievements in that field are reflected in the very things that my hon. Friend has mentioned.