HC Deb 28 January 1987 vol 109 cc331-3
10. Mr. Geraint Howells

asked the Secretary of State for Trade and Industry if he is satisfied with the progress of efforts to resolve the current trade dispute between the European Community and the United States of America; and if he will make a statement.

Mr. Alan Clark

Further negotiations have taken place between the Community and the US Administration during the last few days. On 26 January the Council agreed, with the full support of the United Kingdom Government, that these should continue with the aim of securing early settlement of the dispute.

Mr. Howells

Does the Minister agree that unless the grain dispute between Spain and America is settled satisfactorily in the short term it could cost European taxpayers up to £300 million in compensation, and that the Americans in turn could impose a levy of 200 per cent. on some of our exports from the EEC?

Mr. Clark

The hon. Gentleman is quite right to remind the House that the possibilities of escalation are very serious. However, conversations continue and I under-stand that there will be further contact between Commissioner de Clercq and the United States trade representative Mr. Yeutter this afternoon. I suggest to the House that it is not especially desirable to discuss the details of various negotiating ploys at this stage.

Mr. Galley

My hon. Friend will be aware that the "Buy American" provision in some of the protectionist legislation is having a seriously adverse effect on the machine tool industry in my constituency and elsewhere. Does he appreciate that many sectors of British industry are fed up and have the impression that Britain plays fair and other countries do not? Will he express in the strongest possible terms to the United States Administration our anger at their growing unfair protectionism and to the EEC Commission the regret of British industry at the Commission's lack of action?

Mr. Clark

My right hon. Friend the Secretary of State and I frequently express our indignation at this in our meetings with representatives of the United States Government. Although my hon. Friend's remarks are not strictly relevant to the EEC-United States dispute, and the United States is entitled under GATT to compensation for loss of trade, there is no doubt that the manner in which the negotiations were opened by the Americans illustrates their increasing propensity for taking unilateral action in trade, irrespective of their obligations under GATT. There have been several examples of this, of which the "Buy American" provision in respect of machine tools is one. The super fund, the customer user fee, tax discrimination in respect of light aircraft and the semiconductor arrangement with Japan, in their different ways illustrate the unilateral exercise of United States muscle. They are undesirable and the subject of legitimate protest.

Mr. Carter-Jones

Is the Minister aware that he would have the support of the entire House if he did not allow the negotiations to prevent his Department from providing speedy support for the A330 and A340 Airbus? Is he aware that his Department's support of the A320 Airbus, which preserved that high technology, is likely to be repaid in the very near future?

Mr. Clark

Yes, Sir. The two subjects are not easily taken together, but I endorse and support everything that the hon. Gentleman said. He is right to say that the A320 has been an outstandingly successful aircraft. There is no doubt that its encroachment on a market that has hitherto been dominated by the United States is giving rise to much heart-searching among Americans in an attempt to stifle it.

Mr. Roger King

Trade wars have a habit of escalating. Can my hon. Friend confirm that with the west midlands and the midlands generally poised to start the export of the Rover Sterling and Range Rover cars in the next few weeks, the prospect of a trade war extending to cars would place the future of the British car industry in jeopardy?

Mr. Clark

I understand why my hon. Friend makes the point, but we are still a long way from escalating the war out of agriculture. Our objectives are, naturally, to reach a compromise and to prevent another round of escalatory measures, even within the confines of agriculture.

Mr. Stuart Holland

While allowing for the loss of United States exports to the European Community following the accession of Spain and Portugal, may I ask whether the Minister agrees that the underlying pressures for protection in the United States are aggravated by increasing imports into the United States from American companies abroad? Will he urge the United States authorities to restrain the punitive protection that they are imposing on individual United Kingdom companies, such as Burroughs, and in sectors such as gin?

Mr. Clark

The United States economy is already in such disarray that it would not he appropriate for me to urge measures or sanctions upon its representatives during our negotiations.