Multi-Fibre Arrangement (Hansard, 19 April 1989)

§ 9. Mr. Kirkwood
To ask the Chancellor of the Duchy of Lancaster if he will make a statement on Her Majesty's Government's policy on the future continuation of the multi-fibre arrangement within the current negotiations on the general agreement on tariffs and trade.

§ The Minister for Trade (Mr. Alan Clark)
We are committed by the GATT declaration at Punte del Este to 329 formulate "modalities" for the eventual return of trade in textiles and clothing to strengthened GATT rules and disciplines.
The United Kingdom attaches the highest importance to the strengthening of GATT rules—in particular, a more effective safeguards clause to allow defensive action to be taken against sudden and damaging surges in imports, and better disciplines on unfair trade and on counterfeiting.
We look for a reduction in barriers to trade and better access to developing country markets, especially the newly industrialised economies. The committee acknowledged the contribution which all participants could make to the process of liberalisation, while preserving our existing rights under the present MFA.

§ Mr. Kirkwood
Having regard to recent developments in the GATT multilateral trade talks in Geneva and the importance of those developments to the knitwear industry in my constituency and in other areas, will the Minister guarantee that he will agree no further changes to the trading system for textiles and clothing unless he secures some of the aims that he mentioned, such as the effective prevention of dumping and subsidies, the GATT safeguard clause, and the dismantling of excessive trade barriers, which effectively block our exports in trade and clothing items?

§ Mr. Clark
I accept that all the factors that the hon. Gentleman mentioned must be taken into account in considering the degree to which the provisions of the multi-fibre arrangement are relaxed or dispensed with. Safeguards clauses are important. As many hon. Members with textile constituencies know, the existing mechanism is unsatisfactory. It is cumbersome and slow. I will ask my officials to look at possibilities for improvements and making better use of the provisions under article 19.

§ Mr. Brandon-Bravo
My hon. Friend will know that many hon. Members are legitimately concerned about the undeveloped world, but that same lobby also seeks completely unrestricted entry into this country of textiles from the undeveloped world. Such a policy could destroy tens of thousands of jobs in the Nottingham and east midlands area. I hope that we will not go down a road that will destroy those British jobs.

§ Mr. Clark
My hon. Friend is right. Paradoxically many of those jobs are held by former citizens of, or immigrants from the very countries for which the lobby that he identifies seeks unrestricted access.

§ Mr. Cryer
Will the Minister make a clear statement that the Government are committed to the renewal of the MFA? The Confederation of British Wool Textiles Ltd., the employers' organisation based in Bradford, is concerned that there has not been a clear and unambiguous statement, particularly as the industry is faced with a Community quota by 1992, instead of a quota for each member state, to make sure that there is a burden-sharing arrangement for the whole of the EEC. Emloyers are also fearful of increased water charges. The effect of those developments will be a loss of jobs. Will the Minister make a clear commitment to maintain the textile industry?

§ Mr. Clark
There is no commitment to maintain the MFA. The commitment is to formulate modalities for the eventual return of trade in textiles and clothing to 330 strengthened GATT rules. That has been unchanged for the last 15 years since the MFA was promulgated. As I have said on the Floor of the House in debate on the subject, that return is dependent on a satisfactory solution of a very large number of other related problems.

§ Mr. Neil Hamilton
Does my hon. Friend agree that the commitment of the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) to Liberalism appears to be somewhat lukewarm in the attitude that he has evinced in his supplementary question? Does my hon. Friend also agree that arrangements such as the multi-fibre arrangement are an arbitrary restriction on consumer choice and on the export potential of Third world countries, and therefore contribute to their impoverishment? Why do we support free trade in every other area of the economy but not in this?

§ Mr. Clark
It is not for me to comment on the esoteric varieties of policy that the Liberal party adopts at any given moment. Consumers do not have a high purchasing power when they are out of work. There are large numbers of consumers who constantly seek advice about buying British goods. There is no special adjunct of faith that dictates and obliges that consumers should always buy the cheapest thing. They consider other factors in making a consumer choice.

§ Mr. Henderson
The Minister for Trade's personal commitment to the MFA is recognised in the House, and the arrangement is an important way of regulating trade between the far east and ourselves. Is he not also concerned about the growing trade gap in textiles with the EC, which is now £1.75 billion? What does he think has caused that gap? If he is concerned about it, what action will he take to try to narrow the gap?

§ Mr. Clark
That is a completely different subject from the multi-fibre arrangement. Trade with the EC is not governed by it. Competition, measured in terms of delivery, quality, price and so on, is the yardstick. There are elements where Government subsidy is present. Those are subject to Commission scrutiny. If any hon. Member advises me of cases where EC subsidies affect the balance of competition, we will immediately consider them closely.