GATT

HC Deb 23 January 1991 vol 184 cc309-11

6. Mr. Lester

To ask the Secretary of State for Trade and Industry if he will make a statement on the progress of the Uruguay round of the GATT.

15. Mr. Brandon-Bravo

To ask the Secretary of State for Trade and Industry if he will make a statement on the likely results of a successful completion of the GATT negotiations.

Mr. Lilley

We continue to press for the early resumption of talks, as a successful Uruguay round would include fully for the first time agriculture, services, textiles, intellectual property and investment as well as significant reductions in tariffs, quotas and other barriers and improvements in disciplines and safeguards. Such an outcome would be highly beneficial for the United Kingdom and would provide a much-needed noninflationary stimulus to the world economy. Failure would mean a return to protectionism, trade wars and beggar-my-neighbour policies.

Mr. Lester

My right hon. Friend continues to press for a settlement of the Uruguay round. Although the House is now concentrating on the Gulf war, many of us are still concerned that the GATT round remains unresolved. Will my right hon. Friend confirm that the United States estimates that, by the end of the decade, non-inflationary growth in the world will amount to about $4 trillion? That would be of particular benefit not only to the United Kingdom but to many developing countries about which many of us are still deeply concerned.

Mr. Lilley

My hon. Friend is absolutely right. The United States has estimated that, in terms of reductions in tariffs alone, a successful round would produce an extra $4 trillion of income in the world by the end of the century. My hon. Friend is also absolutely right to point out the importance to third-world countries of a successful outcome to the Uruguay round as those countries, more than any others, need an open and buoyant world trading environment.

Mr. Brandon-Bravo

My right hon. Friend will know that, before coming to this place, I spent my life in textiles and that I therefore have a deep interest in the outcome of GATT and in its effects on the multi-fibre arrangement and the textile industry. If there is a gap between agreement on GATT and the phasing out of the MFA, a dreadful vacuum will be created. Can my right hon. Friend reassure the textile industry about what he might do if such a vacuum were created?

Mr. Lilley

My hon. Friend is right to emphasise the importance for the textile industry, in his constituency and more widely, of a successful outcome to the round. Failure to agree would mean that the existing multi-fibre arrangement would lapse in July of this year. That would be unacceptable to us, to the industry and to the world and would lead to the necessity for other arrangements. It would be better by far to have a successful conclusion to the GATT round by the target date of 1 March.

Mr. James Lamond

Will the Secretary of State ensure that his remarks are conveyed to those negotiating on our behalf? He must have received the same anguished letters as we have from manufacturers who say that unless the GATT regulations are strengthened and enforced, doing away with the MFA will bring further problems for the textile industry, which is already very weak.

Mr. Lilley

The hon. Gentleman makes a good point. The embryonic agreement on textiles which would be available if we conclude the whole GATT round would result in a transitional phasing out of the MFA over 10 years, which would be more acceptable than its precipitate ending in July. We have done all in our power—and I continue to consult colleagues in the European Community, as well as in other countries with whom we established close relationships during the Brussels week of negotiations—to urge an early resumption of talks.

Mrs. Margaret Ewing

Can the Secretary of State tell us whether the Government are bringing forward specific proposals which might lead to the resumption of the talks, which are vital to all who represent constituencies not only with textile interests, where we see redundancy after redundancy, but with agricultural interests which are important to the rural community?

Mr. Lilley

The GATT negotiations are carried out by the European Commission on behalf of member states, so it is essential that the Commission should use its negotiating power to the full and that it should seek to get back to the negotiating table as rapidly as possible. We have pressed for that within the Community, as is widely recognised.

Mr. Dickens

I am afraid that I cannot speak with great volume today. The hon. Member for Oldham, Central and Royton (Mr. Lamond) was right in his plea for the textile industry in the north-west. The round of negotiations is critical for thousands of textile workers in the area. I implore my right hon. Friend to make sure that he gets it right.

Mr. Lilley

I never thought that I would have difficulty in hearing my hon. Friend. I entirely endorse his message that the industry is of great importance to the north-west. We are very concerned to ensure a proper settlement within GATT. There is the basis of an agreement which would be satisfactory, I think, to the textile industry; certainly it would be much more satisfactory than failure to agree.

Ms. Quin

Has the Secretary of State seen the widespread criticism in the press of the Government's stance on agriculture within the European Community? Is he aware that agriculture accounts for 1.5 per cent. of our GDP while manufacturing, construction and financial services account for over 50 per cent? Surely the Government can find ways to help agriculture that do not put in jeopardy the major part of the economy.

Mr. Lilley

I have not seen the widespread criticism. I recall the last Labour Prime Minister's son-in-law describing me as the hero of the GATT negotiations, but I do not think that that is what the hon. Lady was referring to. I have done all in my power, as have the whole Government, to bring about a successful conclusion to the talks, including success on the agricultural front.