Cashmere Knitwear (Hansard, 23 February 1999)

§ 1. Mr. Archy Kirkwood (Roxburgh and Berwickshire)
If he will meet representatives of the Scottish Cashmere Association to discuss current difficulties facing exporters of cashmere knitwear; and if he will make a statement. [70818]

§ The Parliamentary Under-Secretary of State for Scotland (Mr. Calum Macdonald)
The Scottish Cashmere Association and the Scottish Borders Studio are providing regular briefing on the problem facing the cashmere industry as a consequence of the current banana dispute, and my right hon. Friend the Secretary of State and his Cabinet colleagues are keeping fully in touch with the situation. The Government are doing everything possible through the European Union to solve this very serious problem, with discussions at the highest levels.

§ Mr. Kirkwood
Is the Minister aware of the extent of the fear and apprehension felt by cashmere manufacturers at the prospect of 100 per cent. penal tariff duties being imposed on 3 March on cashmere jerseys exported from Scotland to the United States? Unless the threat is removed, hundreds and hundreds of jobs will be lost in south-east Scotland, in addition to the recent losses, as a direct consequence of the American action. Will the Minister redouble his efforts to ensure that a settlement is reached? Will he and the Secretary of State consider using their access to the Prime Minister to try to persuade him to use his good offices and credit with the President of the United States to try to get the threat removed as soon as possible?

§ Mr. Macdonald
I agree with everything that the hon. Gentleman said about the unfairness of the threat to the cashmere industry. The Government are working with our European partners to try to bring about a positive resolution. We especially deplore the threat to introduce duties in March. The World Trade Organisation has set up a panel to try to adjudicate in the dispute; it is not expected to report until April, and no action should be considered until that has happened, but the Government will certainly continue working with our European partners.

§ Mrs. Margaret Ewing (Moray)
I believe that everyone in the House would appreciate the deep 162 concerns about the implications for the borders, with the concentration of the cashmere industry in that area, but is it not also true that there is an impact elsewhere in the Scottish economy, including in the north-east, where we also have a cashmere industry and the food processing industry is equally under threat? Companies are trying to make their way into the 1999 Christmas market in the United States of America, so it is important that any conflict that affects them negatively is lifted. Will the Minister do everything that he can, not only for the cashmere industry, but for all the industries affected?

§ Mr. Macdonald
I absolutely agree that it is equally unfair that the dispute should impact on other industries, not only in Scotland but throughout the United Kingdom and the whole of Europe. That is why we are taking the situation so seriously and are working so hard with our European partners to try to encourage a more rational approach from the American Administration so that we can resolve the dispute.

§ Dr. Liam Fox (Woodspring)
The whole House will be aware that the dispute is serious, not only for cashmere, but in a wider trading context. The Minister spoke about our European partners. What contacts has he made directly with his counterparts in the United States, and what contacts has the Prime Minister made with President Clinton on this serious subject?

§ Mr. Macdonald
As the hon. Gentleman is aware, we are working closely with our European partners. This is a matter in which European member states have to deal collectively with the US Administration, who are in no doubt about the British Government's views and the seriousness with which we take the issue.

§ Dr. Fox
Has or has not the Prime Minister made direct contact with President Clinton on the subject? We hear a great deal, time and again, about the closeness of their relationship. When President Clinton was in personal trouble, the Prime Minister was there to help him out of the situation. It is not unreasonable to expect our Prime Minister to intervene directly with the President of the United States on an issue that affects an important industry and may have ramifications for other industries in a wider trading context.

§ Mr. Macdonald
The hon. Gentleman is a noted anti-European, so it is understandable that he does not like the fact that we are working with our European partners to try to resolve the dispute, which affects not only the United Kingdom, but other European Union countries. The only way of resolving it is through direct discussions between the European Union and the American Administration, under the auspices of the World Trade Organisation.

§ Mr. Menzies Campbell (North-East Fife)
What does the Minister think would have happened if the United Kingdom had joined the North American Free Trade Agreement, as Conservative Members urged? Is he aware that United States companies have 78 per cent. of the European banana market, compared with the Caribbean's 9 per cent., and that none of the bananas about which 163 there is a dispute are actually grown in the United States? What does that make him think about the reasonableness of the position adopted by the Americans?

§ Mr. Macdonald
The right hon. and learned Gentleman makes a fair point. The European Union banana regime is designed to comply with the World Trade Organisation regulations while honouring our commitments to those countries in Africa, the Pacific and the Caribbean with which we have relations through the Lomé agreement. We stand by those commitments.