Multi-Fibre Arrangement (Hansard, 20 January 1986)

§ Viscount Trenchard
My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

§ The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth)
My Lords, we shall work for the renewal of an effective multi-fibre arrangement which takes account of the need of the United Kingdom textile industry and of the British economy as a whole.

§ Viscount Trenchard
My Lords, I thank my noble friend for that Answer. Is he aware of the actual terms used by President Reagan on 17th December; namely, to, most aggressively renegotiate the multi-fibre arrangement on terms no less favourable than at present"? Is he further aware—

Noble Lords
Reading!

A Noble Lord
He is allowed to read quotations!

§ Viscount Trenchard
My Lords, is my noble friend also aware that the United States still imposes a 40 per cent. tariff on woollen exports from this country to the United States? Is he further aware—

§ Lord Denham
No—too long!

§ Viscount Trenchard
—that the newly-industrialised countries continue to protect strongly or totally their own markets? Will he accept the need for a fair trading opportunity—

§ Lord Denham
No!

§ Viscount Trenchard
—internationally for our half-million-strong textile industry?

§ Lord Lucas of Chilworth
My Lords, encapsulating my noble friend's questions—which I am sure derive 10 from his knowledge of and interest in that industry as a Minister of State in the Department of Industry—a major aim of the United Kingdom for the new General Agreement on Trade and Tariffs round is to achieve a better balance of rights and obligations for all countries involved. In so far as a new multi-fibre arrangement is concerned, it would be our intention, while liberalising those arrangements, to ensure that our own textile industry—which has done so very well in recent years—is not unduly disadvantaged.

§ Lord Rhodes
My Lords, is the Minister aware that any relaxation in our negotiations on the third multi-fibre arrangement will be reflected in the number of unemployed which ensues, and that we cannot afford to lose any more of our textile trade?

§ Lord Lucas of Chilworth
My Lords, we do not believe that in making a new multi-fibre arrangement the textile industry of this country will be disadvantaged. The intention in coming to a new arrangement is to ensure that there is sufficient time for that industry to meet the increasing competition that there is across the world.

§ Lord Bruce-Gardyne
My Lords, is there not a certain amount of evidence to suggest that the multi-fibre agreement is for the consumer an extremely expensive way of preserving the jobs which it is supposed to preserve? Has my noble friend studied this evidence?

§ Lord Lucas of Chilworth
My Lords, it is not an agreement but an arrangement. The arrangement is unduly expensive towards the consumer. As I said earlier, a new arrangement will seek to ensure that the trade is liberalised so that the consumer will be advantaged, but not to the gross disadvantage of the industry, which has been singularly successful in recent years.

§ Baroness Seear
My Lords, could the Minister explain to us how, in the process of renegotiating the multi-fibre agreement, they intend to safeguard the position of the developing countries, which are also a very good market for us in the future?

§ Lord Lucas of Chilworth
My Lords, as I explained earlier, we are anticipating, through the new GATT round, a better arrangement of responsibilities and obligations. It will be under that umbrella of increased and improved responsibilities and obligations that a new multi-fibre arrangement can be negotiated.

Lord Bruce of Donington
My Lords, will the noble Lord explain how the Government propose in the course of these negotiations to deal with the situation arising from the subsidised importation from Taiwan and Hong Kong of goods that are very heavily subsidised by their respective Governments? How does the noble Lord propose to deal with that? Does he propose to leave the English textile industry at the mercy of these quite heavily subsidised imports into the United Kingdom?

§ Lord Lucas of Chilworth
My Lords, I think I answered that question when I said that the new 11 GATT round, under whose umbrella the multi-fibre arrangements are negotiated, will be designed, and it will be our objective, to ensure that there is a better balance of rights and obligations. Those are the rights and the obligations to which the noble Lord refers.

§ Lord Rhodes
My Lords, is the Minister aware that any textiles diverted from America will find a home in Europe? That means that we shall be very vulnerable if that takes place.

§ Lord Lucas of Chilworth
My Lords, I do indeed recognise the vulnerability of the industry. However, let me remind your Lordships that in the first nine months of 1985 the textile and clothing industry exports to the United States were over 34 per cent. higher than in the same period the previous year. That is indeed a successful counter to the implied criticism which the noble Lord makes.

§ Lord Williams of Elvel
My Lords, are we to understand in this latest instance of Government intervention in the markets that a European solution is to be favoured over an American solution?

§ Lord Lucas of Chilworth
My Lords, the noble Lord (it is Lord Williams, in case the noble Lord thought that I had failed to remember his name) will recall that our interests in these matters are conducted with us by our Community partners. Our Community policies will be determined in Europe by ourselves, and not by Washington.

Lord Oram
My Lords, does the noble Lord understand from his noble friend who asked this Question that the word "strong" in that Question meant a strong multi-fibre arrangement on behalf of our textile industry? Indeed, that was implied, was it not, in the supplementary question by the noble Viscount? But would the noble Lord appreciate that there is another partner in this matter, as indicated by the noble Baroness, Lady Seear; that is, the developing countries, who also need strong support? Will the noble Lord recognise that as to the use of the word "effective" in his original Answer and of the word "balance" in subsequent answers, these are words which are welcome to those of us who are concerned with the welfare of the developing countries?

§ Lord Lucas of Chilworth
My Lords, I am grateful to the noble Lord for his question, and I think I am in broad agreement with him.

§ Lord MacLehose of Beoch
My Lords, in view of the question asked by the noble Lord, Lord Bruce of Donington, would the Minister confirm that there is no question of subsidisation of Hong Kong exports and that, indeed, since that market is entirely free for British and other exports, it should be treated quite differently from protected markets?

§ Lord Lucas of Chilworth
My Lords, as I think your Lordships will know, the Hong Kong market is the most liberal of all markets and one must ensure that that remains so. It may be necessary, of course, to ensure that we make our markets as liberal as we can to those who respond with us in matters of this nature.