HL Deb 30 January 2002 vol 631 cc207-10

2.37 p.m.

Lord Brookman asked Her Majesty's Government:

What steps they have taken to alert the United States administration to the impact which their proposed trade action on steel products could have on the United Kingdom steel industry.

The Minister for Trade (Baroness Symons of Vernham Dean)

My Lords, this issue has been raised with the United States administration on numerous occasions by myself, my ministerial colleagues in the Department of Trade and Industry and other government departments and by officials here and in the British Embassy in Washington. We have made it clear to the United States that measures such as those proposed by the United States International Trade Commission would be inappropriate and highly damaging. In our view, steel trade issues such as global over-capacity should be addressed through multilateral discussions.

Lord Brookman

My Lords, I thank my noble friend the Minister for that very proper Answer. My noble friend and the whole House will be aware that the UK steel industry has once again gone through an extremely difficult period, with closures, tens of thousands of job losses and, of course, the tragic loss of lives and terrible injuries sustained at the Port Talbot steelworks. I am sure that my noble friend and the whole House would wish to send their sympathies to those in South Wales who have been affected by that terrible tragedy.

My concern, on which I should like the Minister to assist, is that if America introduced protectionist policies, steel that would normally go to America would have to find a different home. Some of that would land on the UK's shores and be dumped at low prices. That would have a terrible effect on the steel industry. The problem that we face is that the European Union takes two to two and a half years to deal with such measures, while America takes two or three months. Will she use her good offices to assist steel employers in that matter?

Baroness Symons of Vernham Dean

My Lords, of course I join my noble friend in expressing sympathy to those affected by the tragedy in South Wales. My noble friend points out that there may be some difficulties because of what I can only describe as trade diversion from the United States to Europe in general and to the United Kingdom in particular. It is very difficult to quantify that diversion—or dumping, as my noble friend called it.

The real difficulty is that we do not know what the President of the United States is going to say about the International Trade Commission's recommendations. He may decide to set them all on one side; he may decide to accept them in full, which would have a devastating effect; he may decide to implement them partially; or he may decide to implement some totally different measures. We have to judge how we should react as a country and through the EU at that stage. I assure my noble friend that neither I nor any of my colleagues with ministerial responsibility for the issue have lost any opportunity to make our feelings felt about it. I hope that my noble friend knows that the Prime Minister has already said that he may be willing to intervene at a later stage.

Lord Razzall

My Lords, following up on that point, does the noble Baroness agree that, in the light of the strong support given to the United States over the war against terror and the close relationship that has presumably developed between the Prime Minister and the President of the United States on Afghan and terror-related matters, this is an occasion on which the Prime Minister could put in his notional diplomatic bag in his discussions with the President of the United States the trade issues relating to steel products and the impact on the steel industry? Will she confirm that the Prime Minister will do that?

Baroness Symons of Vernham Dean

My Lords. I agree with the noble Lord. I am bound to say that I have made almost exactly the same points when dealing with my United States counterparts. We are trying to change the way in which international relations work. It seems a retrograde step to be looking at what I can only describe as a good old fashioned trade battle. I hope that we shall be able to resolve the dispute without resorting to the WTO, although that is clearly a possibility if the United States Government decide to go ahead with some of the recommendations. I repeat that my right honourable friend the Prime Minister has written to Sir Brian Moffat and indicated that he may be willing to intervene on the issue when he judges the moment to be right for such intervention to have the greatest effect with the United States.

Lord Rotherwick

My Lords, does the Minister agree that the United States Government's current actions are not "inappropriate", as she described them, but protectionist, as were their actions when addressing the issue of bananas and of Kashmir cloth? Is she optimistic that the countermeasures being proposed by the European Union will resolve the issue?

Baroness Symons of Vernham Dean

My Lords, I think that we have to be clear that the United States has not as yet taken any action. The United States International Trade Commission has made certain recommendations to the United States President, and it is now down to him to take the decision, which he must do by 6th March. A decision is therefore imminent. I can only reiterate that we shall do everything we can—including bilaterally, as my colleagues in this House and in another place have been doing—to dissuade the United States. The noble Lord has asked me whether I am optimistic. I am afraid that, in this issue, I am being realistic. I agree with him that, should the United States pursue the path that it seems all too sadly to have chosen, it will be highly damaging to steel not only in this country but among our European partners.

Lord Jones

My Lords, will my noble friend say what the Government have done to help the 4,000 steel workers who lost their jobs last year in Britain? Is it the Government's view that entry to the euro currency would assist the British steel industry in its very real difficulties?

Baroness Symons of Vernham Dean

My Lords, on the last question, as I am sure my noble friend is aware, such an assessment will be part of one of the tests that, as we all know, will be a matter for decision initially for the Treasury, then for Parliament, and then for the people of this country. My noble friend asked specifically about what the Government have done to try to help the steel industry. Since October 2001, we have had an enormous number of meetings on the subject. If I may, I shall write to him on that specific point. The Question itself is on exports. Although I agree that the point he has raised is important, if he would like specific answers, perhaps he will forgive me if I write to him and place a copy of the letter in the Library.

Lord Paul

My Lords, I declare an interest as someone in the steel industry. The United States has been preaching to the whole world on the issue of free trade, in the WTO and in other organisations, but now it is taking the first step backward. Why have we not protested at an international level about that?

Baroness Symons of Vernham Dean

My Lords, we have protested very vigorously to the United States. I myself have protested very vigorously to Ambassador Zoellick, to others in the United States trade administration and to our colleagues in the State Department. I believe that the real issue is one of overcapacity in the United States steel industry. As many noble Lords will know, we in this country have undergone a very painful and difficult time in reducing our steel capacity and making the industry more efficient. We do not believe that quite the same diligence has been forthcoming in the United State on the issue. It is most regrettable that the United States should now be even considering these types of protectionist measures. We believe, however, that the way of solving it is through the multilateral means offered by the OECD and a number of other countries which together represent 98 per cent of the world-wide steel capacity. That is where the United States should be concentrating its efforts.