§ Mr. Brazier
To ask the President of the Board of Trade if he will make a statement on state aids available to Turkish companies for the import of ferrous scrap from the European Union.
§ Mr. Sainsbury
The Government recognise the problems caused by high scrap prices and have been closely monitoring developments in consultation with the United Kingdom steel and foundry industries. Through this we became aware of concerns regarding the existence of subsidies available in Turkey for the import of scrap from the EC and elsewhere. The matter was discussed between the European Commission and EU member states and a mandate was agreed whereby the Commission would raise the issue in bilateral contacts with Turkey. As a result, an undertaking has been secured from the Turkish Government to eliminate state aids, in the form of transport subsidies, for the import of ferrous scrap from the European Union. These aids currently stand at $15 for every tonne of this material imported from the Community.
The Turkish authorities will phase out the subsidy in three stages, commencing with a cut of one third as from 1 April 1994. A further reduction of one third will follow on 1 June leading up to final abolition on 1 October this year. We look forward to seeing formal written confirmation of this undertaking and will continue to watch developments closely.1004W
In addition, much investment is financed in, the country in which it takes place. The tables below show the annual capital flow for each year and also the book value of the assets, the stock of investment, which gives a more reliable indication of the amount of actual investment. Stock increases will not always match annual flows for the reason given above.
The figures are those issued by the investing country.
The Government welcome these steps as significant progress towards eliminating those practices which interfere with the proper operation of market forces in determining the level of world scrap prices.