EXPORT SUBSIDIES (Hansard, 25 October 1955)

§ THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR THE HOME DEPARTMENT (LORD MANCROFT)

Export subsidies are not prohibited by the General Agreement on 13WA Tariffs and Trade. The existing Agreement provides only for notification of subsidies and consultation about them with a view to their limitation where they are causing or threatening serious prejudice to the interests of other countries. The revised Agreement, when it comes into force, will, in additon, provide that contracting parties should seek to avoid the use of subsidies on the export of primary products and that if, nevertheless, they are granted on these products, they should not be so applied as to secure more than an equitable share of world export trade; and, in the case of industrial products, it will provide that contracting parties should not increase the scope of export subsidies beyond that existing on 1st January, 1955, and should cease granting such subsidies by 1st January, 1958, Of the earliest practicable date thereafter. In this connection, it is on record that it is the intention that the contracting parties should seek before the end of t957 to reach agreement to abolish all remaining subsidies on industrial products as from 1st January, 1958, or, failing this, the earliest date thereafter hat may be agreed.

France is not, therefore, in breach of the existing General Agreement in subsidising exports and, even when she assumes the obligations of the revised G.A.T.T., it may still be open to her, consistently with its provisions, to continue certain export subsidies. Her Majesty's Government are aware of the concern which is felt over the use of 14WA export subsidies by France and other countries. In the Review of the General Agreement they did everything possible, in conjunction with other Commonwealth countries, to secure agreement to stronger rules against their use, and the provisions of the revised G.A.T.T. represent a substantial advance. In other ways, too, Her Majesty's Government have directed all possible efforts to the same end. Following discussions between the Chancellor of the Exchequer and the German Minister of Economics, agreement with the Federal German Government about the removal of artificial aids to export was announced in June of last year; Her Majesty's Government were active in helping to promote the decision taken early this year in O.E.E.C. on export subsidies which, though not at present fully applicable to France, provides for review of her position later this year and, in the International Monetary Fund. when multiple currency practices and other uses of exchange restrictions are under review, the possibility that these may be so operated as to give unfair advantage to particular exports is one of the considerations Her Majesty's Government have particularly in mind. Her Majesty's Government will continue in the G.A.T.T., in the O E.E.C. and in all other ways that may offer, to press for effective limitation of the use of export subsidies.

House adjourned at ten minutes past three o'clock.