§ Mr. Dellasked the President of the Board of Trade if he is aware of the agreement between the United States of America and Canada, instituting free trade in cars and car parts between the two countries; what estimate he has made of the effect this agreement is likely to have on British exports; what are the regulations of the General Agreement on Tariffs and Trade on this subject; and whether he will make a statement.
§ Mr. RedheadMy right hon. Friend is aware of the agreement between the Governments of Canada and the United States of America, which provides for the removal of United States duties on Canadian made motor vehicles and original parts and for the granting tobona fide Canadian manufacturers of 299W motor vehicles rights to import vehicles and original parts free of duty from any source.
The agreement appears in some respects to be inconsistent with the General Agreement on Tariffs and Trade. I understand that the United States Government intend to seek a waiver from their obligations under Article I to the extent necessary to allow them to implement the agreement: this Article provides that any advantage given by a contracting party to the General Agreement to a product of any country should be accorded to like products of all other contracting parties.
300WImports from the United Kingdom of vehicles and most components will continue to enter Canada duty free, but the effect of the scheme will be to eliminate over a wide field the non-contractual margins of preference which we have hitherto enjoyed.
My right hon. Friend is in consultation with the Society of Motor Manufacturers and Traders on the effect which the agreement is likely to have on United Kingdom exports. He has expressed to the Governments of Canada and of the United States his concern about the agreement and its possible effects.