HC Deb 30 June 1971 vol 820 cc152-4W
Mr. Normanton

asked the Secretary of State for Trade and Industry what progress he has made in the necessary discussions with other Governments to enable the tariff to be imposed on cotton textiles imported from the Commonwealth Preference Area on 1st January, 1972.

Mr. Noble

Discussions have been satisfactorily concluded or are on the way to conclusion with all countries with rights to free entry except in the case of India.

It has been recognised from the outset that the replacement of quotas by a tariff might adversely affect Indian exports to this country, and in the statement made by the then President of the Board of Trade on 22nd July, 1969, the Government undertook, when the time came to determine the level of aid to India after 1972, to take into account, against the background of India's general aid requirements at that time, any adverse effects on her exports arising from the tariff.

In the discussions with the Government of India regarding our request, under Article 15 of the Trade Agreement, for the necessary modification of our trading agreement obligations on cotton textiles, we have offered, in lieu of this contingent aid, an immediate additional £10 million of aid, to assist with problems of adjustment which the imposition of the tariff may create.

Despite this improvement upon our original offer, the Government of India have not been able to agree to our request for a waiver. In order to be free to introduce the tariff on 1st January, 1972, we have accordingly today been compelled to exercise our right under Article 16 of the trade agreement to give six months' notice of its termination. We have taken this step with the greatest reluctance in view of the co-operation we have received in the past from the Government of India and the Indian cotton industry over exports of cotton textiles to our market. If during the six months' notice period the Government of India should wish to reconsider their refusal to grant a waiver, we should, of course, be willing to withdraw the notice of termination and allow the agreement to remain in force.

If the agreement is terminated we should lose the right under it to be granted tariff preferences of limited and diminishing value on certain products in India.

Subject to changes required by accession to the E.E.C. we have no present intention of making changes in our tariff treatment of imports from India other than cotton textiles.