§ Mr. Michael Morrisasked the Secretary of State for Trade which are the 13 sensitive industries in the European Economic Community which are protected by tariff quota.
§ Mr. Clinton DavisUnder the European Community's Generalised Scheme of Preferences, access concessions on 13 "sensitive" industrial products—in addition to textiles and certain ECSC products—are subject to tariff quotas. These are: amino acids; bovine cattle leather; plastic travel goods; travel goods of other materials; leather clothing; plywood; plastic footwear; leather footwear; other footwear of plastic or rubber; radio and television transmitters, receivers and parts: diodes, transistors and parts; chairs and other seats; and other furniture and parts.
§ Mr. Sandelsonasked the Secretary of State for Trade if he will make a statement on the provision of finance on credit terms of two years or more for exports to member States of the European Community.
§ Mr. MeacherHitherto finance has been made available at fixed rates of interest by the banks with the support of the Export Credits Guarantee Department—ECGD—for all exports on credit terms of two years or more. The Commission of the EEC has now drawn the attention of Her Majesty's Government to the fact that in so far as these arrangements relate to exports to other members of the Community, they are in contravention of the Treaty of Rome and it has therefore been agreed that they shall be withdrawn in356W respect of the generality of exports to the EEC. About 1 per cent. of total United Kingdom exports to the Community are affected. It has however been agreed with the Commission that the fixed rate arrangements may be continued in respect of sales of ships, which are governed by a separate OECD agreement, and that similar exceptions may be considered on a case by case basis after discussion with the Commission for other business, for example European aircraft and aeroengine projects.
Accordingly, although ECGD will continue to give its full guarantees in respect of finance to the EEC, no new offers of finance at officially supported fixed rates will be made from 1st April 1978 unless the business falls within the terms of agreed exceptions. Under ECGD guarantees the banks will assist exporters to make the best commercial arrangements possible as regards rates of interest for financing EEC trade, and to give exporters maximum flexibility in making arrangements with the banks ECGD will no longer require any category of exports to the EEC to be financed in foreign currency rather than sterling. With this added flexibility it may be possible to provide medium-term fixed-rate finance at commercial rates in some instances. Where fixed rates are not possible finance will be made available at a variable rate of interest at a margin over LIBOR. For sterling lending this will not normally exceed 1¼ per cent. over the three-month rate and for lending in foreign currencies the margin above LIBOR will continue to be negotiated on a case by case basis.