HC Deb 05 February 1990 vol 166 cc463-4W
Mr. Dunn

To ask the Secretary of State for Trade and Industry what obstacles remain to fair trade between the United Kingdom and the Empire of Japan; if he will list them and the action he intends to take to eliminate them; and if he will make a statement.

Mr. Redwood

[holding answer 30 January 1990]: The Government have three main trade policy objectives with Japan. The first is to persuade the Japanese authorities to implement structural reforms to sustain the shift in the balance of their economy from export-led to domestic demand-led growth. At the OECD ministerial meeting and the G7 summit last year, it was agreed that structural reform would play an important part in efforts to reduce current account imbalances. My right hon. Friend the Prime Minister, during her visit to Japan last year, emphasised the need to eliminate structural rigidities in key areas of the Japanese economy such as agricultural support and protection, land use and taxation and the distribution system.

Secondly, we must secure the removal of barriers to access to the Japanese market for United Kingdom exporters. Few such barriers remain. Where they do, the Government campaign vigorously for their removal through the appropriate channels: bilaterally, through the European Community, and through the multilateral GATT system.

The principal areas in which further progress is needed are: Leather and leather goods. Under the present tariff quota system, Community exports within a small quota attract duty of 20 to 27 per cent, and goods in excess of quota a duty of 60 per cent. Negotiations are in progress at Community level to secure improvements in access when the present EC-Japan agreement expires in 1991. Food products, particularly sugar confectionery, biscuits and jam, which still attract high tariffs (between 20 and 35 per cent.). GATT Ministers have agreed that such tariff peaks should be dealt with in the Uruguay round. Standards and testing requirements in sectors such as Pharmaceuticals, and medical equipment sectors. Regular EC-Japan sectoral talks provide the main forum for negotiations to eliminate non-tariff barriers of this sort. Financial services. British firms are looking for greater opportuities to participate in Japan's financial markets, particularly in the insurance and investment sectors.

The Government's approach has achieved significant results. Last April, for example, the Japanese Government removed discriminatory taxation on imported whisky; exports of Scotch to Japan in the first 11 months of 1989 show an increase of 75 per cent. in value compared with the same period in 1988.

Thirdly, we must ensure that the British business community is fully aware of the greatly increased opportunities in Japan, and of the strategic importance of the Japanese market. My Department's Opportunity Japan campaign was launched in 1988 to address this need. A target was set of doubling British exports to Japan in three years. The determined efforts of British exporters mean that we are well on the way to doing so: last year United Kingdom exports of goods to Japan increased by £525 million to £2.3 billion, an increase of 30 per cent. over 1988.