New Clause. — (Dumping and Subsidies.)

Orders of the Day — European Free Trade Association Bill – in the House of Commons at 12:00 am on 22nd February 1960.

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(1) If the Board of Trade receive notice from, or from any department of, the Government of any country included in the Convention area to the effect—

  1. (a) that goods of any description specified in the notice are being or have been imported into the United Kingdom in circumstances in which it appears that they may, under the provisions of the Customs Duties (Dumping and Subsidies) Act, 1957, be regarded as having been dumped, or
  2. (b) that some Government or other authority outside the United Kingdom appears to have been giving a subsidy within the meaning of the said Act of 1957, affecting goods of any description so specified which are being or have been imported into the United Kingdom,
and in either case that the effect of the dumping or the giving of the subsidy is such as to cause or threaten material injury to an established industry in that country, the Board shall forthwith investigate the circumstances of the case, and if it appears to them that the goods are to be so regarded or, as the case may be, that a subsidy affecting the goods has been given as aforesaid, shall exercise the power conferred on them by the said Act of 1957 to impose or vary duties of customs in such manner as they think necessary to meet the dumping or the giving of the subsidy.

(2) Every such notice as aforesaid shall for the purposes of the said Act of 1957 be prima facie evidence of the facts stated therein, being facts relevant to the determination for the purposes of that Act of the export price from any country of goods of a description specified in the notice, or of the fair market price of any such goods in any country, or any other facts account of which is to be taken by the Board of Trade in investigating the case to which the notice relates.

(3) Where it appears to the Board of Trade that goods of any description are being or have been imported into any country in the Convention area in circumstances in which the Government of or any other authority in that country has power corresponding to the power of the Board under the said Act of 1957 to impose or vary duties of customs in relation to goods of that description, and that the effect of the importation in the circumstances in question is such as to cause or threaten material injury to an established industry in the United Kingdom, the Board shall give notice to that effect to the said Government or authority stating such relevant facts as appear to the Board to be established and shall request the exercise of that power.—[Mr. Rhodes.]

Brought up, and read the First time.

Photo of Mr Hervey Rhodes Mr Hervey Rhodes , Ashton-under-Lyne

I beg to move, That the Clause be read a Second time.

My hon. Friends and I have tried not to put new obstacles in the way of trade. We have appreciated the Government's efforts to make it possible for the Commonwealth to share in future trade and our attitude has been shared by many industries vitally affected by these provisions. Industries like the wool industry and the man-made fibres industry, to mention two out of many, have made their contributions of suggestions and help in the negotiations on this subject, although they may be disappointed with the outcome of many decisions. The Board of Trade has received much solid assistance from those sections of the textile industry.

However, one aspect of the matter is causing much concern. We have experienced imports coming from low wage countries and with a suspicion of dumping about them and we have seen action quickly taken by the textile industry for the benefit of one of its sections. We have seen large sums of money poured out to help private sectors of the industry. We are all aware of what can happen. The new Clause is designed to prevent some of those things happening and I hope that it will get a sympathetic hearing from the Board of Trade.

Article 17 (3) of the E.F.T.A. Convention provides for a member country to complain if damage is caused or threatened to one of its industries as a result of dumping into another member country by a third party. In those circumstances, members are required merely to examine the possibility of taking action. I want the Government to consider those possibilities.

The United Kingdom anti-dumping legislation of 1957 was widely drawn and would permit action in those circumstances, but that legislation does not apply to the other six member countries. We are the only country with powers wide enough to permit one member country to complain if damage is caused or threatened to one of its industries and for action to be taken.

This is a serious matter, because there is a wide disparity in the conditions under which the other six member countries operate. Portugal and Switzerland have no anti-dumping legislation. Norway, Sweden and Austria have no anti-dumping legislation. Norway, Sweden and Austria have no powers wide enough for that Article to be implemented. I understand that the Danes are now taking powers to cope with dumping of a domestic kind, the dumping of goods into Denmark itself. They are not taking powers which are sufficiently wide to be compared with those which we have.

8.0 p.m.

If the legislation is not amended, or we are not helped in this matter, it will be possible for the Danes to ask us to take action over goods or raw materials coming into Liverpool bound for Copenhagen, but it will not be possible, under the powers which will be possessed by the Danes, for us to request them to take action regarding raw materials or goods of a semi-manufactured character coming to Denmark to be shipped here. I think that that is unfair and I ask the Minister to give us a satisfactory answer on the subject.

The Clause as drafted is modest enough and I do not think that it is unacceptable by the Minister. I am trying to focus attention on the problem one stage back from the point at which dumped goods first enter the European Free Trade Area. We cannot hope for satisfaction or fairness unless this antidumping legislation is co-ordinated. I ask the acceptance of this Clause to make it possible for, at any rate, a discussion to take place on the possibility of introducing legislation by other members of the area which would be comparable with ours.

Subsection (1) spells out the provisions of the 1957 Act, its relation to the European Free Trade Area and its implications. I wish to draw particular attention to the provisions of subsection (3). We can complain to another member of the Free Trade Area in accordance with Article (3) of the Convention. Unless something like this is done, or unless the Minister will undertake to discuss with other members of the Free Trade Area the possibility of devising anti-dumping legislation which is uniform in its application, I feel that we shall be very unfairly treated. Industries, particularly the woollen and manmade fibre industries, have offered advice on this Convention and the Agreements under it and I think that it would help them to feel that the Government had their interests at heart if we could come to some arrangement of the kind which I am suggesting.

It may be that in its present form the Clause would prove inadequate for the purpose. If that be so, I ask for an assurance that the Government are prepared to meet the rest of the member countries and to discuss co-ordinated anti-dumping legislation in the area as a whole. I consider that a reasonable request which would be welcomed by all the industries that I have mentioned.

Photo of Mr Frederick Erroll Mr Frederick Erroll , Altrincham and Sale

The hon. Member for Ashton-under-Lyne (Mr. Rhodes) has been good enough to explain in detail his long and intricate but carefully prepared new Clause. Already, we have studied it most carefully, but his explanation has clarified one or two points on which I felt doubtful during our earlier studies of this interesting and ingenious Clause.

I must explain straight away that, as I see it, this new Clause, if accepted, would, in certain cases, compel the Board of Trade to go further in helping foreign industries than we might feel was justified. For that reason alone we feel that it would hardly be appropriate to accept the Clause. Clearly, it would be wrong that we should be compelled at the request of another member country to impose conditions in respect of dumping or subsidised imports which we should not impose at the request of a domestic industry. We consider that the present Act is wide enough to enable the Board of Trade to take action if overseas importers are threatened, or suffer material injury as a result of dumping by a third country, and that the powers we already possess are fully consistent with our obligations under the G.A.T.T.

I remind the hon. Gentleman that his Clause, as drafted, would fall foul of our obligations under the G.A.T.T. In Article VI there is a provision that an anti-dumping duty may not be imposed on imports from one G.A.T.T. country into another on account of injury to producers in a third G.A.T.T. country without the prior permission of the contracting parties. So that would be a further difficulty which would arise were his Clause accepted.

The hon. Gentleman referred to the last paragraph of Article 17 of the Convention. We feel that gives us all we require. It will enable us to make approaches to the country concerned. If I may quote from the article, the country concerned shall … examine the possibility of taking such action as is consistent with its international obligations to remedy the injury or prevent the threatened injury. In our opinion, that gives us all the opening we require. It will enable us to take up cases with our partners as appropriate. We would rather have this limited power than the wider power proposed by the hon. Gentleman because there may well be circumstances in which it would be more appropriate, having looked at all the relevant circumstances, for us not to take the matter up, as we should be compelled to do under the provisions of his Clause.

Interesting as is this new Clause—I appreciate the motives which prompted the hon. Gentleman to move it—I suggest that we should prefer not to be compelled to take action which might be embarrassing at times, but rather to rely upon the powers which we already possess.

Photo of Mr Hervey Rhodes Mr Hervey Rhodes , Ashton-under-Lyne

That may be so, but the Minister has not said how other countries to whom we may complain can do anything at all if there is no legislation in existence on which to take action. It is only because we had the Anti-Dumping Act on the Statute Book and they could appeal to us that we could do something. It was one of the major concepts in the speech introducing the Anti-Dumping Act of 1957 that it should be an example for the rest of Europe to follow. What is all this high talk? Surely, if it meant anything at all, or the Minister's remarks meant anything at all, it means that some efforts would be made to get anti-dumping legislation of a similar character on the Statute Book of other member nations in Europe.

I warn the Minister that it is a very serious matter and it should be tackled before further effort is made to obtain entrance to the Common Market. It is very serious, and I do not think that it is good enough for the Minister to think that he has any power at all in this matter under Section 3 of Article 17. It stands to common sense that if all the countries had the same code for dumping we would get action of a similar sort throughout the area.

May I ask what is the real objection to it? Can I drag out from the Government an undertaking that, at any rate, they will ask the member countries to sit down and consider what sort of co-ordinating legislation can be brought in? May I plead with the Minister to say something instead of evading the issue? Will he give an undertaking that he will take this matter up with the other member countries so that we can have some co-ordination on it?

Photo of Mr Frederick Erroll Mr Frederick Erroll , Altrincham and Sale

All that I would say to the hon. Gentleman tonight would be that the member countries are obviously fully aware of the complications in this field of legislation and that Article 17, which was agreed by them all, represents the best arrangement possible in the circumstances. As the member countries are aware of the complications in the matter. I am sure that the openings which we possess for making representations will enable further steps to be taken by individual member countries should that prove to be necessary.

Photo of Mr Hervey Rhodes Mr Hervey Rhodes , Ashton-under-Lyne

I am perfectly well aware that the member countries know what they are at. It would suit them down to the ground if they could get out of this without having comparable legislation with us. They have not the established textile industries of the nature that we have. So this is an open invitation for people to set up in those countries and take advantage of the situation in the import of semi-manufactured goods from whatever source, whether from Prato or the Far East or anywhere else. Unless we have some co-ordination in the sort of legislation with which we are dealing, they will not, in my opinion, be able to deal adequately with a request from this Government.

If there were anything in the argument that we needed an Anti-Dumping Act in 1957, surely, now we have arrived at this point where we are coming to an agreement—and rightly so—with the other six countries composing the Outer Seven, there is some justification in my plea that co-ordinated legislation on the basis of anti-dumping is absolutely necessary.

8.15 p.m.

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Halifax

I do not share the enthusiasm of the hon. Gentleman the Member for Ashton-under-Lyne (Mr. Rhodes) for this Clause, but I share his doubts about the antidumping legislation. May I plead with the Minister to give some undertaking that at the meetings of the countries which, I understand, take place from time to time it could be proposed to our partners in the Seven to have the same sort of legislation that we have already passed here?

I understand that the Government are hoping—and all of us who want to see freer trade are hoping—that the Seven can achieve by agreement something in the nature of the provisions laid down in the Treaty of Rome for the Six. By making that sort of agreement the eventual unity between the Six and the Seven will be made more easy.

I suggest that the hon. Gentleman has a very valid point that before giving way on any points which may arise in negotiations on these agreements we should try to press other countries to have the same sort of legislation that we have to protect us and our partners.

Photo of Mr Gilbert Mitchison Mr Gilbert Mitchison , Kettering

I should like to add my voice, too. I do not think that my hon. Friend the Member for Ashton-under-Lyne (Mr. Rhodes) put forward this Clause in this form as the be-all and end-all. The substance of what he was saying was to ask the Government to reconsider the whole question of dumping in view of the fact that the other countries concerned have not adequate anti-dumping legislation. What he sought from the Government was a simple undertaking that that would be done and that they would consult with the other partners?

I appreciate the right hon. Gentleman's difficulty. The right hon. Gentleman the President of the Board of Trade is at home and, like Socrates, or was it Euripides, thinking of high things. That is all very well, but he should, I suggest, be prepared to give an undertaking in the sense asked for. Let me point out one or two things about it. First, let us look at the Government's attitude to the context of the Convention. They have just been teased for recognising incompatibilities and refusing to do anything about them. If they take up that sort of line we would rather have some domestic legislation or domestic undertaking that bound the Government than the provisions in this Convention.

It seems to be a mater of high diplomacy and perhaps slightly more easy to avoid, but when one looks at Article 17, which is the dumping Article, I notice a difference between what my hon. Friend is asking for and what appears in that article. It is not a difference which has anything to do with G.A.T.T. but it has something to do with the Board of Trade. When we look at Article 17, the member State, the State that is causing the dumping, as it were, shall, at the request of the aggrieved member State, do what? … examine the possibility of taking such action as is consistent with its international obligations to remedy the injury or prevent the threatened injury. All that the suffering State has to do is to put it up to the member State to examine the matter.

In subsection (3) of this Clause—and this has something to do with the difference—the suggestion is that if this country is aggrieved the Board of Trade shall give notice to the other Government and shall request the exercise of the anti-dumping powers of that Government in so far as they exist. That is a more positive matter than simply saying, "We will look into it."

I agree that the Council might and probably would have power under Article 31—general consultation and complaints—to do something about this. I suggest to the Government that it is unreal and unfair to people in this country to leave a matter of this sort until an occasion for a complaint arises. It ought to have been discussed at an earlier stage. I do not know what discussion it had during the negotiations, whether it was pointed out to the other countries concerned that their domestic legislation was hardly sufficient for the purpose, or what they said. We have never been told that. It is being pointed out to the Government now, and I want them to look at the matter also from another point of view.

The Outer Seven—I suppose that I should say, in this connection, the Outer Six—are very different countries. Some of them have a high standard of living. Switzerland and Sweden are two of those countries, but, obviously, others have not. I believe that provisions have been put into the Convention which, in fact, recognise that the economic circumstances of Portugal are not so good as those of this country. When we get this sort of position, a tariff preference and reduction of tariffs in favour of what I might call commercial allies, and in one of those countries labour costs as we know—I need not even say "as is probable"—are much lower than they are in this country, the risks of dumping become rather serious.

If dumping takes place, if it is not stopped, if the Board of Trade does nothing about it, we may find we shall get unemployment in the textile areas of this country and we all know that the Government have had to pay very large sums to the cotton industry. I am not discussing the merits or demerits of that, but clearly the textile industries in particular need attention in connection with this Convention. In the light of what my hon. Friend the Member for Ashton-under-Lyne has said, and bearing in mind that he has had a lifelong experience of the woollen trade and knows as much about it as anyone in this Committee—quite probably a great deal more—the least the Government should do in the circumstances is to agree to discuss the matter and not leave it until we reach the stage of difficulty which I have described.

It reminds me of what used to happen about school milk. At one stage there was a great deal of difficulty about getting it provided, because the answer from the Conservative Party—I hope that it has reformed its ways since then—was "Oh, they are not ill." That is to say, children should be given insufficient milk until they are ill and then provided with more. We do not want to do that to school children nor the same kind of thing when dumping is feared. There is a case on the obvious probabilities here for giving the undertaking, the request for which was the substantial object of the Clause which has been proposed.

I hope that the hon. Gentleman will not be deterred by the contemplative absence of his right hon. Friend from promising my hon. Friend and the Committee to consult the other partners in this matter to see what can be done. It is too much to let this pass because it is rather late, or because the Clause is not in the language the Government would like, or for some other procedural reason. I hope that the hon. Gentleman will let the Committee know that he is giving that undertaking.

Mr. Eroll:

I recognise the sincerity with which their views have been put forward by the hon. Member for Ashton-under-Lyne (Mr. Rhodes) and my hon. Friend the Member for Halifax (Mr. Maurice Macmillan). Although I accept that one should not try to tie an hon. Member down too closely to the details of a draft new Clause, the fact is that, as drafted, the new Clause would make no difference at all to our power to induce other E.F.T.A. countries to pass anti-dumping legislation.

Our powers—or opportunities, if hon. Members prefer that word—rest elsewhere, namely, on Article 17, subsection (3), of the Convention, and that is what we are proposing to rely on. The Committee has rather suggested that that is not enough. I daresay that if we had been prepared to spend another year on working out the details of the Convention we might have been able to make rather more progress in the precise wording of Article 17, but it has to be recognised that we were anxious to get a move on with the signing of the Convention. It was clearly impossible to lay down precise rules to cover everything, but we feel the principle for which we stand is conceded in Article 17.

I accept that there are certain member countries whose anti-dumping legislation is either not as advanced as our own or may not exist at all yet, but I think it only fair to point out that our antidumping legislation is not so all embracing as the hon. Member for Ashton-under-Lyne might imagine, because the very example he quoted—dumped goods landing at Liverpool for onward transmission to Copenhagen—would not in fact be covered by our own anti-dumping legislation as it stands at present. Therefore, I hope he will see that this is a matter of some complexity and difficulty.

I have been asked if I can give an assurance. What I can say is that we shall take most careful note of all that has been said during this debate. We realise that this is a matter of complexity and one which may cause anxiety to certain trades or individual firms. We shall consider most carefully all that has been said and look at it with the care for which the present Government are well known.

Photo of Mr Gilbert Mitchison Mr Gilbert Mitchison , Kettering

Will the hon. Gentleman also bear in mind that this is a matter which may cause unemployment in this country?

Photo of Mr Frederick Erroll Mr Frederick Erroll , Altrincham and Sale

That, of course, will be one of the things we shall bear in mind.

Question put and negatived.

Bill reported, without Amendment.

8.28 p.m.

Photo of Mr Anthony Barber Mr Anthony Barber , Doncaster

I beg to move. That the Bill be now read the Third time.

Since my hon. Friend the Minister of State moved the Second Reading of this Bill a week ago, we have had full discussion on most of the essential matters of the Bill. If the new Association is to work both smoothly and fairly, there must be co-operation and mutual assistance between the several members. What this Bill does is to help the United Kingdom to play its full part.

There is only one brief word I wish to add on this occasion. I hope it will be helpful. It is about the further measures necessary to bring the provisions of the Convention into operation on 1st July. The reductions in protective duties will be made by Treasury orders under Section 1 of the Import Duties Act, 1958, and the origin regulations will be made by the Board of Trade under Clause 1 of this Bill. We hope to lay these before the House early in May. About the same time, the Customs and Excise and the Board of Trade will publish full information as to the procedure to be followed to claim the reduced rates of duty both for imports and exports. The House will see that there will be a period of nearly two months during which traders will be able to familiarise themselves with the details of the changes and so be able to make their plans to take full advantage of the opportunity of increased trade with our partners.

The Bill has made rapid progress through this House, and I think that the hon. and learned Member for Kettering (Mr. Mitchison) will agree with me that this is a good indication of the desire of all Members to see this venture put into operation and working smoothly. I commend the Bill to the House with the confidence that it will contribute to the benefit of our industry and commerce.

Photo of Mr Gilbert Mitchison Mr Gilbert Mitchison , Kettering

There is little that I can or, indeed, wish to say on the Third Reading of what is a machinery Bill. Second Reading was another matter. I should like to adopt what the Economic Secretary said at the end of Second Reading: … I repeat that the objective of the United Kingdom—and the objective, I am sure, of all our partners—remains the same: the establishment of a single European market including all the O.E.E.C. countries."—[OFFICIAL REPORT, 15th February, 1960; Vol. 617, c. 1026.] It is in the light of that objective that we have not voted against the Bill. However, I hope that we have given it some critical examination. There are still points outstanding, like the matter I raised on Second Reading concerning outwear, which will arise on the regulations. I welcome warmly Clause 7 (1) which states that any regulations made may be subject to annulment. We shall take the opportunity, if the Government do not meet our points, to raise other matters when the regulations are made.

I have had to deal with a matter which I found rather strange, and therefore I may be allowed to thank right hon. and hon. Members opposite for the child's guide which at times they have been good enough to give me. I have not always agreed with their conclusions. I have never agreed with their excuses, which I thought were a pretty poor show. However, we shall not divide against the Bill.

8.33 p.m.

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Halifax

I, too, want to welcome the Third Reading of the Bill, but I also want to make it clear that there are certain points about which I and, I think, many people in the North, particularly those in towns engaged in the textile trade, feel most unhappy. I think that I should be out of order on Third Reading to refer in any greater detail to my fears about the deflection of trade contained in some of the provisions of the Convention and the way in which the matter is dealt with in the Bill. I only hope that Clause 1 (3) contains sufficient powers to deal with these problems as they arise and, as the hon. and learned Member for Kettering (Mr. Mitchison) said, that we shall under Clause 7 have tme to pray against the Regulations if we do not like them.

Apart from the specific and special difficulties of the textile industry, I think that the Bill will be of great benefit to industry as a whole. I hope that the Government will not think me ungracious if I add one more word and hope that they, too, like many people outside the House, regard the Bill as a beginning and not as an end of their work towards European unity and European free trade.

8.34 p.m.

Photo of Mr Frederick Erroll Mr Frederick Erroll , Altrincham and Sale

We shall take careful note of what my hon. Friend the Member for Halifax (Mr. Maurice Macmillan) has said.

We appreciate the cordial way in which the hon. and learned Member for Kettering (Mr. Mitchison) has conducted the proceedings from his side of the Chamber. We accept in good part his allusions to the excuses which we make. He certainly did not give the impression of being a newcomer to the intricacies of this Bill. We have felt ourselves agreeably tested and look forward to the next round on some of the prayers.

Question put and agreed to.

Bill accordingly read the Third time and passed.