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Customs Duties (Dumping and Subsidies)

Ways and Means – in the House of Commons at 12:00 am on 13th March 1968.

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11.30 p.m.

Photo of Mr Harold Lever Mr Harold Lever , Manchester Cheetham

I beg to move, That further provision should be made as regards duties of customs under the Customs Duties (Dumping and Subsidies) Act 1957—

  1. (1) so as to enable a provisional charge to duty to be imposed where there may be a case of dumping or subsidisation warranting a duty under the Act, and a duty to be imposed afterwards for the period of the provisional charge if it proves that there is such a case, and to deal with matters arising therefrom or incidental thereto; and
  2. (2) so as to replace section 1(1) proviso of the Act with other provisions relating to the General Agreement on Tariffs and Trade there mentioned; and
  3. (3) so as to modify the requirements of the Act as to the price which is to be treated as the fair market price of goods in a country; and
  4. (4) so as to facilitate the temporary suspension or variation of a duty and the revival of a suspended duty.
I hope that the House will be tolerant if I give a few words of explanation, as this matter is of some public importance and it would be as well to spell out what is intended.

In the Queen's Speech, the Government announced their intention to seek powers to take provisional action against dumping in accordance with the code which was agreed in the Kennedy Round of trade negotiations at Geneva. The Resolution is intended to prepare the way for a Bill to amend the present Customs Duties (Dumping and Subsidies) Act, 1957, so as to give the Board of Trade powers to take provisional action. Although the object of the Bill is not to raise revenue and it has no major revenue implication, a Ways and Means Resolution is necessary because the Bill, which has the full support of the Chancellor of the Exchequer, will, in form, impose a charge on the subject. My hon. Friend the Parliamentary Secretary to the Board of Trade will be ready to answer any policy questions which may be raised within the ambit of the Resolution.

The Kennedy Round anti-dumping code to which I have referred was an agreement reached last year on the implementation of Article 6 of the G.A.T.T., and it deals with measures against dumping or subsidised goods. The code comes into force on 1st July next for each party which has accepted it by that date. Our own practice and procedures are already very much in line with the provisions of the code, but we are now anxious to implement fully all the provisions of the code because we believe that it will be of considerable help to British exporters.

I do not want to enter into all the details of the provisions which we shall be seeking. A comprehensive debate should await the Bill, when it has been printed and has been made available to the House for study. I would, however, like to say a little about the way in which we propose to take provisional action.

At the moment, no extra duty to counteract dumping can be levied by the Customs until the Board of Trade is fully satisfied that dumping is in fact taking place, and the necessary inquiries for the Board of Trade to become so satisfied are bound to take a little time. The intention in the future is to allow the imposition of a provisional charge where there is a prima facie case of dumping. This charge is fully in line with the antidumping code.

It will be immediately apparent that this method will provide some extra protection for British manufacturers. To spell out the procedure a little, there will, in the first instance, be a preliminary finding by the Board of Trade of dumping or subsidisation and, where appropriate, of material injury being caused or threatened thereby to the relevant British interests. The Board of Trade will then be empowered to make a preliminary order imposing a provisional charge to duty equal to the estimated margin of dumping or subsidisation. In accordance with the provisions of the code, the order would last for three months, although it would sometimes be extended, in ways not contrary to the code, to six months.

The importer of goods under investigation will be able to meet the provisional charge by giving security for that amount, and this will normally be by depositing cash.

Effectively, the importer of the goods would be giving security in cash for any duty that might be found to be justified under the terms of the Bill after the full investigation is completed. No such duty could be levied prior to the date on which the provisional charge commenced, nor could it be higher in amount than the provisional charge. Thus, there would be no real element of retrospection, since the importer would already know of the provisional charge and would indeed have been required to put down security for it. This security would be used to discharge any duty that might be levied and no additional payment would be required. If no duty were levied the deposit would be refunded, or if the duty were less than the provisional charge it would be refunded in part. Existing provisions for relief from antidumping duty, for example, the power to allow drawback, would be applied equally to a provisional charge.

I think that I have summarised the purposes of the Bill that we propose to bring in, and I hope that the House will accept the Motion so that the Bill can be brought in as soon as possible.

11.36 p.m.

Photo of Mr John Temple Mr John Temple , City of Chester

On behalf of my hon. Friends I can say that we approve the principle of the Motion and shall do all that we can to give it a fair wind, although we shall have to look at the terms of the Bill closely when it is before the House.

I thank the Financial Secretary for his careful explanation of the Bill. It is entirely wise to look forward to the provisions of the Kennedy Round and to take this action now. It is none too early. Looking at the trade figures today we see an endorsement of the fact that exporters need all the help that they can be given.

I have picked out three points which I regard as being embraced by the Motion. First, it seems to me that the provisional charge will be a step forward, because so often in the past speedy action has been frightfully important, especially with regard to horticultural imports, or imports of a similar nature.

Secondly, the provisions of subsection (4), concerning temporary suspension or variation of the duty, will provide more flexibility, and I hope that the provisions of the Bill will fulfil the terms of the Motion. It is a sensible provision.

Leaving on one side the General Agreement on Tariffs and Trade, there is the reference to a fair market price. I have had a little experience of the great difficulties of determining a fair market price in countries of origin, especially in countries which are part of the Communist bloc. I hope that when the Bill is being prepared regard will be had to that factor, because it has been very difficult in calculating the correct levels of dumping and subsidies duties, to ascertain the prices of produce, especially in countries which are part of the Communist bloc, where calculations of price are not arrived at on the same basis as calculations in this country.

We shall look forward very much to the Bill. We expect to be able to give it our support. We want to reserve our position to an extent, but hope very much that the Bill will fulfil the terms of the Motion.

Question put and agreed to.

Resolved,That further provision should be made as regards duties of customs under the Customs Duties (Dumping and Subsidies) Act 1957—

  1. (1) so as to enable a provisional charge to be imposed where there may be a case of dumping or subsidisation warranting a duty under the Act, and a duty to be imposed afterwards for the period of the provisional charge if it proves that there is such a case, and to deal with matters arising therefrom or incidental thereto; and
  2. (2) so as to replace section 1(1) proviso of the Act with other provisions relating to the General Agreement on Tariffs and Trade there mentioned; and
  3. (3) so as to modify the requirements of the Act as to the price which is to be treated as a fair market price of goods in a country; and
  4. (4) so as to facilitate the temporary suspension or variation of a duty and the revival of a suspended duty.

Bill ordered to be brought in upon the Resolution by the Chairman of Ways and Means, Mr. Crosland, Mr. Ross, Mr. Shore, Mr. Peart, Mr. Marsh, Mr. Wedgwood Benn, Mr. Harold Lever, and Mrs. Dunwoody.