Textile, Clothing and Footwear Industries

Part of the debate – in the House of Commons at 12:00 am on 6th August 1975.

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Photo of Mr Eric Deakins Mr Eric Deakins , Waltham Forest Walthamstow 12:00 am, 6th August 1975

I beg my right hon. Friend's pardon. The Prime Minister explained on 23rd May that we had decided against the industry's proposal for a unilateral, across-the-board cut of 20 per cent. on the 1974 level of textile imports. There has been some reluctance to accept the position, to put it mildly, and pressure on the Government to impose import controls is building up again, not merely from my hon. Friends, but from the Opposition side. I shall be interested to see how long it will be before the official Opposition are asking for these controls.

It might help if I briefly reiterate the main arguments against either selective or across-the-board import controls. My remarks apply not merely to textile but to many other industries. A first and obvious point is that they would be a very blunt and inflexible instrument. In some sectors cuts would be totally inappropriate and harmful to domestic interests. Many firms which rely on semi-processed imported materials would face supply problems, and the consequence would be a further loss of employment.

Secondly, textile imports have been declining as part of the world recession, and this downward trend had begun well before the British Textile Confederation made its proposal early in March. So far this year the volume of imports has been well down on last year. In some sectors the fall has been even greater than the 20 per cent. demanded by the BTC. If we had adopted the BTC proposals in March the overall volume of imports would not have been greatly lower than they were anyway in the first six months of this year, and the consequential benefit to employment would have been correspondingly small. Furthermore, import restrictions could well undermine progress which we hope will be made in the GATT mutilateral trade negotiations which are currently going on. It is in our interests to get trading nations to case trading barriers, especially the non-tariff barriers which many of our industries claim are keeping their exports out of certain overseas countries, and surely GATT is the best mechanism for doing that.

As a major trading nation we must have regard to our international obligations especially the provisions of the GATT relating to import controls under Articles XII and XIX. The first of these articles allows the use of quantitative restrictions to safeguard the balance of payments. It is intended to cover general measures to meet a balance of payments crisis, and we should need, if we adopted action under this article, to impose a general pattern of import controls, not merely controls over textile imports. We could not possibly invoke Article XII in justification of selective controls intended to protect employment in a particular industry.

The appropriate article for that purpose is Article XIX. That enables the imposition of temporary quantitative restrictions on a non-discriminatory basis—no one has argued that it should not be non-discriminatory—if increased quantities of imports are causing or threatening serious injury to domestic production. Obviously there would be difficulties and disadvantages in having recourse to Article XIX. The first problem facing our textile and clothing industries is not that stated in Article XIX. The condition that difficulty must be created by increased quantities of imports is not met.

A second serious disadvantage to having recourse to Article XIX is that it would undermine the Multi-Fibre Arrangement. If at the beginning of the life of this arrangement a country such as the United Kingdom, with a major stake in textiles, were to step outside the framework, others which had accepted its obligations would feel cheated and the balance of interests which it represents would be destroyed.

There would be retaliation. I do not share the optimism of many of my hon. Friends that there would not be. There has been retaliation from Turkey. There have been many examples of retaliation between one industrial country and another, not merely over textiles. The chicken war between the United States and the EEC a few years ago is an example.

General textile import controls would affect both developing and developed countries. If we restricted imports from developed countries they could retaliate and affect most seriously and adversely our export performance. It is with those countries where we have a favourable—