Orders of the Day — Multilateral Trade Negotiations

Part of the debate – in the House of Commons at 12:00 am on 29th June 1979.

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Photo of Mr John Smith Mr John Smith , Lanarkshire North 12:00 am, 29th June 1979

The whole House is grateful to the Minister for his comprehensive report on the outcome of the multilateral trade negotiations. For a country like the United Kingdom, which exports one-third of its gross domestic product and imports about one-third, the rules of international trade are of special importance. It is often forgotten in this country that we export twice as much per head of population as Japan. That is not the popular impression in this country, mainly because the Japanese concentrate so much on certain sectoral areas of activity. These rules of international trade are tremendously important to us as one of the world's most important trading nations.

In approaching any assessment of the result of these negotiations, we must bear in mind the balance between our export interests and the natural concern of some of our domestic industries over the flow of imports. Particularly on tariff negotiations, one must evaluate the potential value of a cut in tariffs—for example, a cut made by the United States—as against the penalty that we have to pay by cutting our own tariffs. This is a matter of considerable debate and dispute in the textile industry, depending to some extent on whether one is concerned with the man-made fibre area or with woollens. On the whole, the tariff cuts are reasonably balanced, with one exception.

A great deal of disappointment has been expressed at the offer put forward by the Japanese Government. Unfortunately, that disappointment must remain. While Japan has such a substantial trade imbalance with the EEC, this country and many others, it is incumbent upon the Japanese to take steps to try to reduce the imbalance. One of these steps would be to liberalise their trade much more. They have made offers, but it is widely agreed that they are not yet wide enough. It is very difficult for our exporters, despite the excellent work of the Department of Trade with its specialised unit on Japan, to break into what is in many ways a closed market. This market is sometimes defended by custom and national attitude as much as by a particular tariff or non-tariff barrier. I think that we should agree that Japan has not made a significant enough contribution, as yet, to the liberalisation of world trade.

I pay tribute to the negotiators in the Department of Trade during the whole period of these multinational trade negotiations. The Minister said that they were unsung, and I think that that is true. These negotiations have not been in the forefront of public view. None the less, they have been extremely complex and demanding, involving negotiations within the European Community and negotiations outward from the Community, which in turn has involved all kinds of complex international negotiations, together with the close contact with many of the industries most affected by them. I have unstinted admiration for the work which was done and which I observed at close quarters during my period in the Department. The country owes a debt of gratitude to the skill and determination exhibited by the negotiators.

I mention also my right hon. Friend the Member for Stepney and Poplar (Mr. Shore) and Mr. Edmund Dell, both of whom played a very important part in bringing these negotiations forward and supervising them through the long period of gestation since the round was first announced. The Minister, very helpfully, put the various negotiations into different categories and I shall roughly follow the categories that he identified.

I think that the judgment must always, in relation to tariffs, be conditioned to some extent by the industrial interests involved. Major concern was expressed during the negotiations by the textile and paper industries in this country. We were able at the Council of Ministers meeting on 3 April to make significant progress with regard to the paper industry. The proposals initially put forward were substantially reduced and rephased, as a result largely of a spirited effort by the United Kingdom and French Governments. The French Government shared our concern over the paper industry, and I think that that important amendment was widely appreciated throughout the paper-making industry in Britain.

It is extremely important, on textiles, that we bear in mind the importance of the multi-fibre arrangement. During these negotiations it was insisted by the United Kingdom Government that progress towards the tariff-cutting exercise, under the multilateral trade negotiations for textiles, be conditional upon the renewal of the multi-fibre arrangement. That arrangement is the most comprehensive set of agreements regulating the import of textiles into this country that has ever existed. It was substantially renegotiated and widened during the period of the previous Government, and I hope that the success that we achieved will not be put at risk by the present Administration. I confess that I was deeply disappointed that the hon. Gentleman, when answering questions during the last Question Time on trade, seemed to display a reluctance to commit the Government to a continuance of the multi-fibre arrangement.

We shall be pressing the Government constantly on this matter. We reached agreement within the Council of Ministers on the importance of renewing the multi-fibre arrangement, and it will be little short of folly if that achievement is thrown away needlessly by the present Government. I believe that the Government will come to realise, during the course of the negotiations with the industry, that all sides of the textile industry place great importance on renewal. If there is to be a secure future for the industry there must be a renewal of the multi-fibre arrangement on something like its present scale. The Government must also take into account the importance of connecting that with the textile tariff reductions of the multilateral trade negotiations.