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 Bob Cryer Mr Bob Cryer , Keighley 12:00 am, 29th June 1979

This debate is too important for a Friday afternoon. I hope that in future the Government will leave Fridays for what has been traditionally the prerogative of the Back Bencher and Private Members' motions rather than bringing forward their own business. My view applies not only to this debate but to the earlier statement about EEC matters.

The arrangement of world trade is crucial to our industrial development, to the retention of jobs and the creation of new ones. We face a difficult future, not least because of some of the proposals. One of the problems is that we are not planning our international trade sufficiently. To say that the reduction of tariff barriers and the breath of competition will produce the answers is not enough.

We already face an amount of de-industrialisation in this country. I am talking not about widespread protectionism but about the right of the United Kingdom Government to make decisions about our economic position which involve the retention and the regeneration of British manufacturing industry. Unless we have the right, for example, to institute quota provisions over a wide area of manufacturing activity, we lose the opportunity to ensure that this regeneration takes place.

I am not talking of protecting outdated and inefficient industry. I am talking about industry which has been deprived of development during the whole of the post-war period. I am also talking about the position of large sectors of our economy which have enormous power and strength—the multinationals which can make decisions affecting thousands of people and which are subject to little or no accountability.

An example is Thorn, the multinational television and audio manufacturer, which decided to close a factory in Bradford with a loss of 2,300 jobs. That means that there will be fewer opportunities in the area for the learning of skill and for employment. That decision was taken at the expense of importing 100,000 portable television sets from West Germany and South Korea.

That type of decision cannot be taken for ever. Industry will be totally extinguished by imports if we do not arrest the process of deindustrialisation, preserve jobs and encourage research and development into the creation of new jobs.

Our anti-dumping measures have been less than satisfactory. The Department of Trade has retained the unit which gives advice and guidance to manufacturers. However, the onus is on manufacturers to prove that competitors are dumping. It is almost impossible to discover the costs involved and to open competitors books. In practice the implementation of anti-dumping rules is most unsatisfactory.

The Minister talked about the removal of non-tariff barriers and cleaning up the rules of the world trading system. We all welcome that. If the negotiations result in that, all will be well and good. But we seem always to be at the receiving end of the application of non-tariff barriers. We always seem unwilling to apply non-tariff barriers ourselves, or incapable of doing so, even when an element of common sense is involved.

An example is the application of safety rules. If a West German manufacturer places equipment on exhibition and it is below the West German safety standards, a sign is placed upon it, it will not be sold and it will be removed from the exhibition. That does not happen here. Section 6 of the Health and Safety at Work, etc. Act has enormous powers, and yet there are no factory inspectors at our ports to examine equipment coming into the country. If we say that we must clean up world trade and rid ourselves of the dubious non-tariff barriers, it is reasonable for us to have safety standards which are as high as those which operate in West Germany.

The Minister said that the new agreement concentrated on transparency. But we should let importers know that the Health and Safety at Work, etc. Act exists. Let factory inspectors examine manufactured goods at ports of entry and in exhibitions to ensure that they are safe. At present machinery and goods are imported and only if an accident occurs do we discover that there is a defect in that equipment. Other countries work differently.

The Minister said that industrial support was likely to be reduced. That is a matter for anxiety. We are not acting in total multilateral synchronisation with other countries. If we reduce our industrial support policies other countries will not match that reduction. There is no reason why they should.

The Government are reducing industrial support because of their belief in the political will-o'-the-wisp of private enterprise standing on its own feet and their faith in competition producing all the right answers. It happened before, in 1970. The Government, led by the right hon. Member for Sidcup (Mr. Heath), said the same. All the money went not into manufacturing enterprise but into property. When the property bubble burst it nearly brought down the English banking system.

There is no guarantee that if we reduce industrial support there will be the draught of competition which will create new jobs and new opportunities. That is unlikely to happen. Our competitors will not operate the same policies. Countries such as West Germany, Japan and France have strong advice, guidance and investment policies which help develop and regenerate industry.

All that we shall do by reducing industrial support in the regions, and in general through the national schemes, is to place one of our industrial hands behind our back while our competitors forge ahead. It is absurd to operate such a policy.

It is not a question of whether the Government will perform a U-turn on industrial policy but when they will do it. They will turn at some stage. They cannot do otherwise, because the consequences of their policies will be the loss of thousands of jobs and the decline of industry.

I turn to the question of the Government's procurement code. The Minister says that this will be more relaxed and that it will allow a wider degree of tendering by international bodies. Once again in the EEC we are conforming to the rules when others do not. I tabled a question about the number of advertisements that we had inserted over a certain period. I discovered that we had advertised 250 contracts while the total from the EEC membership was about a dozen. That is absurd. Why do we have to go through that rigorous procedure when other member States do not? Why should we do that when we are not operating at parity, when West Germany and France have a more buoyant economy? We open our doors to international tendering for our contracts but other EEC members do not. That is a matter that must be watched extremely carefully. I hope that we shall receive an assurance from the Government.

The Minister referred to selectivity and safeguard action against imports. I share the view of my right hon. Friend the Member for Lanarkshire, North (Mr. Smith) that probably nothing will happen in those vital areas.

One of the most sensitive issues during the renegotiation of the multi-fibre arrangement was that the textile industry faced sudden massive imports from countries which were not foreseen to be sources of textile products. There was enormous disruption, which led to job losses.

I know that the Department of Trade is dominated by free-traders to the virtual exclusion of all else. They think that we should adhere to the philosophy of free trade, but it should not be adhered to at the expense of jobs. Those who have comfortable, well-paid jobs with index-linked pension schemes should bear in mind that disruption caused by cheap imports means the loss of jobs in the United Kingdom. It means the closure of mills and factories. Therefore, we should press strongly for selectivity and the possibility of a safeguard clause against a disruptive level of imports that will threaten jobs and industry.

I remind the House of what can happen. As a first step we may accept the introduction of imports. We have a responsibility to the rest of the world and we want to ensure a reasonable level of trade. The introductory level may be 20 per cent. but it may climb, as it did with cotton yarn, to about 80 per cent. of the total United Kingdom market. If that happens, the United Kingdom industry diminishes to a level at which it is no longer able to support research and development organisations, and at which companies cannot maintain their own research and development programmes. Therefore, the industry and the companies lose out.

However, the companies of the exporting countries will carry out research and development work in either textile products or manufacturing techniques. The result is that British industry falls behind yet again. We must ensure that suitable criteria are agreed and that we have reserve powers of selectivity.

I intervened in the Minister's speech to ask him about a social clause. That is frequently mentioned when discussing the Tokyo round. It was raised by both sides of the textile industry. The Minister said that negotiations had not yet finished and that the matter might well be discussed. Unlike some Conservative Members, I do not think that competition is the universal panacea. That belief is held by a diminishing number of Conservative Members which will become even smaller as time shows that it is a false premise.

When I talk to industrialists they say that they are prepared to face competition as long as it is fair. However, they now have to face unfair competition. We have employment protection and health and safety legislation. There are Acts on the statute book that require that wages should be paid in cash and in full. The Truck Acts date from the nineteenth century. Some of the provisions of that legislation can be circumvented by some employers, but the fact remains that we have employment legislation which is designed to ensure that reasonable standards are enforced. These standards are often enforced through the ILO Convention. I have compared the performance of Hong Kong with that of the United Kingdom, and it seems that Hong Kong put into effect 24 applications of the convention, whereas the United Kingdom applied about 75.

When I was a Minister I said that workers in Hong Kong were exploited. I am happy to say that that caused enormous ructions in the Hong Kong Assembly. Members went berserk when they heard that a United Kingdom Minister had said that. Apparently we were supposed to keep our mouths shut and ignore the differential system of employment between the United Kingdom and Hong Kong.

The position is the same in South Korea, where employees work long hours and there is little labour legislation. The trade union movement is virtually nonexistent, as are the rights of workers. We want to ensure the addition of a social clause to a selectivity provision so that we may say "The United Kingdom market is open to you to a reasonable degree. We want to help you, but at the same time we want to ensure that minimum levels of employment legislation are applied in your country, so that workers are not exploited in the grossly offensive way that often happens in countries such as South Korea and Hong Kong." All these matters must be part of the continuing negotiations.

We are grateful for the Government background paper. I regret that a copy was not in the Vote Office, as the Minister claimed. Apparently it was in the Library. I do not know at what time it was available in the Library, but it was not there early this afternoon. The Minister will therefore appreciate that I have not had time to absorb all the documents on this complicated matter.

The Minister said that the final text, when agreed, would be an important document. He is absolutely right. Will he bring to the notice of his right hon. Friend the Leader of the House the need for a further debate on the final text? I hope that this is a preliminary debate on that route.

I have received representations from the West Riding wool and textile industry. I hope that the Minister will not mind my using the words "West Riding". They were deleted from our language by executive fiat of a previous Conservative Government. That caused deep and continuing resentment in the West Riding.

The West Riding wool and textile industry was greatly concerned at the tariff that it faced in America. According to paragraph 12 of the background paper, the tariff on woven woollen cloth of over $9 per pound is to be reduced from 44·4 per cent. to 33 per cent. We have a good trading relationship in many areas with America. If we reach multilateral arrangements which are to our reciprocal advantage, all well and good. However, we must ensure that we do not grant concessions, without reserving rights of our own, to a point where our industry is severely damaged. We have gained a tariff reduction of about 11 per cent. However, the West Riding textile industry still faces problems over outward processing, on which the EEC Commission appears not to be acting with sufficient speed. Although we made a modest gain, there is still the problem of outward processing.

I agree with my right hon. Friend on the question of the renewal of the multifibre arrangement. It may be that as the notion of international competition and free trade is still echoing around, somehow the MFA talks appear to be some time away. The Minister should be well prepared for the MFA renegotiations. If not, the Commission might well try to spring on him the kind of measure it sprang on the previous Government. It tried a number of dodges to reduce the standards. We sternly resisted them. It is to the credit of the previous Government that the MFA is so strong and gives greater quota protection than ever before.

The MFA must continue. We do not expect a guarantee of the exact area of quota protection or quota coverage to be given. Confidence would be given to the industry if the Minister said that when the MFA came up for renewal it would be part of the Government's stance to maintain an adequate position for the industry, so that it could have confidence that it would not simply disappear under a huge pile of imported sensitive items and become extinct. I hope that the Government are concerned to renew the MFA when it comes up for renewal in two years' time.

I hope that this debate is not the conclusion of the matter and that the Leader of the House may afford a further opportunity for debating this important issue.

The background paper is of the greatest importance. The only previous article on the subject appears in the Department of Trade and Industry weekly magazine, which has a somewhat narrow and highly specialised circulation. I hope that the Minister will issue further papers and supply them to the Vote Office and the Library somewhat earlier than the day of the debate.