The Future of the Multi-Fibre Arrangement

Part of the debate – in the House of Commons at 10:58 am on 12 January 1990.

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Photo of Mr Giles Shaw Mr Giles Shaw , Pudsey 10:58, 12 January 1990

I am delighted to join colleagues on both sides of the House in welcoming the return of my good friend, my hon. Friend the Member for Harborough (Sir J. Farr). How good it is to see him lead the debate once again with such vigour.

In common with the hon. Member for Oldham, Central and Royton (Mr. Lamond), I shall be brief. In a sense, I must apologise not to the House, but to my constituents. This is the first time in about 10 years that I have participated in a debate on textiles. The issues, however, remain much the same.

I make no apology for speaking as a firm and committed supporter of the continuity of the multi-fibre arrangement. I may view it from a different angle from other hon. Members, but I do not envisage the use of the arrangement as purely protectionist. It is part of the development of a trade policy that, with fairness and firmness, will allow world textile manufacturers and marketing to take place in an orderly and reasonable way.

Although I have heard Professor Silberston and read chunks of his report, I do not believe that the issue can be determined by such examinations. My hon. Friend the Parliamentary Under-Secretary of State for Corporate Affairs should accept that in any industry as complex as the textile industry—which has been ill-organised for many generations, but now it is impeccably organised—there will always be huge difficulties with international trading arrangements, whether with primary raw materials, marketing, manufacturing or the labour force.

The reason for the large gathering of hon. Members today is to demonstrate, almost at a stroke, that we are talking about 9 per cent. of British manufacturing industry. Every significant region on the north and the midlands is represented by its Member of Parliament. It is a large exporting industry, with significant potential.

What has happened during the past 25 years in the industry is history, but there has been a massive reinjection of new technology, which has contributed to the reductions in labour forces—however unwelcome they may have been. I take the point made by the hon. Member for Oldham, Central and Royton about the future stability of employment in the industry depending upon the future stability of the industry. Employment is not, of itself, the objective; the objective is an industrial base that can sustain employment. To date, that degree of security has been represented by the multi-fibre arrangement. I wish to make three points about that.

First, if we believe, as I do, that the arrangement is a continuing ideal, there is no reason why the basis of how it is implemented should not change. I well recall that, when it was introduced it was viewed as a transitional arrangement from two standpoints—first, that of European Community development and, secondly, world trading arrangements with countries outside the Community. It was to be a market liberator, an industrial opportunity and a trading bedrock that would allow that opportunity to develop fairly over time.

There is no reason why the multi-fibre arrangement should not be renegotiated within the GATT framework, which would ultimately take over. However, we must learn from what has already happened with the application of the multi-fibre arrangement and what needs to be done in GATT to make that application more effective for all parties.

My hon. Friend the Under-Secretary referred to modalities. In Pudsey we do not know about modalities, but we do know about dumping. I agree with the hon. Member for Oldham, Central and Royton that, taking it as a simple issue, the existing arrangements on dumping are absurd. No organisation in the City of London would have a regulatory body operating in such an arcane and absurd way. Why cannot the onus of proof be on the importing country? Why must the receiving country have to prove that 14 companies have collapsed? That is absurd.

If there is to be a way of passing through the House a refined multi-fibre arrangement within the context of GATT, the dumping issue must be grabbed. My hon. Friend the Under-Secretary has the zeal to grab it. He must demonstrate that the Government will make it an immediate and effective requirement on the exporting countries to show, at bill of lading stage, the costs of their goods and that those are true, fair and acceptable.

My hon. Friend specifically mentioned time scale. There must be a time scale while the multi-fibre arrangement and GATT work through. I do not think that any hon. Member would disagree that the linkage between the two is essential. The time scale must be generous—perhaps five, six or eight years. That matters not, provided that it is not overnight and provided that it is not dealt with, in European Community terms, as an arrangement that we have had for long enough, and therefore we just end it.

I am worried that Community rules and regulations may not provide for a sufficiently long period of linkage into GATT before GATT takes over. I recognise that other textile countries within the Community are not as substantially based as the United Kingdom, so they may think that it is another British issue that they would rather not tackle. I urge my hon. Friend to recognise that the present state of the industry—even in this country, where it has great support, 9 per cent. of manufacturing, and a vast export potential—requires a generous renegotiation of the multi-fibre arrangement within GATT and that the linkage be positive, not negative.

The Community arrangement with GATT must be firmly led by the United Kingdom, and must not trot off after the Portuguese. Above all, dumping—I do not know the Turkish word for dumping, but I do not like the sound of it—should be dealt with in an effective, speedy and practical way, as opposed to the impractical modality at present in place.