The Future of the Multi-Fibre Arrangement

Part of the debate – in the House of Commons at 11:21 am on 12 January 1990.

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Photo of Nicholas Winterton Nicholas Winterton , Macclesfield 11:21, 12 January 1990

My hon. Friend has made his point very well.

Renewal of the MFA is vital to the future of free trade in the textile and clothing industries. The leverage and influence that it provides can be used to ensure that clear and quantifiable progress is made in dismantling and eliminating the trading abuses that still exist and that allow the dumping of goods—which has been emphasised during the debate—to continue almost unchecked, although technically it is condemned under the GATT rules, which, in too many cases, have proved to be a toothless watchdog. It is time that we tightened up on those abuses. The renewal of the MFA could be used to encourage the establishment of rules to allow action which is swift and effective in coping with attempts to undermine markets through the dumping of seasonal and fashion goods in particular.

I and other hon. Members who seek to assist the industry are deeply concerned that current European proposals do not go nearly far enough in allowing increased scope for the use, for example, of constructed prices in anti-dumping cases, and penalising the use of dumped components—all important points in the debate. We have a long way to go in eliminating the grossly unfair subsidies which are made available by some Governments to reduce the cost of exports from their own textile and clothing industries. That practice is unacceptable, but it continues to be widespread. I am sure that others who speak in today's debate will provide specific details.

I wish to move on, as two further gross trade distortions must be put on record. The first is the theft of designs and brand names, which is sadly becoming increasingly prevalent as the pace of fashion change heats up. Effective international rules must be established to outlaw that practice and to protect intellectual property rights.

The second trade distortion is the straightforward closure of markets to the United Kingdom clothing and textile industry. We cannot possibly open up our markets totally to overseas competition while our own products face huge tariff and non-tariff barriers overseas. It is essential that the Uruguay round should lead to an opening of those markets to allow a true free flow in international trade.

I have highlighted to successive Ministers the gross distortions which exist, which mean that Brazil has implemented virtually a total ban on import , and that Turkey, through the imposition of an imaginative if totally unjust housing fund contribution, has priced our products out of its domestic market. Yet we are expected to open our markets to them. That is grossly unfair, and, whatever the EC might say, we must do something about it to ensure that it does not continue.

The rules of the GATT agreement must be made more workable. We need to consider the possibility of selective action against particular countries whose exports cause or threaten disruption and to suspend in specified circumstances the requirement to compensate the countries which are affected.

It is interesting to note that Professor Silberston, who so often has been portrayed as the bete noir of the textile and clothing industries, now shares the concerns that have been expressed about the trade. He now supports in principle the need to link the future of the multi-fibre arrangement with verifiable progress in strengthening GATT rules and disciplines. Needless to say, I believe that Professor Silberston has once again seriously underestimated the impact of phasing out the MFA on jobs in Britain. Even his own figure of 33,000 resulting job losses is one which we must not begin to countenance.

I understand that the Retail Consortium, which has just hot-footed it back from a meeting with our former colleague and now European Commissioner, Sir Leon Brittan, and which is a long-standing opponent of the MFA, has also accepted that the immediate abolition of the MFA would cause such disruption to the United Kingdom industries that it would be counter-productive, even from its own limited viewpoint.

In a call to my office yesterday afternoon, the consortium accepted that renewal of the MFA in 1991 is necessary and said that its subsequent phasing out must be gradual. The Consortium's time scale of five years, like that of Professor Silberston, displays a continuing ignorance of the way in which in reality our domestic clothing and textile industries function in international markets.

After careful thought, I take the view that we must look forward to a period of at least 10 years beyond the time at which GATT rules are strengthened before we can assess whether the changes have worked and it is prudent to begin to bring an end to the MFA. Any earlier move would be imprudent, precipitate and downright irresponsible. As my hon. Friend the Minister well knows, that view is now shared by several developing countries who fear for a future in which their infant industries would be left to flounder if exposed too soon to unrestricted trade.

It is interesting to note that the Retail Consortium, the textile industry, a number of developing countries and even Professor Silberston, all take the view that premature abandonment of the MFA would cause serious damage to our economy and world trading patterns. That would he in nobody's trading interest, and that makes support for the renewal of the MFA in 1991 the sensible and inescapable conclusion of our debate.

I should like to ask the Minister two specific questions. Will he give us an assurance in clear terms that he accepts that the future of the MFA must be linked to clear and quantifiable improvements in the working of the GATT rules? Secondly, I express my concern and ask the Minister about current rumours that would affect the position of the United States of America. It is mooted that the American Administration are currently proposing that the MFA should be replaced by a series of global quotas.

Can the Minister shed any light on that rumour, because such a change would be disastrous for United Kingdom exports? It would leave us and the rest of the European Community vulnerable to all the goods diverted from the United States and would throw world trade in textiles and clothing into chaos. Will the Minister give a firm assurance that he will stand against any such ludicrous proposal?

This debate is unique because every speaker will be strongly in favour of the MFA. That is not only a message to the Government, but a clear message to the European Community, and I trust and pray that it will not be ignored.