I congratulate my hon. Friend the Member for Keighley (Mr. Waller) on securing this debate on the GATT textiles negotiations. I know that he and many other hon. Members take a close interest in this subject, which is so important for the textiles manufacturers in their constituencies. They have once more made their concern clear this morning. I was particularly impressed by the knowledge of my hon. Friend the Member for Keighley about the world trading system and his attack on subsidies and controls in the world. The House is grateful to him.

Let me say at once to the hon. Member for Bradford, West (Mr. Madden), whom I thank for taking part in the debate, and to my hon. Friend the Member for Bosworth (Mr. Tredinnick), that the Government share their interest and concern. We are in no doubt about the importance of securing a satisfactory overall settlement to the Uruguay round and, within that, a satisfactory conclusion to the GATT textiles negotiations and agreement on the phasing out of the multi-fibre arrangement. I shall return to that in more detail towards the end of my speech. Ministers have frequently made clear their commitment on those points, both in the House and outside.

The House may find it helpful if I outline where matters stand on the round in general. Its precise future is at present uncertain. Although a basis for resumed negotiations has been agreed and President Bush has asked Congress for the necessary two-year extension of the United States' fast-track negotiating authority, Congress has until 1 June to vote on his request. This process of securing extension is at present a matter for the United States but the outcome is of vital interest to us all.

If the round is to survive, it is important that all parties show a commitment to the negotiations. The world trading system urgently needs a non-inflationary boost of the sort that will be brought about by increased trade flows resulting from a successful conclusion of the Uruguay round. We need to preserve the momentum of the substantial progress made at Brussels on a number of issues, not least textiles, and to prevent domestic political issues and bilateral trading pressures from undoing the good work that has been done so far.

For these reasons, the Government believe that the round needs to be concluded quickly. Without an agreement this year, there is a danger that the round will drift, and that hard decisions will be postponed until after the United States elections in 1992. Nowhere is the urgency greater than in textiles. The Government have always made clear their conviction that liberalisation of trade in textiles will be to the benefit of consumers and the United Kingdom economy as a whole. We want to see it brought about in the context of a successful overall conclusion to the Uruguay round. Liberalisation should take place over a transitional period, the length of which must strike the right balance between on the one hand giving industry further time to adjust—I take into account the points made by my hon. Friends and the hon. Member for Bradford,West—and on the other hand not delaying unduly the benefits of liberalisation.

The negotiating mandate agreed by all parties at the outset of the Uruguay round set the objective of returning trade in textiles to GATT on the basis of strengthened rules and disciplines. The United Kingdom and the European Community have made it clear that we want commitments from other countries to accept adequate strengthening and to improve market access so as, among other things, to provide fairer conditions for trade in textiles and clothing. Therefore, whilst it is essential that the United Kingdom and the EC continue to show themselves committed to ending the MFA, it must be on the basis of a corresponding commitment by all other parties to strengthened rules and disciplines. That is a vital point which, I hope, will reassure my hon. Friend.

Although the GATT ministerial meeting in Brussels last December failed to reach agreement, good progress was made in some areas, including textiles. Had the overall negotiating climate been more favourable, an agreement looked attainable to phase out the MFA over about 10 years. Ideally, we would have preferred a shorter period and others would have preferred a longer one. However, I know that a 10-year phase-out is broadly acceptable to the United Kingdom industry.

A key aspect of those negotiations and one which rightly receives much attention, not least from hon. Members, is the linkage that I have mentioned between progress in phasing out the MFA and in the strengthening of GATT rules and disciplines. Good progress was made here in Brussels as well.

Agreement was emerging on a system to monitor commitments by others to strengthened rules and disciplines and much more open markets; on a new and more workable GATT safeguard mechanism against surges in imports for use once the textiles transitional period was over; and on a specific selective textiles safeguard mechanism for use during the course of the transitional period.

Other prospective benefits to the textiles industry would include specific protection for textiles designs under a trade-related intellectual property agreement, increased access to overseas markets through reductions in the high tariff and other trade barriers operated by many of our competitors—a point mentioned today—and more satisfactory rules governing unfair trade practices such as dumping and subsidies. I know that hon. Members and the United Kingdom industry share our determination to secure improvements in all those areas.

As to the immediate future, the quota restrictions under the MFA expire at the end of this year but the protocol itself, which gives the MFA legal force, expires in July. Had the round concluded last December, as planned, there was a good prospect of agreement by all to a five-month extension, so that in January 1992 we could have moved smoothly into the transitional period over which the MFA would be phased out. But with the lack of an agreement at Brussels, this timetable now seems much less secure.

Hon. Members have made clear the uncertainty this causes. We understand industry's and trader's concern, and we wish to avoid a legal vacuum pending the conclusion of the Uruguay round. Other member states and other GATT parties which import and export, share our view. All parties are now giving thought to the question of extending the MFA pending a settlement of the Uruguay round.

However, apart from a common desire to avoid uncertainty and a legal vacuum, the interests of the participants in the negotiations are, of course, as one might imagine, fairly diverse. It is therefore not possible yet to be certain of the terms on which any extension might be agreed, or its duration, but we shall push for interim arrangements to be agreed in good time before the MFA expires.

As to the key point, the length of the extension, a range of possibilities is currently being canvassed amongst GATT members. At one end of the spectrum, the United States—with little or no support, as has been mentioned today—favours a 29-month extension, to December 1993. At the other end of the spectrum, we and some of our EC partners—Germany and the Netherlands—can see merit in a five-month extension. This would be consistent with our target of concluding the round as fast as possible while leaving open the possibility of a further 12-month extension thereafter if progress were to prove slower than we hoped. Some other EC and GATT members are in favour of the middle ground—a one-step extension of 17 months, to the end of next year.

As yet, no agreement on the point has emerged within the EC itself. However, the Commission, as a lead negotiator, has requested a degree of flexibility, not least because the supplying countries have yet to give their views and are unlikely to do so before mid-May. The Government recognise that there may be a need for flexibility. We shall continue to discuss the issues with our EC partners, looking for a balance to be struck between providing a reasonable period of certainty for the industry and traders, while not sending a pessimistic signal about the speed at which the round as a whole can be brought to a successful conclusion.

I hope that what I have said today strikes a reasonable balance and will satisfy hon. Members.