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Motor Vehicles And Components (Exports)

Volume 718: debated on Wednesday 3 November 1965

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asked the President of the Board of Trade if he will make fresh representations to the new Norwegian Government in regard to their obligations under the Stockholm Convention to reduce the duties on motor vehicles and components.

asked the President of the Board of Trade (1) if he will make fresh representations to the new Norwegian Government in regard to their obligations under the Stockholm Convention to reduce the duties on motor vehicles and components;(2) what reasons have been given by Norway for the failure to reduce duties on motor vehicle imports from Great Britain except built-up buses, in accordance with the Stockholm Convention.

The action of the Norwegian Government in maintaining these duties is permissible under the Stockholm Convention. However, we have made clear our dissatisfaction with this decision, which we regard as contrary to the spirit of E.F.T.A. We shall continue to pursue this issue as opportunity arises.

asked the President of the Board of Trade what reduction has been made by the Norwegian Government in import duties on motor vehicles and components in accordance with her European Free Trade Association obligations under the Stockholm Convention.

The tariff on bus bodies, which are manufactured in Norway, has been reduced in the normal way. Complete buses of E.F.T.A. origin benefit from this because they are subject to duty on the value of the engine and chassis only, while non-E.F.T.A. buses pay duty on their total value. Norway does not manufacture other motor vehicle components, or any complete motor vehicles, and consequently there are no other protective duties in this field which she is obliged to reduce under the Stockholm Convention.

asked the President of the Board of Trade whether he will make representations to the new Norwegian Government in regard to the recently increased investment and sales taxes on motor cars.

No. The Norwegian investment and sales taxes on motor cars are internal taxes of a revenue nature which do not discriminate against cars of British manufacture.

asked the President of the Board of Trade whether, in view of the fact that European Free Trade Association countries have not accorded to British vehicle exports the benefits of a free trade area, he will propose at the forthcoming Copenhagen conference of European Free Trade Association members the replacement of Article 6 of the Stockholm Convention by a provision corresponding to Article 17 of the Rome Treaty.

asked the President of the Board of Trade to what extent has Portugal reduced her tariffs on motor vehicles and components in accordance with her obligations under the Stockholm Convention.

The duty on assembled vehicles has been reduced to 80 per cent. of the basic duty, and Portugal now intends to apply a similar reduction to the duty on "completely knocked down" vehicles imported for local assembly. The remaining duty has in each case been declared a revenue duty; certain aspects of this procedure are currently under examination in E.F.T.A.

asked the President of the Board of Trade what reduction has been made by Switzerland of her tariff on motor vehicles and components with undertakings made by her at the Stockholm Convention.

The tariffs on heavy commercial vehicles, and on those vehicle components of which there is Swiss production, are being reduced at the normal rate; they now stand at 30 per cent. of the basic duties.Tariffs on other vehicle components, and on light commercial vehicles, which are not produced in Switzerland, have been declared revenue duties under Article 6 of the Stockholm Convention and are not being reduced.The tariffs on private cars have been reduced by varying amounts, usually in excess of 50 per cent. of the basic duty. The remaining amounts have been declared revenue duties and are not being reduced.

asked the President of the Board of Trade what is the effective advantage given by Danish import regulations to cars of German make over those of British make, after payment of Purchase Tax.

asked the President of the Board of Trade whether he is aware that the reduction made by Denmark in the customs duties on cars since the formation of the European Free Trade Association has been more than offset by the consequences of their abolition of duty on unassembled car units, since the latter benefits only Germany and the United States of America which have arrangements for assembly in Denmark; and whether, in view of this and of the recent increase of purchase tax on cars imported to Denmark, he will have consultations with the Danish Government on imports of British cars, particularly as Denmark has a favourable balance of trade with the United Kingdom.

Danish import regulations give an advantage to British, not German, cars. Imports of complete cars from Germany are subject to a 12 per cent. duty as opposed to 3ยท6 per cent. on British cars. There is no duty on components imported for assembly in Denmark. Manufacturers who assemble there, and these include both German and British firms, thus enjoy some advantage over those who do not.

asked the President of the Board of Trade what representations have been made to the Swiss Government, under the European Free Trade Association Agreement, in regard to the substitution of alternative sources of revenue to replace those on imported motor vehicles and components now retained by the Swiss Government for revenue purposes; and with what results.

None. The remaining duties on motor vehicles imported into Switzerland from E.F.T.A. have been declared revenue duties in accordance with Article 6 of the Stockholm Convention and there is no requirement that they should be reduced or abolished. Duties on vehicles and components of which there is domestic production are being reduced in accordance with the Convention.

asked the President of the Board of Trade (1) to what extent the conditions of Finland's entry to associate membership of the European Free Trade Association have been fulfilled as regards the reduction of customs duties on cars;(2) what steps are being taken to press the Government of Finland to reduce customs duty on British cars in accordance with undertakings given when associate membership of the European Free Trade Association was granted.

The reduction of customs duties on cars was not a condition of Finland's entry into associate membership of E.F.T.A.; nor were any formal undertakings to reduce these duties given by the Finnish Government. I agree, however, that it would be consistent with the spirit of the FINEFTA agreement for such reductions to be made; and we shall continue to press this on the Finnish Government.

asked the President of the Board of Trade, whether he will raise at the Copenhagen conference of European Free Trade Association members the Finnish hire purchase regulations which discriminate against cars from Western Europe.

These arrangements, which are intended to discourage imports of Western European cars for balance of payments reasons, do not appear to have had a significant effect on trade. But I nevertheless consider the discrimination objectionable, and I shall continue to press for its removal.

asked the President of the Board of Trade what special action he is planning to obtain better trading conditions for motor car imports to countries in the European Free Trade Association.

I would refer the hon. Member to the Answer which I gave to the right hon. Member for Sutton Coldfield (Mr. Geoffrey Lloyd) today.

asked the President of the Board of Trade what progress was made at the Copenhagen conference of European Free Trade Association members towards implementing the Stockholm convention as regards duties on vehicle imports.

I received an assurance at Copenhagen from the Portuguese Minister of Economy that Portugal will apply the same reduced rates of duty to "completely knocked down" vehicles as she now applies to assembled vehicles. Other E.F.T.A. countries have implemented their obligations under the Stockholm Convention in this field, but some have retained revenue duties which have no protective effect. We consider these not to be consonant with the spirit of the Convention, and in these cases we shall continue to pursue this issue as opportunity offers.