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Multi-Fibre Arrangement

Volume 938: debated on Monday 7 November 1977

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10.

asked the Secretary of State for Trade if he will make a statement on progress being made in bilateral negotiations on textiles prior to renegotiation of the Multi-Fibre Arrangement.

30.

asked the Secretary of State for Trade if he is satisfied with the progress being made in the renegotiation of the Multi-Fibre Agreement.

Negotiations are taking place in Brussels between the EEC and a number of low-cost supplying countries. It is too early yet to judge what the outcome of these negotiations will be, but the EEC has made it clear that it will not renew the MFA in December unless the results are satisfactory.

Does my right hon. Friend appreciate that both sides of the British textile industry are extremely grateful for the very useful role that the British Government have played in the past few weeks in the renegotiation of the MFA? Will he give assurances that extremely tough bilateral arrangements will be sought, particularly in the cases of Hong Kong, South Korea and Taiwan, and that if these bilateral arrangements are not acceptable Britain and her EEC partners will take unilateral action to ensure that there is no market disruption of the British textile industry?

I am grateful to my hon. Friend for his comments about the British Government. We thought it necessary to make the mandate more specific, and I think that that was achieved by our intervention a few weeks ago. It is certainly our object to provide in the renewed MFA a better level of protection for the United Kingdom textile industry. The European Community has indicated that, if it is not possible to get satisfactory bilateral agreements, the Commission will propose unilateral action by the European Community. We consider that statement by the Community to be a most important element in this total situation.

Will the Secretary of State bear in mind when renegotiating either the MFA or the bilateral agreements that our textile industry cannot afford a steady increase in imports unless imports are strictly related to domestic consumption? If that is not done, it will be absolutely fatal. Will he bear this point firmly in mind when he is renegotiating, and also remember that this will mean that on some occasions there is a negative quota for a year—that is, a quota below that of the previous year?

The hon. Lady will appreciate that we are in negotiation. We have taken 1976 as a basis, which means that in certain cases, if a mandate is achieved, there will be a reduction in imports in, say, 1978 and 1979. As to relating imports to consumption in this country, the hon. Lady will know that we do not have a recession clause in the mandate.

On the other hand, if we achieve the mandate it should give the British textile industry much better security in the next period than it had in the previous period, and it might allow the British textile industry to expand its production. These are our objectives. We hope that the mandate will be achieved. The United Kingdom has the position in that negotiation that my hon. Friend has just explained.

Will my right hon. Friend state the Government's principle on the question of a finished article or garment being imported into this country at less than the cost here of the raw materials required to make it? What action will the Government take about such articles coming in?

My hon. Friend is referring to cases of dumping. If there are cases of dumping, the industry which feels that it is being dumped against should get in touch with my Department. With the industry, we shall draw this to the attention of the European Commission, which is now responsible for the question of dumping in most places. In the MFA we are concerned with the control of undumped imports.

Will the right hon. Gentleman bear in mind that if Spain and, possibly, Portugal join the EEC and have greater access to our textile markets, we must ensure that Taiwan, Korea and Hong Kong, among others, have less access to our markets than before? Is he aware that otherwise our textile industry will get into an even worse state?

The hon. Gentleman knows that there are arrangements to cover low-cost sources in Europe. We shall no doubt be negotiating the entry of Spain, Portugal and Greece into the Community, and we shall have to take account of all these effects on the United Kingdom economy.