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Index Of Competitiveness

Volume 941: debated on Monday 12 December 1977

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asked the Secretary of State for Trade what adjustments to the Index of Competitiveness are needed to take account of (a) the loss of tariff advantages in the European Free Trade Area, the Commonwealth and the Irish Republic since 1970 and (b) the granting of tariff concessions in the United Kingdom Market to EEC members.

Changes in tariffs may affect United Kingdom and competitors' export prices and the market pattern of trade thereby influencing the weighting used in the export competitiveness index. Reliable estimates of such effects are excluded because, for example, there is no way of knowing how traders have reflected tariff changes in their prices. However, the granting of tariff concessions in our markets to the EEC Six has probably had only a very small effect on relative export prices and the loss of Commonwealth preference next to none. Tariffs between ourselves, EFTA and the Irish Republic have been essentially unchanged since 1970. Reciprocal tariff reductions by the EEC Six could have had a greater potential influence on the index than tariff reductions, essentially because the EEC Six represent a far greater proportion of our total market for exports of manufactures than does the United Kingdom for the countries of the EEC Six.