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Multi-Fibre Arrangement

Volume 986: debated on Monday 16 June 1980

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6.

asked the Secretary of State for Trade if he will negotiate a strengthened multi-fibre arrangement in 1981.

Mr.

The Government accept that a new multi-fibre arrangement will be necessary when the current arrangement comes to an end in 1981. The exact form and terms of the successor arrangement will be a matter for negotiation, but the Government will, of course, have the interests, and views, of the United Kingdom clothing and textile industries very much in mind in those negotiations.

Does not my hon. Friend accept that if he gave a commitment to the House today that the multifibre arrangement would be strengthened, those firms which are teetering on the brink and considering closure would hang on for a better trading climate?

My hon. Friend knows as well as anyone in the House that the present arrangement has two-and-a-half years to run. The industry must know that over this next critical period, its basic protection under the bilaterals which end in 1981 will be the existing arrangement. Of course we note what my hon. Friend says about the need to strengthen the new arrangement. I hope that he has noted that I said that this is a matter for negotiation and that in that negotiation we shall have the best interests of the industry at heart.

But since it has been clearly demonstrated that the present MFA, despite its enormous complexity, has done nothing at all to assist the textile industry, should not we look for something a little more radical from the present Secretary of State, for whom we have a high regard, than increased protectionism?

The hon. Member will know that the present arrangement was negotiated by his Government and that it has succeeded in its original objective of maintaining the level of imports from developing countries at around 12 per cent. It is unfair to his right hon. and hon. Friends to say that that agreement is not working, because to a considerable extent it is achieving the desired result.

Does my hon. Friend agree that it is not what is in the MFA that is important, but what is not in it? Does he not agree that the gentlemen's agreement quotas which have been given to the Mediterranean associates have been breached dramatically, thus undermining the confidence of our textile industry? Will my hon. Friend do something about that to make the next MFA much more robust?

My hon. Friend seems to specialise in making strong, but—I am afraid—not wholly accurate statements. The truth is that we have a range of agreements which are monitored extremely carefully. They are not breached as if they did not exist. The sooner my hon. Friend joins me in telling the industry that the arrangements that we negotiated on its behalf are being enforced, the sooner we shall restore confidence to the industry.

Will the Minister of State appreciate that the British textile industry is probably in the most parlous state in its history? I understand that mills are closing at the rate of one per week. In those circumstances, will he undertake to consider a recession clause or some other device to tighten up the operation of the MFA?

I agree that the fundamental mistake which was made by the right hon. Gentleman's Government was in conceding a continuing increase of the share of the market regardless of whether the market expanded. That was a mistake made by his Government, with which we are having to live. We hope that we can learn from their mistake.