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West Germany (Trade Deficit)

Volume 15: debated on Monday 14 December 1981

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7.

asked the Secretary of State for Trade if he will take steps to discuss with the Government of West Germany the deficit in manufactured trade with that country of over £2,000 million in 1980 with a view to improving the balance of trade.

No, Sir. With Western European countries our trade in manufactures largely reflects competitive differences.

Since the Foreign Secretary has already stated that our deficit with Japan of about £1 billion last year is costing this country tens of thousands of jobs, should not the Government consider seriously the horrendous £2 billion deficit with West Germany—the greatest deficit with any country? Will they investigate particularly whether any of that deficit stems not from competitiveness, but from non-tariff discrimination?

The two situations are simply not analogous. Japan has a well-established resistance to taking imports, as a result of which only 3 per cent. of its economy is accounted for by manufactured imports, whereas West Germany has a more open economy, taking over four times that percentage. That is an indication that we are in a free trade position where it is up to our manufacturers to do as well as they can.

Does not that deficit show how wide of the mark was the hon. Member for Hint, West (Sir A. Meyer) in his intervention?

I am not sure upon what nuance the right hon. Gentleman is seeking to alight, but I am certain that my hon. Friend the Member for Flint, West (Sir A. Meyer) is right in saying that our trading role in Western Europe will be largely a factor of our competitiveness.

Does the right hon. Gentleman agree that, in line with his remarks, the EEC has been a disaster for this country? Does he further agree that now is the time to introduce import controls on exports of motor vehicles, electronics, and so on, particularly from West Germany? Would that not be of great benefit to British industry?

I am sure that the experiences of the EEC are a disappointment for those who had euphoric expectations. When we come to apply descriptions the word "disaster" will relate to those who seek to introduce trade controls and import restrictions.

Will not that deficit figure and others of an equally depressing character disappear rapidly when the term "strike command" becomes associated once again with the Royal Air Force rather than the Transport and General Workers Union?