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Japanese Light Vehicles

Volume 15: debated on Monday 14 December 1981

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12.

asked the Secretary of State for Trade what is the level of penetration of the United Kingdom market by Japanese light vehicles.

Nineteen per cent. of the light commercial vehicles registered in the United Kingdom in the first 11 months of this year were manufactured in Japan.

Is such a high level in the interests of the United Kingdom economy as a whole? If it is not, what action will my right hon. Friend take, bearing in mind the action that the Japanese take against United Kingdom exports, especially of footwear?

The Society of Motor Manufacturers and Traders, which is responsible for the voluntary restraint arrangement that we have with Japan on these matters, has itself been involved in discussions with its opposite number in Japan. It has stated that the understanding that has resulted from its recent meeting should mean a sharp decrease in the Japanese share of the light commercial vehicle market.

Does not the right hon. Gentleman agree that we have now reached the stage with the Japanese, with all the hidden trade barriers that there are to exports from this or any other country to Japan, where we should tell the Japanese that we shall import one Japanese vehicle for every vehicle that they import from Britain?

I cannot think of a narrower, more unilateral approach to trade. The fact that the hon. Gentleman represents the soft Left reminds us how terribly difficult things must have become.

Will my right hon. Friend remind the House of the precise nature of the restraint agreement with Japan about the level of British imports of light vehicles?

It is an arrangement conducted between the SMMT and JAMA, its Japanese equivalent.

Is the right hon. Gentleman aware that the market of BTB Engineering Ltd., a firm in my constituency that manufactures light vans, has been adversely affected by the continuing and rising imports of light vans from Japan? What positive hope can he offer to the employees of that firm and many others in the country that make light vans? When will we get from the Government the same tough approach to imports from Japan as has been shown by both Right and Left Governments in France?

I cannot give the specific message to the hon. Gentleman's constituents that he seeks, but I can tell him that the SMMT has said that it is

"clearly satisfied with the outcome"
of the latest agreement. If one is obliged to have such trade restraints it is far better done in that way than by arbitrary Government quotas and tariffs.

Does my right hon. Friend agree that it is better for such agreements to be left to the industries to negotiate than for Governments to interfere, even if, as is the case with light commercial vehicles, one of our major manufacturers is a significant importer of Japanese products?

I am reluctant to give an off-the-cuff reply to the main part of my hon. Friend's question. I am not a great enthusiast of government by trade association, but any arrangement that involved the Government taking unilateral action could easily provoke counter-action under article 19 of the GATT, with serious and harmful consequences for our national economy. That is something that we have experienced.

With regard to the right hon. Gentleman's remarks to my hon. Friend the Member for Warrington (Mr. Hoyle), is it not crystal clear that the Japanese attitude to external trade is somewhat unilateral in character, in the sense that they have a low level of manufactured imports? Is it not also clear that, because our level of exports to Japan is so pitifully low, the scope for retaliation is necessarily limited? Will the right hon. Gentleman confirm that it is necessary continuously and relentlessly to put the maximum amount of Government pressure on the Japanese to get them to alter their attitude to world trade?

As a distinguished Scotsman, the right hon. Gentleman should not be too flippant about the ability of the Japanese to take harmful trade retaliation measures against us. The Scotch whisky industry is particularly well established in that market. Indeed, Scotch whisky is our largest single selling item in Japan. I believe that the most helpful way forward is to open up the Japanese market to our exports and for us to welcome Japanese investment in this country.

The Secretary of State may be right to reject the idea of a narrow. unilateralist approach to trade, and he frequently shelters behind the Commission's responsibility, but will he confirm that we are the most open market in the Community and that the French, Germans, Italians and everyone else in the Community seem much more capable of reducing Japanese imports, without facing any risk of retaliation?

It is a matter for genuine debate whether the United Kingdom is a more open market to the Japanese than is Germany.