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Volume 19: debated on Monday 1 March 1982

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asked the Secretary of State for Trade what steps he is taking to redress the imbalance of trade with Japan.

The Government—along with the rest of the European Community—are continuing to press the Japanese to open their market to our manufactured goods and to limit exports in sensitive sectors. The Japanese Government have recently announced a number of measures to improve access for imports from overseas, but I made it clear in Tokyo last month that, while I welcomed these steps, much more would need to be done.

Does the right hon. Gentleman agree that he has perhaps made a mistake in his softly-softly approach, particularly as there is an adverse trade balance of more than £1 billion? The Japanese will always parley while they take the barley. Does the right hon. Gentleman further agree that it would be best to say to the Japanese that we will import as much from them as we export to them—no more, no less?

That would be a dubious proposition from a country that has so much to gain from multilateral trade. The only approach that has any likelihood of success is one that links the interests of the West European nations and the United States. That will remain the centrepiece of our approach

As our deficit in manufactures with Germany last year was twice what it was with Japan—£2 billion—what is the logic of insisting on voluntary restraint on Japanese imports but not on German imports?

There are three reasons. First, Germany does not have the massive balance of payments surplus that is causing difficulty to other countries. Secondly, Germany has an open market for British goods. If we have the competitive skills, we can sell on that market. Thirdly, German penetration of the United Kingdom market is not based on a narrow range of items.

Has not the Director General of Fair Trading, under section 2 of the Competition Act 1980, the power to prevent the distribution of dumped goods where they distort trade and where such action can be construed as an anti-competitive practice? Will the Secretary of State suggest to the Director General that he should use those powers and accept applications by British manufacturers of, say, footwear, who are in competition with Japan, to restrict the flow of such products to British markets?

I shall look into that important, though somewhat. esoteric, point and write to the hon. Gentleman when I have concluded my investigations.

In view of the marked difference of opinion among anti-Marketeers as to whether Japan is more to blame than the EEC, is it not safer to cling to the conclusion that we need open trading and that there is no substitute for that for a country, such as ours, that depends on exports?

Yes. I have a great belief in open trading, although it is qualified in certain circumstances, as with the MFA and, indeed, trade with Japan.

Is the Minister sure that restricting Japanese imports is not a puritan attitude?