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Manufactures (Balance Of Trade)

Volume 23: debated on Monday 10 May 1982

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asked the Minister for Trade whether he will make a statement on trends in the balance of trade in manufactures with the European Economic Community.


asked the Minister for Trade whether he is satisfied with the existing balance of imports and exports with the European Economic Community.

The balance has fluctuated as our trade with the European Community has expanded. In 1980 the crude deficit fell to £1·8 billion from £3·1 billion the year before. This is not unsatisfactory in view of the large volume of trade involved and the large surplus on the United Kingdom's overall balance of payments.

Since our Community partners, instead of giving us wholehearted support over our problems with the Falklands, have now decided to put us on probation, will my hon. and learned Friend remind them that if they continue to wet their knickers at the first whiff of unvalidated Argentine propaganda, a lot of the trade benefit that they are getting from our membership of the Community will be put at risk?

I do not think that it is necessary for me to comment on the sartorial position of the Community. My hon. Friend is showing too much concern. It was not intended that any decision should be taken on the extension of sanctions at the weekend meeting near Liege. The Government hope and expect that the EEC's common position on sanctions will be extended. My hon. Friend is right to point out that the United Kingdom market is important to the Continental European members of the Community, just as the European Continental market is important to our exporters.

Will my hon. and learned Friend confirm that in the second part of last year we showed a specific increase in our manufactured exports to the EEC, which I am sure the whole House welcomes, and that to the extent that our manufacturing performance may still be less than we wish it is because of poor productivity in many of our manufacturing areas, which would only worsen our position in the unlikely event of our coming out of the Common Market?

My hon. Friend is right to draw attention to the fact that the EEC is Britain's fastest growing export market. If I may inflict a statistic on the House, 39 per cent. of our exports of manufactures in 1980 went to the Continental European countries of the Community, campared with 29 per cent. in 1972. Echoing the point made by my hon. Friend, there is certainly scope for a further increase in British exports to the EEC and my Department has recently had an "Export to Europe" drive, which I hope will yield good results in the years to come.

Does the hon. and learned Gentleman's Department keep separate trade statistics for Great Britain as opposed to the United Kingdom? If not, will he kindly apply the proper description to this country?

The answer to the right hon. Gentleman's first question is "No". We shall certainly see if we can be more exact in our use of nomenclature.

Does my hon. and learned Friend agree that my hon. Friend the Member for Northampton, North (Mr. Marlow), when he has finished providing The Sun with headlines, might reflect on the fact that this country requires markets for its exports and that it is for those who are constantly asserting the damage that results from our membership of the European Community to explain how a free trade area would resolve any of the problems that we face in our trade with the EEC or how, by sheltering behind a tariff wall, we could possibly find an outlet for our export industries?

My hon. Friend is absolutely right to draw attention to the perils of protectionism, particularly if protectionism were applied by this country to the other countries of the European Community. I have emphasised that our fastest growing and, indeed, our largest, export market is Germany. One can reflect long and hard on the disadvantages to this country if we were on the outside of a free trade area of those dimensions.

The hon. and learned Gentleman will be aware of statements by Ministers representing other countries in the European Community to the effect that there should be a linking between the Community support for Britain over the Falkland Islands and other issues within the Community. Does he agree that it is wrong for such a linking to be made? Surely the Economic Community is supporting the United Kingdom because its stand is correct in terms of international law. Will the hon. and learned Gentleman undertake that there will be no linking of any kind with the basis of support that we receive from the Community?

The right hon. Gentleman cannot have heard the contribution of the French Foreign Minister on "World at One" today when he demonstrated clearly that France sought no such linkage and gave us unstinted support in our defence of an important principle in the South Atlantic.