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Volume 113: debated on Wednesday 25 March 1987

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asked the Secretary of State for Trade and Industry if he will make a statement about the current balance of trade with Japan.

From the provisional figures for the 12 months ended December 1986, United Kingdom trade with Japan showed a balance of trade deficit of £3·7 billion.

I thank my hon. Friend for his reply, although it brings me no comfort. What evidence is there that the various undertakings that are contained in the Japanese action programme to facilitate the access of British imports to Japanese markets have been honoured by the Japanese?

Does the Minister accept that in the constituencies of various hon. Members there are electrical appliance industry and other interests which are very concerned that the Japanese people and their Government, while making encouraging noises about their desire to import, nevertheless impose such stringent and sometimes ludicrous conditions regarding the safety of various appliances that they seldom, if ever, get into Japan? If we in this country were to impose such stringent conditions as theirs, there would hardly be a Japanese product that could enter the United Kingdom.

The right hon. Gentleman is entirely right. He cites one example of, I am sorry to say, a large number of British goods that would otherwise be competitive but that are excluded by Government or quasi-governmental devices.

Will my hon. Friend take this opportunity to condemn the Japanese Ministry of Posts and Telecommunications action in blocking Cable and Wireless investment and United States investment, as allowed by Japanese law? Will he also take this opportunity to say what he hopes Her Majesty's Government can do, in the face of this acid test, to persuade Japan to allow British investment in that country?

This is certainly an exemplary situation, which completely encapsulates the Japanese attitude and the difficulty of breaking into a most important sector. The British Government have been active. My right hon. Friend the Secretary of State—[Interruption.] I do not understand why the Opposition are reacting in this way. This is practically the most serious single topic with which we are dealing. [HON. MEMBERS: "What is the hon. Gentleman going to do about it?"] I am telling hon. Members what we have done. My right hon. Friend the Secretary of State wrote to Mr. Karasawa on 13 February. He received no reply. My right hon. Friend the Prime Minister wrote to Mr. Nakasone on 4 March and has had no reply. I know that a number of senior members of the American Administration have also written about it. [Interruption.]

I assume that the Opposition's attitude is good-natured, but I detect in it a strong undertone of indignation, which I know is shared on this side of the House. In the course of time this level of indignation, which is widely held in this country, in the Community and in the United States, will finally find expression —[Interruption.] Hon. Members know very well that in GATT, in the Treaty of Rome and in all our treaty obligations there are very powerful restraints on retaliatory action, but the House is demonstrating this afternoon a level of indignation that ultimately will make such action inevitable.

Is the Minister aware that if I were standing in his shoes at the Dispatch Box answering questions in that way I would be thoroughly ashamed of myself? I thought that the Government were asking people to buy British. How can they when they look in the warehouses, the retail outlets and the shops and all the goods are made in Japan? Why does the Minister not take the short walk to No. 10 and tell the Prime Minister that he has failed in his duty and resign?

I notice that neither the hon. Gentleman nor his hon. Friends actually come out and recommend import controls—or do they?

May I say how refreshing I find the candour of my hon. Friend the Minister? May I also say that expressions from the Opposition Benches about this unsatisfactory situation are not just widely, but are wholly, shared by Conservative Members? The Japanese Government must be given to understand that their behaviour in this regard militates against a healthy and natural expansion of the world economy. They are not serving their own interests in the long run and we hope that the day will come quickly when Her Majesty's Government, in company with our partners in the Community, will be able to get some effective action against these pirates.

I am grateful to my hon. Friend for his support. For some reason, Opposition Members refuse to acknowledge that there is a comprehensive system of international trade treaties which regulate world trade. These treaties have been built up over a long period to restrain and deter trade wars. Where one country deliberately flouts, ignores or circumvents that system, it has only itself to blame for the consequences. To put those consequences in order—[Interruption.]

I do not object to what Opposition Members are doing; I welcome it. This indignation, which has not been shown in the House before, is timely and is a great help. But hon. Members and the House must realise that to take action involves a consensus of agreement with our trading partners. It involves getting the United States and the Community on side, and it may ultimately involve action outside GATT.

Miti and Japan are planning world domination through trade. Their respect for international conventions, as the Minister will know, as a historian, is hardly honourable. There are the examples of non-tariff trade barriers, the dumping of credit and the capturing of international markets. We have Nomura moving into the City of London and the financial institutions from Japan are moving to take over the City. If my hon. Friend wants a weapon, he has it there. Tell the Japanese to take their financial operations out of the City, remove their trading markets and let them go home.

My hon. Friend is quite right. Indeed, the principle of reciprocation is embodied in the Financial Services Act. This is the one sector where we have the possibility of immediate retaliation where appropriate. My hon. Friend the Under-Secretary is going to Japan in a few weeks' time and he will make that perfectly clear.

Does the Minister understand that, having invited the House to be indignant, he has now heard its indignation expressed clearly and forcefully? Does he appreciate that, for a Government who have been in office for eight years, it is not good enough for them to come to the Dispatch Box and wring their hands about the difficulties in dealing with the Japanese? Let me tell him what he might consider doing—do to the Japanese what they do to us.

I wish that I could. As the right hon. Gentleman well knows, we do not have at our disposal the same kind of administrative machine as the Japanese, and that at present we are constrained by a whole range of international treaties, to deviate from which would require the consent and approval of our partners.