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New York Speech

Volume 167: debated on Wednesday 14 February 1990

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To ask the Secretary of State for Trade and Industry if he will place a copy of his recent New York speech in the Library.

I have already done so.

In the New York speech the Secretary of State acknowledged that every trading nation had something to gain from lifting trade barriers. However, on textiles he seemed to leave the initiative in the hands of the American negotiators in terms of the current GATT round. It would be interesting to hear the American view of the current textiles position in the GATT round. Will the Secretary of State give an undertaking that he will not begin to dismantle the framework of the multi-fibre arrangement until the United Kingdom textiles industry obtains copper-bottomed guarantees of new export opportunities to new trading countries?

I am grateful for the hon. Gentleman's interest in my speech. I note his liberal attitude to trade liberalisation. The position of the United States Administration is in one respect similar to that of the European Community. It is that the trade in textiles should in due course be returned to the GATT and that a considerable transitional period will be necessary. There is most dispute about what the interim regime should he. The Americans want global quotas, a solution which is unattractive to the other trading partners. The negotiations will be about a system of safeguards and the length of the transitional period. There is agreement that in due course, after a proper transitional period, textiles should return to a more free trading atmosphere.

Was not one theme of my right hon. Friend's excellent speech the opportunities for world trade and prosperity that come from the single market, the Uruguay round and the changes in eastern Europe? Was not a second theme of his speech the dangers of protectionism? Does he agree that that is a great danger to world trade and prosperity from whichever side of the Atlantic it comes?

Both points are correct, but I sought to make a third point—that freedom to invest freely in those countries is an important way for both partners in the transaction to prosper. I criticised the United States tendency to restrict inward investment, but I am sure that the Administration there will ensure that those tendencies are resisted.

In that wide-ranging speech in New York, why did not the Secretary of State explain that Britain has the worst inflation, the highest interest rates and one of the worst trade deficits of our major competitors? Will he now confirm not only that mortgage rises have put 400,000 families into mortgage arrears of two months or more, but that the latest figures from the Lord Chancellor show that there has been a 46 per cent. increase in small business liquidations over the last quarter? As Secretary of State for Industry, will he press the Chancellor for a Budget for industry that will help to bring interest rates down?

There are two reasons why I did not make those points in America. First, it is not my habit to knock my country from abroad. Secondly, the particular copy with which the hon. Gentleman suggests I should knock it is inaccurate and untrue. The hon. Gentleman is always in the business of measuring the gross, not the net. If he examines the net survival of small businesses, he will find that it is very much better than under the Labour Government. If he also examines the total of the mortgage sector, he will find the same.

Does my right hon. Friend agree that one problem may be that, because of the two Germanys' headlong rush to merge, the deutschmark will weaken, and Germany will become even more competitive than at present with its £46 billion trade balance? Does my right hon. Friend have anything in mind to make sure that our manufacturers are not more disadvantaged than they are already?

I think that the deutschmark has strengthened on the latest news, although I am not in the business of forecasting what will happen in view of the events described by my hon. Friend. Policy on eastern Europe is not particularly relevant to the value of the pound in relation to the deutschmark. I am confident that British exports will maintain their good record and their good showing whatever happens in East Germany.