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Textile Industry: Usa Imports

Volume 416: debated on Wednesday 28 January 1981

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My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether they are aware of the disruption caused to our textile industry by cheap imports from the USA.

My Lords, in my Statement to your Lordships on 15th December I stressed that Her Majesty's Government were extremely concerned about the damagingly sharp rise in the import of textiles from the United States. I am happy to say that on the following day my honourable friend the Minister for Trade secured the unanimous agreement of the Council of Ministers of the European Communities that a new and urgent initiative was needed. The Commission was accordingly invited to pursue discussions with the United States Administration over the whole range of problems and possible solutions and to report back to the Council as early as possible, with a first report in February.

My Lords, I am very grateful to the noble Lord for his reply and very pleased to hear that meetings are taking place. Will he confirm that the February meeting would be of an interim nature, and that it is essential that in the March meeting we come to some firm and positive action?

My Lords, it is certainly the case that the report to be received in February will be of a preliminary nature. I cannot promise that the matter can be resolved as early as March, but I know that the officials concerned are well aware of the need for urgency.

My Lords, is the Minister aware that these subsidised exports from America have already destroyed two-thirds of our carpet industry?

My Lords, I think the noble Lord over-states the position somewhat. On the point of subsidy, we understand that the new American Administration plan to deregulate oil prices, and that will certainly have an effect in this area because that is of course an essential feedstock in this industry. Also, penetration of the British carpet industry by the American carpet manufacturers is not as great as some people have supposed.

My Lords, is the noble Lord aware that, while many of us from the North are deeply concerned about the plight of our textile industry, many of us are utterly opposed to tariffs and protectionism but believe that unfair competition is a very different matter? Does the noble Lord agree that subsidised supplies of energy are a form of very unfair competition, and that the fact that we took too little action over unfair competition from Portugal and other places in the past does not mean that we should turn a blind eye to what our American friends are now doing?

My Lords, I think the noble Lord in his earlier remarks reflected the Government's position precisely. We certainly do not seek any form of protection in this matter, but we do seek to correct any situation where unfair competition appears to arise.

My Lords, will the noble Lord confirm that no approach has yet been made to America and that the whole of the negotiations are to be carried on through Brussels, as we would expect? But has it not been possible to make some contact on particular aspects such as the carpet industry which are in a sense a special case? Does the noble Lord realise that the matter is one of imperative urgency, and a statement in February to be followed by approaches after that may not be immediate enough?

My Lords, I agree that there is a considerable degree of urgency in this matter, but we certainly have no power to act unilaterally with the United States, which is what I think the noble Lord was suggesting. It is perhaps worth getting this matter in context, particularly in relation to carpets which the noble Lord and another noble Lord mentioned. Imports of man-made fibre tufted carpets from the United States in the first 10 months of last year amounted to 7.2 million square metres, representing an import penetration of only 9.8 per cent. This is only slightly higher than the import penetration at the end of 1979, and it was on that basis that our application for quotas last year was rejected by the Community.

My Lords, it is reported that the new American Administration will within the next few days do away with controls on the prices of domestic petroleum products. Can my noble friend confirm that that is due to happen very shortly, and have the Government yet calculated to what extent the subsidy to American manufacturers will be reduced by that change?

Yes, my Lords. I understand the deregulation is likely to occur even sooner than my noble friend suggests—in fact this very day, so I am informed. On the question of the percentage, there is some difference of opinion between ourselves and the United States authorities on this matter, but our calculation is that their energy policies result in a price advantage of between 8 and 16 per cent.

My Lords, has the Minister taken up with the Commission and with our friends in Europe the necessity to speed up the procedure? It is all very well to say we are now making some progress, but the energetic people who have invested money, for example in the polypropylene process, have been suffering from this situation for well over a year, and only now do we see some signs—

I was explaining exactly what I meant and going into some detail because of the need to do so. What action are the Government taking to do something to speed up the procedure, from which able and energetic people are suffering and have suffered for some time?

My Lords, the decision in the Council of Ministers to take action in this matter was made on 16th December. Since then, as the noble Lord will know, there has been a change of Administration in the United States and officials are expecting to resume discussions just two weeks from now. I do not think that that is a bad record.

My Lords, is the noble Lord aware that, as regards actions in international organisations, the interval between references to the Council of Ministers, or whatever it may be, and relevant action is so long that action ceases to be relevant? These references are no substitute at all for action by Her Majesty's Government, which is what I gather is being asked for.

My Lords, as I said earlier, Her Majesty's Government cannot act by themselves in this matter. We have to act through the European Community. But in the short time that I have been working both in the Foreign Office and more recently in the Department of Trade I have come to realise what a great deal of preparatory work is necessary for these negotiations to be successful.