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caused by the fact that the countries concerned are low-cost countries, many of which have much lower wage costs than ours. That is the essential difficulty, and we should not blind ourselves to its importance.

As a major derogation from GATT, the MFA has always been seen as a temporary arrangement, designed to give industry in developed countries a breathing space in which to adjust to new competition. GATT Ministers are generally already committed by the Punta del Este declaration--made at the start of the Uruguay round of multilateral trade negotiations--to phasing out the MFA on the basis of strengthened GATT rules and disciplines. That, I believe, is the way forward. Exactly how it will be dealt with is the subject of negotiations that will continue throughout the round, but the European Community has repeatedly made it clear that the phasing out of the MFA must be accompanied by a reinforcing of those GATT rules and disciplines.

It is our firm objective to achieve, in particular, a more effective safeguard to protect against sudden surges of imports, to improve provision to deal with unfair trade and intellectual property rights, and to provide greater access for our exports to developing-country markets--particularly the more developed ones--through a reduction in their own tariff and non- tariff barriers. The Commission also maintains--and this is generally accepted in GATT--that there must be a gradual transition towards the full integration of the textiles and clothing sector into GATT. That would give industry a further period in which to adjust ; the length and nature of that period is, however, a matter for negotiation. It would be wrong for me to try to persuade the House that the MFA will be extended permanently, for that is not the case. The plain truth is that this aspect of trade must be brought within GATT, but, to the extent that it is necessary, GATT rules must be strengthened to provide more safeguards in the respects that I have identified, and also to allow a proper period of transition.

Mr. Latham : I hope that we can get one point absolutely clear--that there can be no question of British Ministers allowing the MFA to expire until new Uruguay rules are firmly in place.

Mr. Hogg : My hon. Friend makes a powerful point, but it must be resolved within the context of the negotiations in GATT. In the end, it will be a GATT decision. British Ministers will urge the case as best they can, but the decisions will be made in GATT, and--as my hon. Friend will appreciate--we do not have an automatic or self-evident veto.

Meanwhile, there are steps that we can all take to assist the industry-- and, primarily, that the industry can take to assist itself. I shall not go into much detail, because the hour is late, but there is scope for further research and development. There is, indeed, scope for collaborative ventures in which the Government are prepared to play a part. I am somewhat disappointed that there are not more applicants for assistance in that regard, and I should like to think that further applications will be presented for appropriate schemes. We can also do a certain amount to improve the industry's competitiveness--for example, through the consultancy initiative. We have also participated with the working groups in an effort to expand exports and encourage improvements in design.


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We have to look forward to the time when the industry will be working within the general GATT rules and trying to make itself more competitive by focusing its efforts on those parts of the market where Britain has an obvious lead. To suppose otherwise is to peddle an illusion. I know that neither my hon. Friend the Member for Rutland and Melton nor the hon. Member for Leicester, East wishes to do that. It is a serious problem, but it will not be solved by peddling solutions that do not achieve that purpose. It can be solved only by trying to make the British industry as competitive as any in those sectors where there is a reasonable prospect of survival. I invite hon. Members to agree that that is the way forward. Question put and agreed to.

Adjourned accordingly at fifteen minutes past Twelve o'clock.


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