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Criminal Evidence (Prohibition of Sale)

Mr. Parmjit Dhanda accordingly presented a Bill to prohibit the sale of evidence gathered during criminal investigations or used during criminal proceedings: And the same was read the First time; and ordered to be read a Second time on Friday 10 May, and to be printed [Bill 109].

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US Tariffs (Steel Imports)

4.24 pm

The Secretary of State for Trade and Industry (Ms Patricia Hewitt): With permission, Mr. Speaker, I would like to make a statement about the announcement made last night by President Bush on his decision to impose a range of tariff measures that would severely restrict United States imports of steel products from the rest of the world. These measures will impose additional tariffs of between 8 and 30 per cent. on products that account for some three quarters of US steel imports. They will effectively close the American market to many products.

My right hon. Friend the Prime Minister and I are extremely disappointed that President Bush has taken this action in the face of united international opinion. It is wholly unjustified at a time of falling American imports and rising prices. In our view and that of the European Commission, it is a clear breach of the United States WTO obligations. As well as having an international effect, steel import restrictions will raise costs for American industry to the detriment of consumers and the American manufacturing sector overall. Import restrictions will also only delay much-needed steel restructuring and hurt the American manufacturing sector just at a time when it appears to be rallying from the economic downturn.

My right hon. Friend the Prime Minister, myself and a number of other Ministers have been in frequent touch with the highest levels of the American Administration since last July, when the investigation by the US International Trade Commission was announced. That has continued throughout this week, when I have twice spoken with the American Commerce Secretary, Donald Evans. We have all made it very clear that measures restricting imports would be quite the wrong response to problems that are faced by parts of the American steel industry. We have also stressed to the American Administration that this is more than an issue between the European Union and the United States. The American action, in clear disregard of international opinion, risks undermining the good work that was done a few months ago to achieve the Doha launch of a new round of trade liberalisation. Why should developing countries commit to free and open markets when the United States closes its domestic market to address a problem that many see as largely of the American industry's own making?

Of course, there are also real issues in the global steel trade market, including excess capacity and market- distorting subsidies, but they are best addressed multilaterally through the discussions that have been convened by the Organisation for European Co-operation and Development with our full support. Until now, those discussions have been making good progress, but although we hope that that effort can continue, the American action risks jeopardising that progress.

Most of all, however, I am concerned—as every Member of this House will be—about the impact that these American measures will have on the British steel industry and steelworkers. We have one of the most efficient and productive steel-making industries and work forces in the world. That achievement has been a very painful process. Some 86,000 steel jobs have been lost in Britain since 1980 and some 10,000 have been lost in the

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past 18 months. All of us in this House know how tough that has been for workers who have lost their jobs and for their families and communities. We also know what the Government have done to see them through those difficult times. But the outcome is an efficient and productive industry that is able to compete effectively in world markets. We are not prepared to allow the United States to try to dump its problems on the rest of the world instead of facing up to the challenge of modernising and restructuring its industry.

The steel curtain that the American Administration have brought down threatens our industry in two ways. First, it will directly affect some of our exports. Three quarters of all UK steel production is sold in the European Union, including the UK. About 9 per cent. of our total production is exported to the United States, and about 4 per cent. will be affected by the American tariffs. One especially significant UK export product—hot-rolled bar and cold-finished bar—will be subject to a prohibitive 30 per cent. tariff. Given the current state of our steel industry, that will have a devastating effect on many of our companies and their workers. Secondly—this is potentially even more damaging to UK and other European industry—there is the proposed 30 per cent. tariff on flat steel products. There is a serious risk that when the tariffs take effect on 20 March, the British and European markets will be flooded by exports of these products from third countries, mainly in the far east, that would otherwise have sold to the United States.

We will stand by our steel producers in combating this unjustifiable and deeply regrettable action. I therefore fully support today's announcement by EU Trade Commissioner Pascal Lamy that he will request immediate WTO dispute settlement action. Indeed, he has already done so. The first step in this is a 60-day consultation period with the United States, but, unless the American Administration are prepared to rethink their action, a WTO disputes panel will follow. Realistically, this case—which I am confident the European Union will win—will take some considerable time, perhaps up to two years. We are not prepared to stand by while British industry and jobs are put at risk for that length of time.

I can confirm that Commissioner Lamy, to whom I have just spoken, is already considering appropriate and urgent action to be taken to safeguard British and European steel producers and workers against a flood of steel imports. Indeed, we were already pressing the Commission last week to be prepared to take such action in the event that the Americans took protectionist measures of this magnitude.

Let me stress that safeguard action is allowable under WTO rules, where it is intended to protect countries from surges in imports that cause, or threaten to cause, serious injury. That does not mean that we are simply copying the American actions of which we are so rightly critical. We would much prefer not to have to take any action. Our trade policy is to promote open and fair global markets, but, in circumstances in which the British and European marketplace could be flooded by steel imports as a result of American action, we are forced to consider appropriate and proportionate action to protect our own industry and its work force.

I very much regret being forced into safeguard action. This would be the first time that any safeguard action had been taken by the European Union since the present regulations came into effect eight years ago. I particularly

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regret that it is the United States that will have prompted this action. Only four months ago, we were working closely with America, and with developing countries, to launch a new round of world trade negotiations. We will continue to work for free and fair trade around the world, because it is in all our interests—those of the developed countries and the developing countries alike—to achieve that. We will also continue to stand up for the interests of the British economy and British workers at home and abroad.

Mr. John Whittingdale (Maldon and East Chelmsford): Although I extend the usual thanks to the Secretary of State for letting me have a copy of her statement in advance, may I express regret that she did not see fit to apologise for the fact that it did not arrive until 10 minutes before the Prime Minister sat down? May I ask you, Mr. Deputy Speaker, to convey my thanks to Mr. Speaker for making it clear, by bringing forward the ten-minute Bill, that that kind of discourtesy is unacceptable to the House?

Having said that, I welcome the fact that the Secretary of State has come to the House to make this statement, in contrast to her failure even to attend the debate that took place here on this issue last night. First, I would like to make it clear that the Conservatives join the Government in condemning the action taken by the United States Administration. The import tariffs that have been announced will do nothing to help the steel companies in the United States that are suffering from competition from more efficient producers at home, and they will also push up raw material costs for many more American companies that use steel. However, although this action may prove damaging to the American economy, there is no doubt that the effect on the steel industry in this country will be devastating, putting at risk yet more jobs, on top of the thousands of redundancies that have occurred in the last two years.

We therefore support the action taken by the European Union to lodge an immediate complaint with the World Trade Organisation, which must be the right place to resolve disputes of this kind. Does the Secretary of State agree that, while it is right to take action to protect the steel industry from a further flood of cheap imports that have been displaced from American markets, it would be entirely wrong for us now to impose retaliatory measures that could lead to an escalating trade war? Will she remind President Bush of the commitments that he has made in the past to the cause of free trade?

I join the right hon. Lady in expressing great concern that this latest action might put in jeopardy the achievement of a new world trade agreement, after the encouraging start that was made at Doha. However, although she is right to say that this matter will be dealt with by the WTO, she is also correct to say that we simply cannot afford to wait the two years that it usually takes for that organisation to reach a judgment. Will she therefore make every effort to ensure that the matter is dealt with as quickly as possible, and, even at this eleventh hour, press the United States Government to hold back from implementation of the tariffs? If that cannot be achieved, we will reluctantly support the taking of safeguard action, but will she confirm that that action will be measured and permissible under WTO rules?

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Will the Secretary of State explain why, during the many conversations that have taken place between the Prime Minister and President Bush in the past six months, the Prime Minister did not raise this matter with the President until last week? It has been clear since July, as she said, that the American Government intended to take this action, yet it was seven months before the Prime Minister wrote to President Bush to press him to reconsider.

Is the Secretary of State aware of the glaring contrast between the lack of urgency shown by the Prime Minister in defending the steel industry in this country, and the alacrity with which he was willing to write to the Romanian Prime Minister to promote the interests of an overseas company which happens to be owned by a major donor to the Labour party? Is she aware of the anger felt today by steelworkers in Britain about the fact that the Government have been helping Mr. Mittal, a foreign- based competitor who has been actively campaigning against British interests by giving $600,000 to the campaign that is lobbying for tariffs in the United States?

On the radio this morning, the Secretary of State tried to claim that the American subsidiary of Corus had also supported that campaign. Does she now accept that that is completely untrue? Does she accept that the president of Corus Tuscaloosa wrote to the American Iron and Steel Institute making it clear that the firm was totally opposed to the introduction of tariffs, and would not support the AISI in the matter?

Is this not another instance in which the Government's attempt to justify their actions has been shown to be wholly incredible and based on a complete distortion of the facts? Will the Secretary of State therefore apologise to Corus, and to all who work in the steel industry in this country, for the support that her Government have given to a company whose actions may directly contribute to the loss of their own jobs?

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