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Ms Hewitt: Of course I regret the fact that my office was unable to give the hon. Gentleman a copy of my statement any earlier this afternoon, but I know he will understand that my first priority was to ensure that we understood precisely the details of what the American Administration are proposing, how that would affect our industry and how we could best deal with the situation. As for yesterday's debate, my hon. Friend the Minister for Industry and Energy was present throughout.
I welcome the hon. Gentleman's support for the action that we and the European Union are already taking in response to the American action. There will be no tit-for-tat retaliation. We will not respond to the American Administration's flouting of the WTO rules by flouting them ourselves. We will of course continue to press the American Administration, even now, to back off from the actions that they have announced, just as we will continue to press for exemptions of products that are of particular significance to the British steel industry. We will, however, also start urgent discussions with the European Commission and our European colleagues to ensure that we do, if necessary, take the appropriate safeguard action—as permitted by the WTO rules—to protect our industry and our workers from a flood of imports.
The hon. Gentleman asked when the issue was pressed with the American Administration. As my right hon. Friend the Prime Minister made clear this afternoon, I first
raised it at senior Administration levels last July. It was not at all obvious at that point that the Administration would pursue this course, and for many months—through me, through other Ministers and through the embassy—we continued to try to persuade the Administration that they should not risk the consequences of this retreat into protectionism. As my right hon. Friend the Prime Minister confirmed this afternoon, when it became more likely that the Administration would take this action, he raised the matter directly with the President.On the enormous pressure that trade unions and trade associations in the United States have put on the American Government, all companies operating in the American steel sector are in fact members of the trade associations that lobbied for those tariffs. Indeed, I made precisely that point this morning. Corus and Corus UK in particular have made it very clear that they are against that action.
We hear synthetic anger from the Opposition about donations and job losses in the steel industry, but they did not care about such losses when they were in government and devastating the British steel industry. Let me make the matter clear once again: donations to political parties have nothing whatsoever to do with Government policy. At any rate, they have nothing whatsoever to do with our Government's policy. We have no idea what influence political donations had on the policy of the previous Conservative Government, for the simple reason that they and the Conservative party flatly refused to publish any information on donations, whether British or foreign. We will therefore take no lessons from Conservatives on party political funding. It is this Government who have made party political donations transparent.
We will continue to support the Romanian Government's efforts to open up their economy and modernise their industry because it is in Britain's interest for Romania and other candidate countries to join the European Union and become more prosperous themselves. I suspect, however, that the hon. Member for Maldon and East Chelmsford (Mr. Whittingdale) is unaware that America has exempted Romania and the other candidate countries from those tariffs precisely because their exports to the United States—like those to the European Union—are too small to be of any significance.
Mr. Martin O'Neill (Ochil): Does my right hon. Friend agree that there can be no winners in a trade war involving the imposition of tariffs, and that we must try as quickly as possible to stop it? Let us not forget that there are 30 days in which a great deal of work can be done. I urge her to ensure that the European Union carries a big stick, and wields it if necessary. In circumstances such as this, the Americans must be made to understand that we are not a soft touch, and that the WTO will come down on them like a ton of bricks. It will not be the workers of Ohio or West Virginia who will benefit from such action.
Ms Hewitt: I entirely agree with the points that my hon. Friend has made. Of course, neither the United Kingdom nor the European Union will be a soft touch on this matter. We have supported the strengthening of the WTO, and we believe in a proper framework of rules for free and fair trade, and in the use of WTO procedures when concerns exist about imports. We completely reject
the actions of the American Administration in flouting WTO rules. They have put at risk a new round of trade liberalisation, which, if successful, could benefit the entire global economy. We will stand up vigorously for the interests of our workers and companies.
Dr. Vincent Cable (Twickenham): I echo the comments of the Secretary of State and the hon. Member for Maldon and East Chelmsford (Mr. Whittingdale) about the American action. It was indeed reckless and stupid in economic terms, and it threatens to contaminate the international trade negotiating process. The Americans are sending the message, "Don't do as we do, do as we say." That combination of hypocrisy and bullying will do much damage to international trade.
However, I want to part company with the Secretary of State and the hon. Gentleman on the issue of retaliation, and in that regard I totally endorse the comments of the hon. Member for Ochil (Mr. O'Neill).
If the 30-day period expires without any sign of reasonableness from the American Administration, is the Secretary of State aware that under the article 19 action, which the Americans have taken—so-called selective safeguard action—it would be entirely legitimate for countries damaged by that process to take retaliatory action? She has seen the impact of smart sanctions from the US in the form of the so-called carousel that they operated in the banana dispute, so I wonder why she and the EU are not preparing a list of comparable sanctions to take against specific American targets, if they do not back down in this dispute.
I also part company with the Secretary of State and with the Conservative spokesman—
Bob Spink (Castle Point): The Opposition.
Dr. Cable: Yes, I part company from both of them on the issue of safeguard action. Will she accept on reflection that that is potentially a dangerous and counterproductive approach? Introducing safeguard action against all steel coming into the EU would do nothing to hurt the US, and would penalise steel-using industries in Britain, which would create unemployment because they are more labour intensive than the steel industry. It would be a reflex action that would be economically damaging.
The Secretary of State said a few moments ago that the Americans had exempted east European products from their action. Would that exemption also apply to the EU safeguard action, because the east European countries are directly in the line of fire? The Secretary of State may recall that the Sidex plant is underwritten by a European Bank for Reconstruction and Development loan, on the basis that eastern European producers will continue to have access to the European market. Can she confirm that she has checked out that point?
Ms Hewitt: I am grateful to the hon. Gentleman for his general support for the stance that we have taken, but I confirm again that, unlike the American Administration, we will act in conformity with the WTO rules. The hon. Gentleman may recall that at the time that the American Administration were engaged in carousel retaliation we strongly expressed the view that that retaliatory action was contrary to the WTO rules. We will act within those rules, which explicitly allow countries to take action to
protect their markets against an unforeseen and sudden surge in imports. It is ironic, as the hon. Gentleman implied, that President Bush has relied on the same clause in an attempt to justify his action, when of course steel imports into the US fell by 21 per cent. last year and are considerably lower than they were even four years ago.We will of course look in detail at the points that the hon. Gentleman raises about the precise nature of the safeguard action that we will be forced to take if the Americans decide to persist in this action. At this stage, before we have had detailed discussions with the European Commission and other European member states, it is too early to say exactly what form that safeguard action will take.
Dr. Jack Cunningham (Copeland): Is my right hon. Friend aware that, whatever the nature of the anger from the Conservatives, real and genuine anger will be felt in steel-making communities in Britain at the American action? Is not it insufficient to express regret at the American action, which is intolerable in the circumstances? Is not it dishonest of the American leadership to call for more open markets and more free trade while, at the same time, cynically resorting to classical protectionism of its industries, and not for the first time in recent years? Should not we therefore use every weapon at our disposal under the WTO rules to protect European and other continental markets that will be affected by that disgraceful action, and at the same time, search quickly for actions that we can legitimately direct against the US, while talks with them continue? I hope that my right hon. Friend will believe me when I say that that is exactly what British workers and their families will expect us to do.
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