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When Mr. Meacher said in the debate that
"the MFA does not provide adequate protection for our domestic industry during a recession. The importing countries receive a guaranteed annual growth rate of 6 per cent in good times and bad. This means that the brunt of the recession is borne by the domestic producer;"
I think he must have been looking at value figures, like the man who wrote "Never mind the exports, feel the gap" in the Economist (26 March, p.120). This latter said that imports from HK increased by 40% in 1976. This apparent increase was due to a combination of sterling depreciation and HK price increases. In 1976 we exported to the UK a good deal less in quantity than in 1975 and we were unable to fill our quotas. Our statistical people here tell me that your total imports of textile and clothing (measured in tons) fell by 12% in 1976, while at the same time your production indices for both textiles and clothing went up.
If these figures are correct they seem to undermine every statement in the quotation above. Your bilateral agreement with HK under the NFA did provide some protection by preventing us from increasing exports in the categories where demand was still high. Market forces kept us down in the other categories. The effects of the recession have been felt by exporters as well as by domestic industry. There's no such thing as a guaranteed annual growth rate of six or any other per cent.
There is no "guaranteed" and "minimum" growth rate. As you know the sentence in Annex B of the MFA about "not less than 6%" is immediately followed by
"In exceptional cases a lower positive growth rate may be decided upon."
In the bad old days when Bob Goldsmith, you and I talked about little but textiles when we met, HK's growth rate for cotton to the UK was 1%, when we extended restraint to polyester/cotton I'm told it went up to 2%, but now for seven out of 21 categories under restraint to the UK from HK the growth rate is only one-half of one per cent and these are the categories where our trade is most substantial and our quotas are highest. In six cther categories to the UK the growth rate is under 6%. We know of course that you have conceded growth rates over 6% on some categories from Korea but this is due to the application of the "burden-sharing formula", which is entirely an internal EEC affair. It does not derive directly from anything in the MFA,
Elsewhere in Mr. Meacher's speech he said
The six
"long-term growth prospects now seen considerably less rosy than when the MVA was negotiated. per cent minimum growth rate is far too high in relation to the prospective growth of the domestic
and what there is is a growth in quotas, not necessarily a growth in
actual exports.
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