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market. Consequently, we are getting levels of import penetration in particular sectors which are, frankly, unacceptable, and with more in prospect unless the MFA provisions are changed."
I arrived in Geneva in December 1973 and my recollection of the closing weeks of the MFA negotiation doesn't agree with Mr. Meacher's. The general feeling as I recall it was that things were bound to deteriorate in 1974 and that if we didn't conclude the MFA by 31 December positions were bound to move farther apart in 1974. The "minimum" growth rate of 6% was agreed at a time when prospects did not seem rosy (though I admit that none of us foresaw the severity of the recession).
But the thing we (and many others) really take issue with here is the idea that import penetration is an appropriate measure. Ben Meynell tried this one in Geneva in December and was elegantly but sharply demolished by Raffaelli of Brazil. It seems to us meaningless to talk about import penetration where there are substantial exports. When there are, the import penetration percentage can be varied not only by actual imports but also by the extent to which domestic industry exports its production while the actual level of imports remains unchanged. If the Chancellor continues to squeeze domestic demand, while pushing UK industry into exporting more, this could be what will happen.
I am not surprised that the level of import pene- tration has never been accepted as a basis for definition of market disruption. To my mind the only sound basis is the first sentence of Annex A
"The determination of a situation of 'market disruption'. as referred to in this Arrangement, shall be based on the existence of serious damage to domestic producers or actual threat thereof."
While this description is not complete and perfect, I think you would have the greatest difficulty in persuading the participating countries to agree to amendments that would replace that sentence by a reference to growth in import penetration.
Another question participating countries will ask is "How do you know what the level of import penetration is if you have no statistics?" Under our agreement with the Community initialled in July 1975, the Community undertook to supply us regularly with import statistics. They have not so far supplied any at all. A letter from Soames' office in mid-December 1976 told us that the Commission would shortly be able to start supplying such statistics. We are now in April 1977, but there is still no sign of the missing figures. I cannot believe that the statistics are available but are being deliberately withheld
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