TNAG-1154-FCO40-1434-Visits-by-Members-of-Parliament-(MPs)-to-Hong-Kong-1982 — Page 97

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7 July 1982]

MINUTES OF EVIDENCE TAKEN BEFORE

MR PETER REES, MP, MR C B BENJAMIN and MR A DUNNING

[Mr Crowther Contd.] you mean by it. Could you define it a little because it can at least contain the implica- tion of dumping in GATT terms, but possibly that is not what you mean?

(Mr Rees.) It sometimes appears to us that to obtain a toehold in a market, for example, a foreign company may in the first instance tender at a price that will certainly show them no profit and may even be slightly below cost which you may well say is dumping terms. But I think (and I speak subject to correction; Mr Benjamin will correct me if I am wrong) we would not be in a position to complain to GATT if in a market other than our own a third party would sell below cost. It would be for the domestic industry to make that complaint and not for us.

Mr Foster

55. Even though that might be very hurtful to us and we can feel aggrieved about the sacrificial pricing, is it not a fairly common commercial practice even in this country? Is it not a marketing strategy?

(Mr Rees.) It can happen in this country, I think, indeed.

Mr Hill

56. We have seen in Annex E of your paper you have been successful in some fairly major projects in the export market. There is the Airport Master Plan, £50 million which is quite an achievement. Has it been a long continuing story of success that the United Kingdom has had in putting together these jumbo projects in the area, and has there been any significant problem in selecting which United Kingdom firms to back in some of these vital large projects?

(Mr Rees.) I would not like to say it is a record of unalloyed success. Obviously we win some and we lose some, but I think we still make a fairly significant contribution in this field as the figures demonstrate. I think that it is a fair point to make that foreign governments, particularly where a major infrastructural project is concerned, some- times do not fully understand when there are two or three British companies compet- ing. They tend to think in terms of UK Limited, while we know, of course, that ours is an open economy with several companies who may be competing in a single field in that area. So obviously so far as it is proper and appropriate to do so we try to encourage British companies to com- bine rather than to compete.

57. Going to trading missions, because

[Continued

you make in your paper quite an extensive description of how trade missions are made up-indeed, three missions with Ministers leading commercial entrepreneurs have left this year already, which I think is extremely good: I hope the Chairman of our Select Committee will note this — does ASEAN have its fair share of United Kingdom support, with trade fairs, trade missions in particular, and seminars, bearing in mind its very significant future potential? Are the commercial operators of companies and consortiums being encouraged sufficiently by government-sponsored trade fairs, semi- nars, etc.?

(Mr Rees.) I would hope so. I do not think the trade fair is quite such an element in the commercial scene as it is, for exam- ple, in America or in western Europe. Certainly so far as delegations, seminars, matters like that are concerned - indeed I mentioned I think at an earlier stage the Committee in Invisibles, who are holding this seminar in Jakarta — I would hope there is pretty good covering but might I respectfully suggest perhaps that question should be addressed to the SEATAG repre- sentatives and I shall await, with some trepidation, their answer.

58. I am sure that is right. The trade fairs as such, having been so successful in Europe in particular, is there a difficulty in getting commercial companies to think of these events a very long distance? Are they not going more for the contracts which are either within Europe or within eastern Europe rather than setting their sights on such distances?

(Mr Rees.) I think one finds a remarkable spread of British Companies operating in ASEAN but, that said undoubtedly the administrative cost of penetrating and ser- vicing that market must be greater than that of penetrating and servicing western Eu- rope or, indeed, perhaps, the United States.

Chairman

59. I think I should put this to you, to give you an opportunity of commenting on it: SEATAG have put in a paper to us and it is rather suggested in the second paragraph that commercial posts throughout the area are set more on an historical basis rather than on assessment of future potential for trade. Do you find that to be accurate?

(Mr Rees.) Obviously one is diffident about differing from such an experienced body but these matters are very regularly and very carefully considered. It may be a