§ 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 he 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 308 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 309 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?
310 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 Corns had also supported that campaign. Does she now accept that that is completely untrue? Does she accept that the president of Corns 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 Corns, 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?
§ 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 311 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 312 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—
§ 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 313 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.
§ Ms Hewitt
I entirely agree with my right hon. Friend's comments about the enormous anger that is felt today in the steel communities throughout our country. Their anger is justified; they are right to be angry about the action that the American Administration will take.
It is a tragedy that the American Administration, who played such a crucial role in securing the launch of the Doha development round and a new round of world trade negotiations, and signed up to negotiations that are designed to slash tariffs and import quotas around the world, have resorted to naked protectionism with no justification or legal basis.
I sympathise with my right hon. Friend's points about the need for action that is directed against America. I stress again that we shall consider what action to take, but will act within World Trade Organisation rules. That is in the interests of our country, of free and fair world trade and of the developing as well as the developed world.
§ Sir Patrick Cormack (South Staffordshire)
Will the right hon. Lady ask the Prime Minister to speak gently but firmly to President Bush, and to tell him that many friends and admirers of America, who strongly supported the way in which the Government stood by our ally in recent months, will perceive the cynical and appalling action that we are discussing in the context of 314 British-American relations? They will not regard that action as proper treatment of America's foremost ally, with which it always claims a special relationship.
§ Ms Hewitt
My right hon. Friend the Prime Minister will doubtless express his disappointment and views on the action directly to President Bush. However, it is important to understand that there is no connection between the action on steel and the global coalition against terrorism. We stand with the Americans and many other countries around the world in the global coalition against terrorism because that is the right thing to do and it is in our interests to do so. In the same way, we will stand with our steelworkers and steel producers against the American Administration, who have taken such completely unjustified action, because the Americans are wrong about that matter.
§ Mr. Tam Dalyell (Linlithgow)
Does my right hon. Friend believe that the Americans will take a blind bit of notice of what she does?
§ Mr. Dalyell
Of course they should. I believe that my right hon. Friend is wrong and that the Americans will not take any notice unless we link the global connections with what has happened to the steel industry. Should not we tell the Americans that we are not with them in their proposals on, for example, Iraq?
§ Mr. Elfyn Llwyd (Meirionnydd Nant Conwy)
May I tell the right hon. Lady that the anger on our Benches today, yesterday and the day before is anything but synthetic? Will she confirm a couple of small points? First, when did the Prime Minister become involved? There is an impression that that happened last Thursday—a bit late in the day. Secondly, when will she meet Pascal Lamy to discuss the way forward? Will she keep the House updated every week or 10 days about what is happening? The UK steel industry is going down the tubes.
§ Ms Hewitt
Of course I shall continue to keep hon. Members informed about the action that we are taking. I spoke to Commissioner Lamy a few minutes before making the statement to the House this afternoon. There will be meetings and further telephone calls between officials and Ministers in the next few days and weeks as we decide on the appropriate and lawful action to take. My right hon. Friend the Prime Minister will continue to support the interests of British steelworkers.
§ Dr. Hywel Francis (Aberavon)
I thank the Secretary of State for her unequivocal and clear statement of support for the steel industry in the United Kingdom. Steelworkers in my constituency appreciate the Government's work on the matter.
315 Will my right hon. Friend make it clear that the safeguards that she has described will be introduced immediately? That will reassure steelworkers and their communities throughout the United Kingdom and the new all-party group on steel.
§ Mr. Andrew MacKay (Bracknell)
As it is now clear from the letter published by the American chairman of Corus that the Secretary of State misled the British public on the "Today" programme this morning and has slurred Corns, will she now apologise? On three occasions, she has failed to answer a simple question, which is this; when did the Prime Minister first get involved in making representations to the American Administration and the President on this unfortunate matter?
§ Ms Hewitt
The statements that I made on the "Today" programme this morning and in other interviews during the day were, like the statement I made this afternoon, all factually accurate. I briefed my right hon. Friend the Prime Minister on the situation in July last year. He has remained closely involved and recently raised the issue personally with President Bush.
§ Mr. Ian Cawsey (Brigg and Goole)
In the north Lincolnshire area that I represent alongside my hon. Friends the Members for Scunthorpe (Mr. Morley) and for Cleethorpzes (Shona McIsaac), we have seen tremendous changes in the steel industry. Back in 1979, there were more than 22,000 people on the works; there are now fewer than 4,000. Those steelworkers have taken those changes on the chin every time because they have been told that they would secure a long-term future for UK steel. This ludicrous decision from the American Government once again puts their jobs in jeopardy. Will my right hon. Friend give an assurance that at a UK, EU and worldwide level she will do everything she can to get assistance for the industry and, moreover, that she will base all her decisions on the simple criterion of protecting British steelworkers' jobs?
§ Mr. Tim Boswell (Daventry)
I very much hope that the Secretary of State does not feel that our anger at the loss of British steel-making jobs would be, to use her word, "synthetic". Is it her intention to approach the European Commission with a view to exempting from the safeguard procedure the steel industry of Romania?
§ Ms Hewitt
I have already told the House that steel exports from the candidate countries have been exempted by the American Administration from their proposed tariffs. The reason for that is simple; it is because the exports from all those candidate countries are so small, whether those are exports to America or to the EU. The threat of diversion of imports, which is what we are concerned about, arises in the case of countries to whom the Americans are applying the tariffs, not the countries to whom they are not applying the tariffs. It will be in 316 that context that we will consider the appropriate and lawful action that we will take through safeguard measures to protect our own steel industry and workers.
§ Alan Howarth (Newport, East)
Will my right hon. Friend reject at very short order the proposal from the Liberal Democrat spokesman, which is that she should, in effect, write off the UK steel industry? Is she aware that the determination that she has expressed on behalf of the Government and the EU to act urgently to challenge the legitimacy of American actions in the WTO and to prevent dumping in Europe of steel displaced from the market to the USA will be very much welcomed in steel-making communities in south-east Wales, where it is understood—in a way that the Conservative party and Plaid Cymru seem entirely unable to grasp—that the policy of the Government to assist Romania to prepare its steel industry to operate within the rules of the EU so far from being detrimental to the interests of the British steel industry, will be beneficial to it, in that it will bring to an end subsidies and unfair trading practices in that quarter?
§ Ms Hewitt
I entirely agree. My right hon. Friend is standing up for the interests of the steelworkers whom he represents. We will of course do all we can and will work extremely closely with our European allies to ensure that we protect as far as possible his constituents and other steelworkers around the country against an utterly unjustified and unlawful action.
§ Mr. John Greenway (Ryedale)
It might surprise the right hon. Lady and the House to hear me say that the steel industry is hugely important to Ryedale. Some of our major employers and manufacturers are among the biggest customers for steel made in the United Kingdom. In particular, Ward Building Components, which is part of the Kingspan group, is important given its purchase of steel manufactured in Wales. The Portakabin and Portastore factories on the outskirts of York also purchase huge amounts of steel. Those companies need a consistent supply of high-quality steel at competitive prices.
The market has already been destabilised over the past two or three years, as the hon. Member for Brigg and Goole (Mr. Cawsey) said. I foresee the situation becoming worse. We risk the loss of jobs both in steel manufacture and in firms that use steel as a major component of their manufacturing processes. The Secretary of State said that she will consider safeguard action that may cause serious injury. In doing so, will she keep in mind the serious injury that may be caused to companies that rely on the supply of steel?
§ Ms Hewitt
Safeguard action under the WTO rules is designed to deal with a flood of imports that would cause serious injury. I entirely share the hon. Gentleman's concern, however, about the impact on our manufacturing industry of destabilisation in the steel market. Our steel industry includes some of the most productive steel companies in the world and companies at the leading edge of creating high value-added and innovative steel products of enormous importance to manufacturing industry.
The irony of what the Americans have done is that, by effectively banning from their market the high value-added products in which Britain and other European countries excel, they will damage their own steel industry, the restructuring of which will be delayed, and parts of 317 their manufacturing industry, including the aerospace industry. I hope, even at this late hour, that the serious implications for the American manufacturing sector might persuade the American Administration to moderate the stance that they took last night.
§ Dr. Ashok Kumar (Middlesbrough, South and Cleveland, East)
Will my right hon. Friend tell President Bush that his draconian measure is a foolish and stupid idea that should be buried immediately? There is a great deal of anger in the House and in our constituencies. I represent a steel constituency that has lost several thousand jobs in the past year. I associate myself strongly with the remarks of my right hon. Friend the Member for Copeland (Dr. Cunningham), who said that our people seek strong action and want their jobs to be defended. Now that Turkey and South Korea may dump their steel over-capacity not on America but on this country, what action will my right hon. Friend take?
§ Ms Hewitt
My hon. Friend is a staunch defender of his constituents who work in the steel industry. He is absolutely right to draw attention to the threat to their jobs posed by the diversion of imports from countries such as Turkey and Korea, which will be directly affected by the tariffs that the American Administration propose to impose. That is precisely why, with Commissioner Lamy and colleagues in our fellow European member states, we seek to take safeguard action to protect my hon. Friend's constituents and other steelworkers against a flood of imports from countries locked out of the American market.
§ Mr. Gregory Barker (Bexhill and Battle)
Will the Secretary of State tell us exactly when she and the Prime Minister first became aware that Mr. Mittal was funding the protectionist lobby to the tune of $600,000? In light of the success of that lobby, will she and her colleagues take the only honourable course of action available to them and return the £125,000 that they took from Mr. Mittal?
§ Ms Meg Munn (Sheffield, Heeley)
Has my right hon. Friend been able to make an assessment of the effect of the outrageous 30 per cent. tariff that will be placed on exports of some products, many of which are manufactured in south Yorkshire, and of the likely effect on manufacturers in the US who currently rely on those products, which come from our area?
§ Ms Hewitt
We are in the process of making precisely that assessment, but I am sure that my hon. Friend will understand that, given the number of different companies involved at this end, the number of different purchasers involved in the manufacturing sector in the United States, and the number of different products involved—we and others have been seeking exemption for over 1,000 products during these discussions—it is not possible to arrive at an instant assessment.
318 As I said in my statement, some 4 per cent. of total British steel output will be affected by these tariffs if they go ahead on the basis of last night's statement, but obviously that will affect some companies, which specialise in those products, much more than it will others. We are looking to do that assessment very quickly. We are of course already working with the steel producers, the steel trade association and the steel trade union, to ensure that we have an accurate assessment of the damage that could be done not only to our producers, but to American manufacturing industry. On that basis, we will decide on the appropriate safeguard action that should be taken.
§ Mr. Derek Wyatt (Sittingbourne and Sheppey)
After the end of the American love affair—after Kyoto, the Enron debacle and now this—I am not sure that we should be so surprised that this has happened. However, given the global economy, global systems and global communications, is 60 days now an appropriate time scale in which to consult the WTO? Might we work in future to make the consultation period much shorter than 60 days? Would it be possible to invite Pascal Lamy and the president of the WTO to this place before the recess—not to the Chamber because we cannot, but to the House of Commons—so that we may express our concerns forcefully to those two people?
§ Ms Hewitt
Of course I will look at that possibility, but let me assure my hon. Friend that, having just spoken to Commissioner Lamy, I am in no doubt—and I hope that hon. Members will be in no doubt—about the anger that is felt by him and the Government about the American action and this defiance of World Trade Organisation rules. On my hon. Friend's other point, we will continue to try to strengthen the World Trade Organisation as an institution and to ensure that it has effective dispute resolution mechanisms that can be used by member states who have a complaint rather more speedily than they can at the moment.
§ David Cairns (Greenock and Inverclyde)
I begin by declaring an interest as a member of the Iron and Steel Trades Confederation trade union. On that point, may I urge my right hon. Friend to consult fully and keep informed the leaders of all those who represent and work in the British steel industry? May I ask her to reject out of hand those calls for action that will be tantamount to a transatlantic trade war, which is certainly not in the interests of the British steel industry, or of the British economy and British jobs? Finally, while I appreciate that it is best to try to seek a cross-European approach on the matter, my right hon. Friend will be aware that such agreements can take an awfully long time to reach. May I ask her to ensure that the process is expedited and, if necessary, to retain the right to take action, as urged by my hon. Friend the Member for Brigg and Goole (Mr. Cawsey), that would be primarily focused on protecting British jobs and the British economy?
§ Ms Hewitt
My hon. Friend is right to draw attention to the important role of the ISTC and of course we are in touch with the union and with others representing steelworkers. I am very glad to say that today the ISTC has welcomed our Government's commitment to support the referral of America to the World Trade Organisation. 319 Let me stress to my hon. Friend that that referral to the WTO dispute procedure has already been initiated. Similarly, Commissioner Lamy has already initiated the work required to invoke the safeguard clause of the European Community rules. As I have stressed repeatedly to the House, we will continue to work in line with the WTO rules, which do give us precisely the basis on which we can take speedy action to defend our steel industry against this appalling action.
§ Mr. Adrian Bailey (West Bromwich, West)
I thank the Secretary of State for her statement and welcome the actions that are proposed to be taken with the WTO. In addition, I particularly welcome her comments about pressing for an exemption for producers of specialised steel exports during those negotiations with the WTO and others. May I bring to her attention the plight of a company in my constituency, Firth Cleveland—a small, specialist producer of high value, high quality cold strip steel? It has maintained a constant—I emphasise the word "constant"—export market in the United States, and has not flooded it. I understand that there is no domestic alternative for its products in the United States. May I ask her to ensure that interests such as those of that company, are adequately represented when we press for exemptions?
§ Ms Hewitt
My hon. Friend has already drawn my attention to that company in his constituency, and we are already ensuring that we understand fully its position. The point that he makes about the high-value-added products that are being exported at a steady rate—no sudden surge of imports there—to the United States precisely underlines the point that I made earlier that the American action risks damaging its own manufacturing sector, precisely when that sector is beginning to emerge from the recession in America. Although it may seem ironic, we may well be acting in the interests of American manufacturing industry, as well as his and other steel producers, when we seek—I hope, successfully—the exemption for which he presses.