3.
A second factor which had affected the industry had been the rapid pace of technological change, particularly the introduction of permanent press. Cotton goods now only accounted for 42% of the market so the cotton LTA now no longer applied to the major part of the industry.
4. Thirdly, the industry was a major employer of labour. Between 2.4 and 2.5. million people were directly employed, with another 2 million workers indirectly depending upon it. A greater part of the industry was located in 'small communities and was generally an important employer of underskilled, overaged people, and of minority groups such as the negroes and Puerto Ricans. The well-being of the industry was therefore important socially as well as politically.
5. Finally, 1968 had seen a major increase in imports from the developing countries, Japan and Hong Kong (which the U.S. regarded as a separate category). Imports of non-cotton textiles from S. Korea now amounted to 4 times imports of cotton goods under the LTA; for Taiwan the factor was 2. This was why the U.S. was seeking an extension of the cotton LTA.
Import Statistics
It was
6.
Discussion first centred on the statistics for man-made fibres. pointed out that the greater part of the increase in imports was from yarn with twist of which three quarters came from the developed countries. The reply to this was that man-made fibres only accounted for 19% of the imports of filaments. Imports from d.c.'s had gone up from 339 million sq. yd. equivalents in, 1967 to 550 m.s.y.e. in 1968; for the 1.d.c.'s the increase was from 168 m.s.y.e. to 355 m.s.y.e., for Japan from 352 m.s.y.e. to 435 m.s.y.e. and Hong Kong from 75 m.s.y.e. to 99 m.s.y.e. Mr.Hughes wondered why the U.S. were not interested in restricting imports from the d.c.'s when these had grown the most.
The answer given was that the price levels from the d.c.'s were not disruptive.
Also importa from the d.c.'s were largely of yarn (which was processed by domestic industries) while l.d.c's supplied finished goods. The Americans had no figures for domestic production with which to compare the growth in imports. When it was pointed out that domestic production was growing as well as imports, the Americans commented that they were seeking to moderate the rate of growth of imports.
7. It was then argued xxx that the more progressive firms were naturally moving from the traditional fibres into m.m.f. This modernisation had been faced with a shortage of supply of fibres,and imports from Europe could be regarded as having helped the U.S. industry and employment. Imports of woven m.m.f.'s had fallen from 6% of consumption in 1956 to 4% in 1968. In knitted fibrics there had been a large expansion of both domestic production and imports, though the latter was only a very small percentage of the market. Mr. Nehmer replied that, while they were concerned about imports from Japan (who supplied 90% of imports of woven m.m.f.) they were not concerned about Europe, as vet.
Unemployment
8.
Mr. Nehmer referred to the unemployment created in isolated communities by mill closures resulting from competition from imports. Mr. Carey, however, suggested that we were hardly likely to be impressed in view of the much greater contraction of our own industries. The number of cotton mills in the U.K. had fallen from 784 in 1961 to 495 in 1968, and woollen mills from 1,036 to 797. The Americans agreed that imports were not the only reason for closures, and that some rationalisation of the industry was not undesirable. They did warn us, however, that under GATT rules the importing country was responsible for deciding whether or not disruption had occurred, though Mr. Hughes pointed out that before they would agree to U.S. measures the Contracting Parties would need to be convinced of their case.
19.