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LANCASHIRE TEXTILES
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The Financial Memes 24/7/605
Facing up to tariffs instead of quotas
1.
O'NEILL
Dean al die Govermatent's court to provide the sort of environment
LD for i.. Now they situation with price levels it will end de La ushire have to meet in every product. les to and a halt-In its productivity and efficiency to one of the study the Textile Council culcu- Challenges ever hated that the industry could to it.
achieve the productivity needed to ustry has been used to become competitive in these con- aging that the ball has always ditions. Now this calculation bas to be put to the test. There are no more unknowns and few un- certainties. Mr. Crosland's deci- sion is going to precipitate a lot of hard thought.
Where textiles and with a tariff on Commen cat present duty Crosland has firmly the ball back 31 the
The
not just R Of the protection to cotton textiles, but an to che the whole nature
to become efficient. In the Textile Council's to terminate the quota
cotton
#tive
Being quota system for ies was disruptive from 4t led to confused
in the home market, as per cent. of imports came And again, because were categorised, that part arket which was left to U.K. producers was unreal. Com-
prding standard com. lucis that they should not have been making and were insulated from
Uve pressures,
the system was pro.sion, it encour optimists--and there few in Lancashire
diet some generous- Government
round the
d put the clock back.
been an environment to the sort of the reinvest- and as the industry
JUA more
in.
at co; atries that equoia esten have further to the imports.
cone this eng- dinally
nuinely competitive
1:
some companies have been able to jog along quite happily behind the quetas they may find the same products non-
ton and Dewhurst revealed in its recent annual report that its raw material requirements were now over 90 per cent. man-made fibres. English Calico's current £10m. capital programme is concerned with investment in the more specialised areas associated with man-made fibres. Where the changes must take place and where the problems exist is in the smaller companies of the industry.
Whereas it is quite easy for a large group with a unit that is clearly vulnerable in a tariff situa- tion to close it and invest else
U.K. CONSUMPTION OF "LANCASHIRE"
WOVEN TEXTILES
Cotton, man-made fibre and mixture fabrics
Total U.K. Consumption
of which:
Imports
U.K. Production
U.K. Experts
1963
1953
1962
m. sq. yds. 2,160
mi. sq. yds. 2,005
m. sq. yds. 1,865
530(25%) 1,630
431
823(40%) 1,270
256
starters behind a tariff, particularly if they are single-process com- panies with little control over their As Dr. Johnson said: markets.
When a man knows he is to be honged in a fortnight, it concen; his mind wonderfully." Though there is no reason why many companies in Lancashire should be hanged.
trates
Most of the large groups in Lancashire have been manoeuvring away from those areas most vul- nerable to imports. Courtaulds large new weaving sheds coming on stream during the next 18 months were planned with this sort of tarif situation in mind. Sir Frank Kearton told me yesterday that he was very pleased" with the Board of Trade's proposals.
Viyolla has claimed that it will
2011 of
992(53%) 873
172
where, if that unit is all that there is to an independnt company with limited finance, the decision before it now is more likely than not whether to stay in business and completely re-equip or close the doors.
When companies are faced with this type of decision the motive to merge should also be greater. The two consultants appointed by the Board of Trade to examine this area of the industry have already seen 70 firms and have brought the IRC into several merger dis- cussions. Their job should now be considerably easier.
There is the view that imports have reached a level where the opportunities for further penetra- tion are limited. There are many areas where domestic manufac- turers with their prenimity to the solid advantages.
fabrics in the near future. Carring market have
These opportunities were clearly spelt out in the Textile Council's report. There is plenty of incen- tive for companies to stay in the industry.
While the industry's initial re- been to welcome it with opened action to the tariff concept has
arms, there is still some uncertainty over whether the Board of Trade is going to provide those "ade- quate safeguards" against dumping and unfair trading, which the Tex- tile Council considered to be an essential proviso for the tariff.
The British Textile Employers' Association. now the main trade body for the industry, has already reminded the Board of Trade of the need for more effective controls for
dumping, dual pricing and other unfair trade practices." It was joined yesterday by Mr. Neville Butterworth, chairman of English Calico, who said that he was very concerned that anti- dumping legislation should be made more effective and easier to invoke.".
Garment imports
The Government is of the opinion that the new dumping legislation is good enough, but in the notorious malpractices that textiles, the U.K. has the reputa- permeate international trade in
tion of being somewhat of a soft
-
4,000
(3,000
(2,000)
1,000
Million sq yards equivalent
0
1953
ZOOL
The only other adverse reaction to the announcement has come from the garment manufacturers. The tariff proposed on cotton garments
Commonwealth
1968 EST.
19
Knitted
(Excl. Stockings, Secksetc.);
Woven
Vicolien and Worsted
Woven
Filament (Exc, Tyre cord)
Cotton, saun man-made fitra and mixture
adequate safeguards" are liable ners and weavers may be forced to conflict.
to change their trading policies.
Considering the widespread changes in policy and structure that the tariff proposals are aiming to bring about, there are in the Ŭ.K. few controversial remarkably issues. The more surprising aspect is that Mr. Crosland has been able to agree with the rest of
from
countries, is 17 per cent.
touch," compared with other Common Market Whitehall so quickly to embark on
Europeans and the US. Without quotas the U.K. will be a more attractive target.
Mr. Crosland has said that he will consider the use of quotas under the GATT provisions if there is market disruption in particular products. hut only if total imports of cotton textiles rise significantly above the present level. The Board of Trade is anxious not to use quotas in such a way that they will interfere with any change in the U.K. production pattern towards those goods in the supply of which the U.K. will have a relative advan tage as the Textile Council report The achievement of this objective and the provision of
As coun-
In 1968. of the total imports of cotton textiles about one-quarter
advantage of low labour costs were in garment form, where the throughout the production cycle become most effective. tries like Hong Kong will now have to face more low cost textile competition in the UK. them selves from Korea. Taiwan, and other non-Commonwealth nations they may well direct their efforts even further into exports of gar- ments and man-made fibre goods. Manufacturers of such prodiets as workwear in the U.K. will find it
like some of the Lancashire spin-
a major change in Commonwealth trading relations, which despite all the re-assurances, must have some repercussions.
But that is the price to be paid to make the Lancashire textile in-
dustry efficient. The loss of Com- monwealth preference would occur in any case should the U.K. join the Common Market: and there is little doubt in anyone's mind that if the Lancashire industry were to find itself thrown into the Common Market to-morrow it would be itself highly uncompeti- tive. It is better to face up to. this now rather than later.
Sunnuel Bridan is on holiday and will resume his colon best week.
DAN KEKERSKAFTEN PIEZASI MARKET AUSMAANA DA
24 JUL 1969
GISTRY No. 5
PROIEVED IN
眷
92