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MR R M ALLOTT
PA
Mr. Tarlton, Economist, Mr. Murray SAD Ma. Goodfellow HKLOD
Mm. Hart & EID (E)
- Mr. Nixon, NENAD
29€
Cc:
Mr Lam
Lir Ingram
kut 26/10
CRE
CREL
Miss Lowe CTD
Mr Bradshaw
Miss Lackey
CRE2
CRE3
CTD
CTD
CRE2
Mr Hopc Mr Pownall Miss Welch
Miso Statham CR51
2
RESTRICTIONS ON IMPORTS OF COTTON YARN
The BTEA paper was first circulated for quick comments to Miss Welch (CRE2), Mr Hagestadt (CRE3) and myself in August. None of us thought much then of the arguments put forward for retention of
on low cost suppliers other than the Mediterranean Associates for another three years, and certainly the case seems no stronger now I look at it again.
2.
9.r.
Miss Lowne's draft submission to Ministers states the basic facts of the industry's case very clearly. The first paragraph under the heading "Comments on the Industry's Case" really seems
on their own to sum up also the case against the industry; estimates, if the remaining restrictions were now removed, import penetration would rise from 13% to 28 in 1975 and 700 jobs would be lost out of 34,360. (The Industry themselves put the figure, paragraph 18 of their statement, at 1,900-2,600). this would not justify new import restrictions; see why it should justify the retention of existing ones which
abolished sooner or later. it has long been known will have to be
CTD admit that and it is hard to
3. The impressive looking array of statistics in the BTEA paper seems to add little to the basic summary above, with the significant exception that (Table 5) the per capita cotton yarn importa of the Six from the controlled countries in 1972 was 125 to the U.K.'s 100. The Industry attempt to counter the argument that if the Six can cope, why cannot they, by saying:-
(a) That yarn spinners in the Six are getting very alarmed
und "are seeking remedies".
(b) That in any case what matters is total imports of all
textiles, not just yarn, since imports of textiles remove part of the market for domestic yarn.
(b) is true but irrelevant when the point at issue is simply imports of yarn; (a) would have some significance if the Community as a whole were likely to be changing their policy on yarn, but I know of no evidence of this.
4.
The main points of the Industry's case are:-
(a) A threat of increased imports would make it still more
difficult than it is now to recruit labour (para 17). (b) "The economic viability of whole companies" (including
apparently vertical companies and both cotton production) would be undermined (para 18).
and mmf
2/....