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{
It is in any case impossible to stabilise the rate of penetration of imports unless at least three of the four factors involved i.e. domestic production, total imports, exports, and consumer
demand are under control. The Community's proposals involve imposing a partial control on only one
factor. The aim is therefore unattainable.
4
The rate of import penetration is a comparison only of imports with domestic consumption, omitting exports from the calculation. Except where an industry does not export at all, its share of dorestic consumption cannot be a true measure of its viability, and the more of its production it exports, the more irrelevant the ratios of import penetration becomes. Indeed, an increase in the import penetration ratio may accompany rising done stic production, sales and profits based on a thriving export trade.
5.
This can be illustrated from the REC's
own recent experience. In 1976, the EEC's imports of cotton roven fabrics from third countries increased and the import penetration ratio rose from 40% in i 1975 to 43% At the same time EEC production both for the home market and for export also increased. Total production increased by 15% over 1975. This is not a situation that would support a case of-
'market disruption'.
;
6.
Knit sweaters furnish a similar example. In 1976, the EEC's imports of this item from third countries increased by 13%. The import penetration ratio rose from 25% to 26%. At the same time ERC production increased by 11%, partly for the dom stic market and partly for export. Exports to third countries indeed increased by 64%
./7.
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