W. Thayen.
672
HKK 121/616/
Import Penetration and "Stabilisation!
No
In its declaration to the Textiles Committeë in
July 1977, the EEC referred to the "necessity for stabilisation
of rates of penetration in certain products" and stated that
"for products with a very high rate of market penetration, it is essential that the rate of penetration of imports by comparison with 1976 levels be stabilised."
2.
This implies that the rate of market penetration by
imports is the ultimate measure of the health of an importing
country's industry. In fact, however, the viability of an
industry or a firm can be measured only by its total production,
sales and profits for the domestic and overseas markets. 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, 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.
3.
The rate of import penetration is a comparison only
of imports with domestic consumption, cmitting exports from
the calculation. Except where an industry does not export at
all, its share of domestic consumption cannot be a true measure
of its viability, and the more of its productic it exports,
the more irrelevant the ratio of import penetration becomes.
Indeed, an increase in the import penetration ratio: may accompany rising domestic production, sales and profits based
on a thriving export trade.
4.
•
This can be illustrated from the EEC's own recent
experience. In 1976, the EEC's imports of cotton woven fabrics
from third countries increased and the import penetration ratio rose from 39.7% in 1975 to 44.7% At the same time EEC
production both for the home market and for export also
increased. Total production increased by 11.5% over 1975.
is not a situation that would support a case of 'market disruption'.
Thio
15.