BRIEFING FOR THE HOUSE OF COMMONS SELECT COMMITTEE ON INDUSTRY AND TRADE
VISIT TO SOUTH EAST ASIA : NOVEMBER 1982
MULTI-FIBRE ARRANGEMENT
Introduction
1
The European Community's trade in textiles and clothing with low-cost countries, including Hong Kong and the ASEAN states, is controlled by 28 bilateral agreements negotiated by the EC Commission under the GATT Multi-Fibre Arrangement (MFA). A protocol extending the MFA until July 1986 was agreed in Geneva on
22 December 1981. The Commission is now in the process of re-negotiating the
bilateral agreements with supplying countries on the basis of tough mandate
from the Council of Ministers. Eighteen agreements were concluded by the end
of September, the 9 countries outstanding include Hong Kong and 4 of the ASEAN countries (Philippines, Singapore, Malaysia and Indonesia). The Council of Ministers will meet on 25/26 October to consider the Commission's report on the
progress of the negotiations so far, and to consider the next steps. The
Community has already adopted a formal decision to withdraw from the MFA at the
end of this year unless the Ten agree that the bilateral agreements have been
negotiated satisfactorily.
Difficulties of the industry
2 In common with other EC Member States, the UK textiles and clothing industry
has suffered an enormous "structural" long-term decline in employment since the
early 1950's, when employment stood at 1.4 million. In 1980 and 1981, there was a sharp drop from 766,000 in December 1979 to 608,000 in December 1981, a fall
of 158,000 or over 20%. A further 17,000 jobs were lost in the first 6 months
of 1982. But with almost 600,000 employees, the industry still accounts for
over 10% of UK manufacturing employment.
3
The long term decline in employment is at least partly due to improvements
in productivity, but the short term decline from 1980 has been very much linked
to falls in production. There is a good deal of evidence to support the
industry's contention that these falls in production are largely the result of
fierce competition from low-cost imports at a time of declining demand.
Imports
4
Imports have risen more or less continuously. Between 1977 and 1981 total UK imports of textiles have grown by 35% and clothing imports by 46%, measured