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concentrated, clothing the least. The European Regional Development Fund is already focussed on areas hit by the run- down of the textile industry among others. The case for, and the scope for, UK regional policy to be focussed on such areas could be studied further. The reaction to increased competition of particular firms making particular products in particular localities depends of course on entrepreneurship, willingness to adapt, and many other factors which cannot be forecast.
Effect on the rest of the economy
8.
Silberston concludes that the effect of the MFA is to raise the retail price of clothing by perhaps 5%, at a total cost to consumers of about £500m per annum. The industries dispute this estimate. However other studies have found higher figures. If (as he says) it protects 10,000-50,000 TC jobs, the cost-per-job to consumers of the TC employment safeguard is £9,000-£45,000 per annum, ie more (and perhaps many times more) than the earnings of the employees concerned. (See paragraph 10 below on the effect of the MFA on employment in other industries). It will be noted that
the Government's new Regional Policy sets cost-per-job limits of £3,000-£10,000 in total (not per annum).
9. The Consumers' Association and the British Importers' Con- federation have emphasised that TC quotas raise most sharply the prices of lower-priced garments, as exporters under quota concent- rate on the higher-priced ones. As lower-quality lines tend to be used predominantly by low income groups it is they who bear the main brunt of protection. Similarly, it bears especially heavily on the price of children's clothes.
The
10. Silberston concludes that the MFA tends to depress employment in the economy generally: its ramifying macro-economic consequences (including eg a higher £ exchange-rate than would prevail without it) depress exports more than imports. A relaxation of the MFA restrictions would be expected to stimulate exports more than imports, and although 10,000-50,000 jobs may be lost in the TC industries, more jobs than this would be gained elsewhere in the economy. On balance employment would be some 40,000 higher. conclusion concurs with the Government's general conviction that competition tends to raise employment rather than lowering it. There is of course no way of knowing just which other industries are held back by these indirect effects of TC trade restrictions, but it follows from the analysis in the report that industries which otherwise could withstand international competition must be the indirect victims of the protection of those which cannot.
11.
Although the higher prices caused by the MFA go in part to British textile and clothing producers, their main benefits accrue to foreign suppliers, as they receive higher prices than they would otherwise. Professor Silberston estimates that of the £500m paid out by British consumers in consequence of the MFA, £330m is lost abroad in this way, and only £165m accrues to British producers.
UK's international commercial interests
12. The MFA remains a sharp thorn in the side of the developing countries, who attack it as a symbol of the developed world's discrimination against their exports and ambivalence towards GATT
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