CONFIDENTIAL
-2
9.
Threat of disruption of the Australian market for cotton denims, drills. dungarees and jess
It is the view of the Australian Government that the Australian market for cotton denims, drills, dungarees and jeans is being threatened with disruption through increased imports from · Hong Kong and the likelihood of a further substantial increase in imports from that source in the light of present prices on offer to Australian users.
10.
The fabrics concerned are woven fabrics, wholly of cotton or containing more than 50 per cent of weight of cotton and less than 20 per cent by weight of wool and less than 20 percent by weight of manmade fibres, weighing not less than 6 ounces per square yard and more than 15 ounces per square yard, whether unbleached, bleached, printed dyed or coloured, and known as drills, denims, dungarees or jeans.
11.
of
Total imports of these fabrics in the 12 months period October 1965 to September 1966 were 3,000,400 square yards which Hong Kong supplied 1,067,200 square yards, or 35.6 percent.
12.
In the period October, 1966, to September, 1967 total imports increased to 3,499,000 square yards and imports from Hong Kong increased to 1,337,700 square yards, representing a share for Hong Kong of 38.8 percent of the total. The increase of 25 percent in imports from Hong Kong accounted for 60 percent of the total increase in imports.
13.
Apart from the increase in imports from Hong Kong which has already taken place, agents have been offering Hong Kong fabrics of this kind to Australian users at landed duty paid prices considerably below the Australian local prices as in the example referred to in the Memorandum of 31st January.
14.
There is a very limited number of users of these fabrics in Australia and one of the major users has already transferred a substantial part of its order from Australian to Hong Kong manufacturers and has indicated its intention of purchasing the whole of its future requirements from Hong Kong. If one of the major users was to transfer this purchases wholly to Hong Kong fabrics at a lower price, it is likely that for competitive reasons the others would be forced to follow suit.
15.
In this situation the transfer of any significant proportion of the end users' requirements has an immediate and detrimental effect of the local suppliers' position.
16.
Woven cotton fabrics at present receiving tariff protection represent only 15 percent of the total Australian market. The remaining share of the market is taken up mainly by imports at minimal rates of duty. Locally produced drills, denims, dungarees and jeans account for approximately 22,000,000 square yards, or almost 40 percent of the total Australian production of 57,400,000 square yards of woven cotton fabrics of all types.
17.
Because Australian production of denims, drills, dungarees and jeans is not large in overall terms, and yet represents a most important part of Australian cotton fabrics production, the increase in imports from Hong Kong coupled with the recent and probable loss. of further orders poses a threat of serious disruption to the Australian market which would have adverse repercussions throughout the whole of the Australian cotton textile industry.
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