TNAG-0172-FCO40-208-United-Kingdom-Productivity-and-Efficiency-Study-effect-on-H-1969 — Page 148

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Any transitional period during which both tariffs and quotas would apply should be made as long as possible, he urged, so that future policy could be adjusted in the light of import figures during this period. A straightforward switch from quotas to a tariff of only 15% would bring an avalanche of imports which would undermine the whole structure of the industry as well as adding further to the country's balance of payment problems.

"Sitting Ducks".

Those who favour retention of quotas also base their case on fears that the abandonment of categorisation would re-open the way for foreign suppliers to attack individual sections of the trade in turn, picking them off one at a time "like sitting ducks". This factor was a major concern of the industry before the present arrangements came into force; under tariff 'protection" it could create havoc in individual departments.

In the meantime the Board of Trade is also being urged in some quarters to switch the issue of quotas to the United Kingdom side instead of leaving them in the hands of exporters overseas. It has been pointed out that this would enable market forces to operate because there would be far less risk of the quota-holder at this end using his licence purely to ensure performance.

Moreover, such a policy change would effectively end the market in quotas abroad, where licences change hands at a high premium, resulting in losses of exchange to Britain in inflated prices having to be paid and sterling flowing out of the country to cover these premia. The Board of Trade itself could prohibit the transfer of licences if they were issued in this country but even if there was a premium such funds would remain in the United Kingdom.

Licences of quota-holders under the "global quota" scheme are already allocated by the Board of Trade, so that there is ample precedent for such action. But basically there seem to be very strong reasons to suggest that the level of tariff put forward as a basis for discussion in the Textile Council's report would fail in its objective.

TEXTILE PAYMENTS BALANCE IMPROVES.

Ending of the strike which affected the distribution of many Government publications has at long last released details of overseas trade during March and April, for which only the main headings had previously been available. So far in the first four months of the year the textile balance of payments position has improved in that earnings amounted to £105,616,000 against £93,920,000 in the same period last year, while the cost of imports has remained almost unchanged at £81,006,000 against £60,988,000.

Figures for cotton and man-made fibre yarn and cloth exports and imports have already been given for the four months but the destinations and suppliers are now to hand. Among the features are substantial increases in shipments of man-made fibre yarn and thread to the Soviet Union from 2,526,000 lb. to 5,429,000 lb., while Denmark, Western Germany, Switzerland and Syria have also taken larger quantities.

In man-made fibre fabrics the Soviet Union also stands out as an important customer whose takings this year have been 1,499,000 yards against only 1,000 yards in the first four months of 1968. A number of countries have so far absorbed smaller quantities of cotton cloth this year, including Australia, New Zealand and Canada, but shipments to the Irish Republic have increased and sales to South Africa and the Congo (Kinshasa) have improved.