TNAG-0244-FCO40-280-Exports-of-textiles-from-Hong-Kong-to-USA-1970 — Page 89

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G.F. 323

CONFIDENTIAL

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for the U.S. Government over the next three years.

20.

Mr. Stewart, again referring to Daily News

Record reports, recalled that there appeared to be a

shortage of productive capacity in the U.S.A. especially

with the increased demand for cotton/polyester fabrics.

There was also a severe shortage of knitting machinery

and U.S. productive capacity was unable to keep pace

with the swing to knit goods. Both factors increased

the demand for imports to fill the gaps left by the

failure of the U.S. textile industry to meet the

market's requirements.

Further evidence of the shortage

situation for fabrics was that prices had doubled in the

last twelve months and that there had been a change in

the import pattern of these fabrics.

21.

Mr. Nehner said that one change he had noted

was a reduction in imports of fabrics from Japan. This

he thought was due to increased exports of these fabrics

to Hong Kong, Taiwan and South Korea where they were

cut and sewn into apparel which was then exported to

the U.S.

22.

Mr. Wehner went on to say that the import

impact was uneven. Imports did come in cycles but the

tendency was for imports not to fall off significantly

in a down turn and they rarely returned to previous

levels even when there was a falling off of imports.

/As

CONFIDENTIAL