TNAG-0302-FCO40-338-Effects-of-tariffs-on-imports-of-cotton-textiles-to-UK-from--1971 — Page 37

But we

tariff to the Commonwealth and to avoid double protection.

retained the right under the GATT Long Term Cotton Textile Arrange- ment to re-impose q r if (as the LTA allows) imports of particular

products disrupted the market, with the additional condition (not

required by the ITA) that total imports would also have vo increase

significantly; this was because we did not seek to preserve every

sector of the industry in its existing form or to retard the shift

of resources to more effective forms of production. The Govern-

ment also made available £10 million for re-equipment through the

IRC, facilities which were disappointingly under-used and wore

termingated earlier this year.

28/eliver

WHAT HAS HAPPENED?

3.

Since the forecasts in the Study UK consumption of cotton and allied products, home and imported (i.e. spun man-made fitre

and cotton yarn and woven man-made fibre and cotton cloth), fell

marginally in 1969 and 1970, recovering in the case of cloth in the

first half of 1971. UK production, which the Textile Council

foresaw as gently rising from 1963 onwards, also fell in 1970, but has not recovered (and indeed has fallen further) this year.

Imports fell in 1969 and 1970, both absolutely and as a share of

the market. But, unlike domestic production, imports of fabrics (though not of yarn) recovered sharply this year; and as a result are back to the 1968 share (38) of apparent consumption. The

figures of consumption, production and imports are summarised in

Tables 1 and 2.

2.

CONFIDENTIAL

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