TNAG-0302-FCO40-338-Effects-of-tariffs-on-imports-of-cotton-textiles-to-UK-from--1971 — Page 89

?. A further important factor affecting the woven cloth industry is the trend towards greater use of knitted fabrics, which has proceeded at a faster rate over the past few years than was forecast in the Textile Council's Report. There has been a marked rise in imports of knitted fabrics and knitted garments this year. The trend towards greater use of knitted fabrics and garments is, however, one which reflects developments in technology and consumer demand. The knitting sector of the industry, much of which is located outside Lancashire, at present operates with considerable success and with an export performance which demonstrates its international competitiveness. Any protection designed to reduce the swing to knitted fabrics would distort the growth pattern of our textile industry as a whole in a way that would handicap one of the most successful sectors.

8. Imports of cotton and spun mmf yarn have increased in 1971 but they still represent only 3.6% of estimated consumption of spun yarns. Concern in the spinning industry is therefore linked more to the trends in home production in the weaving industry than to a particular problem on yarn imports. From time to time c mplaints are made about the prices of imported spun yarns, but so far these have been insufficiently substantiated to warrant an anti-dumping investigation.

9.

To sum up, the industry is suffering from a substantial

· decrease in demand on home production of woven cloth, particularly cotton cloth, which has accompanied a substantial increase in imports. Some increase in imports of cotton textiles was expected in 1971 and early 1972 accompanying the change in import policy, but there is evidence that price factors have played a prominent part in stimulating imports as opposed to home output. Üvorsens competitors appear to have controlled cost increases where UK producers have not. The imposition of the tariff on imports of cotton textiles from the Commonwealth Proference Arca should, et least for a tine, partly correct this imbalance (except in the case of Hong Kong, which is expected to absorb most of the tariff by paring its presont large profit margins). Other special factors however, have to be taken into account which are dealt with in the

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