CONMEENTIAL
from Thailand and from those countries which already operate export restraints.
6. While Thai polyester/cottons have not yet arrived here in substantial quantities, experience last year in dealing with South Korea and Taiwan has shown the consequences of delaying action. Up to last July, when we informed South Korea that we wanted consultations, imports from this source amounted to about 3m sq yds per year. By the time a restraint agreement had been negotiated, contracts been established for delivery of 33m sq yds by the end of 1973. Similarly, Taiwan with a past performance of less than 1m sq yds had booked orders for 7.2m.
7. The quantities so far ordered from Macao and Colombia
are much smaller. But there is reason to believe that these
countries could quickly take advantage of restrictions placed on their competitors. It would be preferable to act now and establish generous restraint levels in relation to actual trade while it is still small, rather than be forced to seek restrictions later against the background of a greatly increased performance.
Effects of further restraints on the UK market
8.
The present world-wide boom in demand for textile including polyester/cottons makes it unlikely that further orders now placed on developing countries could lead to deliveries during the remainder of this year. Thus the introduction of further restraints would not have an immediate
effect on the supply position in the UK market, but would come into operation as a safeguard in the situation which is likely to develop next year, when we expect demand to slacken.
9. The restraint arrangements we concluded last year covered the period up to 1976 so as to establish a climate in which UK firms could expand production capacity and improve their competitiveness. Delivery delays on new plant are long (up to 3 years for weaving machines) so that most expansion plans still remain to be realised. UK production in 1973 is expected to be about 25 per cent higher than last year but this is mainly the result of better use of existing capacity rather
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