7.
The other flaw in the argument is that it takes cotton yarn as an isolated product, whereas it is total imports (Yarn + made-up goods) that affect the industry. The import of yarn in fabric form causes even more difficulty for spinners than imports of yarn itself because when fabric is involved spinners have no opportunity to compete at any stage of production. Imports of cotton yarn per head of population by the Six from the developing countries have now overtaken those of the UK but when fabric is taken into account the result of the comparison is reversed. Tables 1, 6, 7 and 8 provide greater detail but the outline statistics, in absolute and per capita terms, are shown in Table 5.
TABLE 5
IMPORTS FROM QUOTA CONTROLLED COUNTRIES*
Weight (metric tons)
1971
1972
UK
The Six
UK
The Six
Cotton yarn
8 112
15 421
8 765
39 532
Cotton woven fabric
59 510
43 047
44 316
49 144
67 622
58 468
53 081
88 676
Index related
to population
TUK 100 in each year)
Cotton yarn
100
56
100
125
Cotton woven fabric
100
21
100
33
100
25
100
49
*Countries subject to quota by the UK in July 1973.
COTTON YARN UK BALANCE OF TRADE WITHIN THE EEC
21. Trade flows within the EEC provide some indication of the relative efficiencies of the national spinning industries of the Community. Using this measure of comparison, the UK's competitive position within the Community is shown to be sound and to have improved steadily since 1971. Table 9 illustrates the turn round in the last two years from a net deficit of 820 metric tons in trade in cotton yarn with the Six in the first half of 1971 to a surplus of 1 422 metric tons in the same months of 1973. Over the same period there was also a substantial increase in the UK's world cotton yarn exports.
ARTIFICIAL PRICING POLICIES
22. Spinners in several of the low cost countries have to comply with government enforced pricing schemes in their export sales. The three exporting countries of significance where artificial export pricing policies have been most consistently employed are India, Pakistan and Turkey. Of these, India and Pakistan have traditionally been heavier exporters of yarn to the UK than to the
Six.
23. The schemes are complicated, particularly where they are associated with cotton growing subsidies. The Indian and Pakistani schemes are characterised by their carrot and stick neature: the earning of foreign currency is rewarded by the issue of import licences to make foreign currency purchases, failure to meet a specific export target means, at best, resort to black or free market currency deals to finance essential import requirements and, on occasion, the payment of a fine. Another feature of the Indian and Pakistani schemes is their flexibility and the frequency with which their terms are altered and/or the emphasis as between
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