6
growth rate is still lower than 6. We also accepted growth rates of
0.5 in some categories in the case of Germany, In the case of the USA, ow bilateral agreement provides for an overall growth rate of 6.25%
but we accepted a growth rate of 1 for their most sensitive product - wool textiles and clothing.
16.
Are import penetration levels in the UK unacceptable because of
the growth rate provided for in the 12A? The answer is probably that
import penetration levels in some products are quite high not because
of the growth rate of quotas but because of the tardiness with which the Community went about seeking restraint agreements under the MFA with its main low-cost suppliers. The Commission had already told us, long before the MFA came into effect on 1 January 1974, that they would wish to negotiate an agreement with us as soon as possible.
fact.
awo not ready to enter into negotiations until early
1975. The negotiations started in March 1975 and were not concluded until July mainly because of the Community's slowness and inflexibility
in modifying its negotiating positions.
17.
**
in
In any case, since the UK is itself such a large exporter
of textiles, it is meaningless to talk about import penetration because this is only a comparison of imports with domestic consumption and excludes comports. In 1976, consumption of textiles and clothing in the UK amounted to £5,125 million, 3% of which was accounted for
by imports of £1,595 million, while exports amounted to £1,346 million or 26 of consumption and 84% of imports. With exports running at
such a high level compared with imports and consumption, the lovel
of inport penetration is obviously not a valid measure of the state
of the UK industry. Exports must be taken into account and the only
trus measure is the level of production. The UK's production indices (1970 = 100) show that production in 1976 in both textiles and clothing increased in the former case from 93.8 to 96.4 and in the latter frca 115.3 to 116.4. We do not know whether Mr. Meacher's
definition of import penetration includes all imports into the UK. If it does, then the argument against the MFA becomes even less valid, because a large proportion of UK imports are not and cannot be governed by the MFA. For instance, in 1976. 45% of textile imports and 24% of clothing imports came from other Member States of the Community. These
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