Mar 20, 1984

NO EVIDENCE THIRD WORLD EXPORTS DISRUPT INDUSTRIAL MARKETS

GENEVA, MARCH 16 (IFDA/CHAKRAVARTHI RAGHAVAN) -- There is little factual or empirical evidence to support the claims in the Industrial countries that imports from developing countries are "disruptive" of markets, says the UN Conference on Trade and Development.-

The "market disruption" or "injury" argument, the secretariat notes, has been employed as a justification for imposing trade barriers in respect of certain imports.-

Despite reliance on this concept, there is no general agreement on appropriate criteria for establishing the existence of injury or market disruption nor how.-

Despite potential shortcomings, using the ratios of imports to consumption or production, to gauge the influence of import changes on market conditions, could be one approach to the problem of measurement.-

Some studies, on the basis of highly aggregated product sectors, show that share of imports from all regions in apparent consumption range from two to three percent for food, beverages, tobacco and rubber products. It rises to as much as 30 percent for primary products as a whole.-

There are also some wide variations in the penetration of imports across industries and industry groups.-

In the EEC, imports of all manufactures constitute over 12 percent of domestic consumption, but is less than six percent for Japan.-

Disaggregated statistics show that the overall divergence between the figures for Japan and the EEC, and to a lesser extent between Japan and the U.S.A., is primarily due to sectors, like transport equipment and rubber manufactures, in which Japan has developed a major export capacity.-

Textiles and clothing products are subject to "safeguard actions" (restriction of imports) under the Multifibre Arrangements (MFA).-

For textile products, imports from all sources account for ten percent of domestic consumption in the European Communities.-

But only four percent of these requirements are net by imports from the developing countries (which alone are restrained under the MFA).-

In both the U.S.A. and Canada, as well as Japan, the figures are less than half that of the EEC.-

The penetration ratios for clothing show that imports are a relatively minor element in consumption.-

Clothing imports account for about one-fifth of consumption in the EEC, U.S.A. and Canada, and 13 percent for Japan.-

But in all three markets, the developing countries account for less than ten percent of total consumption.-

Thus, for both textiles and clothing sectors as a whole, the import penetration ratios do not appear to reflect important market disruption or injury (as measured by rapid changes in the ratios) or even a high level of penetration by imports.-

It is possible, UNCTAD says, that these statistics may fail to reflect some important industry disruption owing to the high level of aggregation of the data.-

However, studies in which such information has been compiled have failed to confirm such a hypothesis.-

In one recent detailed analysis of U.S. data for over 50 of these industries, it was found that the level of market penetration by developing countries was often exaggerated.-

Also, the differential imposition of trade restraints on developing country products had actually resulted in a longer-term (1967-1977) decline in the growth of imports from these countries relative to consumption.-

Even more, there was "little empirical evidence or little general factual support for demands for protection against exports of developing countries on the basis that these shipments have been disruptive", UNCTAD adds.-