N.Z. wool under threat in U.K.

Press, 9 November 1978, Page 17

N.Z. wool under threat in U.K.

ANGUS STEWART, formerly of Christchurch, is concerned about the future of New Zealand wool in Britain. The following is the first in a series of two articles.

Stewart has lived in London for 15 years. A successful fashion designer, he now has his own label. Bengey. He has worked as a fashion director for a large British chain of department stores and travels to Europe regularly. He writes for British newspapers.

How secure is Britain as a market for New Zealand wool? How often is this question asked in New Zealand? Perhaps not often. Nor is its reverse posed here, in Britain.

How long will New Zealand’s wool be available for British factories to process and for British salesmen to sell when processed both within the United Kingdom and the E.E.C.. and further abroad? Continuity of supply is as important as continuity of market, but New Zealand as a 5001*06 of raw w’ool is seldom mentioned in British circles except as an established and immutable fact.

The British spare occasional moments to regret the threat to New Zetland lamb and the potential loss of comparatively, inexpensive butter, out few signal the threat to wool. British purchases of all categories of New Zealand wool peaked in 1.968-69, and since then have been each year substantially lower. In 1976-77 they w'ere a third less than in 1968-69. Figures released in Lon-

don based on data issued by the Department of Statistics in Wellington and the New Zealand Wool Marketing Corporation are prefaced by the assertion that United Kingdom imports of coarse crossbred wool show a steady increase since 1973-74. In 1976-77, imports were marginally over 19,000 kilograms compared with the 1968-69 figure of 25,000. Can comfort be drawn from a three-year period for one category? An analysis of where wool is processed would be valuable to New Zealand if it was possible to establish the end uses of her clip. Obviously, much of the wool is used lor carpets, but how the balance is distributed between clothing, blankets, and hand knitting yarns is not known. Nor is it known where the respective processing takes place.

These are amazing gaps in marketing Knowledge. Apparently the last survey was carried out nine years ago and is, not surprisingly, out of date. Assess-

ing the permanence of the British market for Nc.w Zealand wool must be based on the past performance of the British clothing and textile industry as a whole. An analysis is hardly reassuring for the supplier of any raw product. In the 10 years between 1967 and 1977 the industry reduced its number of employees by 25 per cent. In the last year 20,000 jobs have been lost and production is underfilled by 3 per cent. Although there are productivity increases in some sectors they do not reflect a growing or vibrant industry. Rather they are the gasp of the infirm claiming recovery; the patient after losing a limb aspiring to be of Olympic status again.

Despite enthusiastic butchery within some sections of the industry the growth of imports is more noticeable than the increase in home grown goods. In general, the dilemma and decay is both British and European. Since South-East Asia and Eastern Europe have

matured as producers of clothing and textiles the sophisticated markets with high labour costs have been deluged with cheaply produced goods. The equally cheap verbal label hung on these imports implied inferior design, inadequate make, and insubstantial wear. Europe so misdescribed the invading tide, for although skimpy in concept and execution, they clothed, and that far the mass of Europeans was all that was required.

In the 19605, the cheaper merchandise flooded in, undercut the indigenous costs, and established itself as a strong partner in the world of retail merchandise. In the 19705, when a more indulged market demanded higher quality, better design, and more variety, almost magically the low cost countries produced them. Although the European manufacturers of textiles and clothing were finding themselves without sufficient work they were nowhere near a competitive stance.

Individual European countries found themselves in a quandrv; many did not have the chance to act alone: they were bound by treaty to their neighbours. A specific bondage might have been handleable. Their position was more acute and less well defined. They were merged into a union that

as yet only half existed, under the Treaty of Rome. In the old days when all roads led to Rome, Britain’s rulers tried to make sure the same roads did not funnel back undue influence on their island affairs. The E.E.C.’s headquarters migrated north to Brussels but the problem that bedevilled medieval Britain is today’s. Just as the Papacy's rulings, pro-

crastination, and taxes infuriated and confused Henry 11, so do the E.E.C.’s now debilitate Britain’s industry. Nowhere is this mote aptly expressed than in the E.E.C.’s belated response to Britain’s pleas for the observance of the multi fibre agreement accepted by the E.E.C. s Council of Ministers last December.

The deal negotiated between the E.E.C. and the low-wage countries established the amount of imports acceptable from each country for each category per year, allowing an increase in subsequent years. Although protectionist to an extent, the arrangement was generous in comparison with limitations and tariffs imposed by the United States and other countries. The multi fibre agreement was welcomed in Britain as the first sign of the E.E.C. recognising the importance of a textile converting industry. Previously, the E.E.C. had

been almost a free market to any world processors. However, the M.F.A. was to limit the increase in imports to an agreed figure and to enable the indigenous industries to reorg nise.

The E.E.C. wishes to protect the 2,750,000 jobs the clothing and textile industry currently provide. Apart from their importance as employers , the companies are strategically placed to maintain regional employment for if they relinquish their people it is unlikely that there would be other job opportunities. In addition, allowing imports to increase would greatly aggravate an already difficult balance of payments problem.

Taken all .in all, the E.E.C. rather belatedly recognised that one form of self interest demands the retention and protection of at least part of its clothing and textile industry.

The industry also has a role strategically. If the production sources are allowed to shrink below a reasonable level, and if the E.E.C. is ever cut off from its external successors by war. or natural disaster or oil prices, the population would have problems keeping itself warm, providing bandages, parachutes, and tents —

even rags to clean weapons. However, the E.E.C. has

to face trading facts which are not clear cut, for there are other industries — high technology, ship building, etc — who have to sell outside the E.E.C. to be economic. To be able to buy from the E.E.C. customers must sell to the E.E.C., and clothing and textiles have been accepted as the developing countries’ inlier mt and rightful export into Europe. Inevitably, the E.E.C. must accept the imports. Its own prosperity is dependent on selling more and more to developing countries. Already a quarter of the E.E.C. exports go to the Third World, and over the last four or five years it has been a healthier and more demanding market than the developed countires. There is no way that a determinedly international E.E.C. can actively discourage the imports of clothing and textiles. The British Textile Confederation and other national bodies can, by lobbying, stem the tide, but only temporarily. They can negotiate a strategic industry; eventually they will most certainly have sections that are subsidised; in Italy and France and in some ways in the United Kingdom this is already true.

(Tomorrow: Vital questions New Zealand must answer).