JAPAN'S ERODING POSITION IN WORLD TEXTILE TRADE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R001900010032-2
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 8
• Document Creation Date: December 19, 2016
• Document Release Date: May 16, 2006
• Sequence Number: 32
• Publication Date: November 23, 1973
• Content Type: MEMO

 Approved For Release M06.109.116 - 0875R001900010g32-2
C ms6 Ci '+ 25X1 # 8 `ICIV 197325X1
) Dc~ s --h3
Council on International Econo:
Policy
El n
SUBJECT Japan':i Eroding Position in world
Textile Trade
In response to convar;iations with :no.:bers of your
staff, we are sending the attachad information on Japan's
textile trade. Because of rising wage rates in Japan
and currency real irnr ants over the past t,ro yoars, tho
country's cor?'potitirc position in the textile industry
has heoon seriously eroded. As a result of these factors,
imports are soaring while overseas sales are increasing
only moderately. if you wish additional, information on
this or related matters, we would be glad to provide it.
MAURICE C. `I `J
Director
Economic Research
Attachment:
As stated
Distribution: (S-5694)
Original & 1 - Addressee
2 - D/Oi3:R
1 - D/I
1 -- S.'1/ER
1 - St PC
1
1 - I /JP
OL R/I/JPI
I (20 Nov 73)
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 Approved For Release 0875R001900010032-2
JAPAN'S ERODING' POSITION IN WORLD TEXTILE TRADE
Approved For Release
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JAPAN'S EROI)I,tiG POSITION IN 11'ORLt) TEXTILE TRADE
After many years of dominating world textile markets, Japan's
position as a net exporter of textile products is being rapidly
eroded. During the first 8 months of 1973, Japanese imports of
these goods totaled $898 million, up 191% from the same 1972
period. Imports of all types of'textile products have increased
sharply. Purchases of apparel and yarn and thread tripled, and
imports of fabrics and non-clothing goods grew by 184% and 164%
respectively (See Table 1).
The rapid growth in imports stems from Japan's weakening
competitive position. Wage rates in the Japanese textile industry
have increased sharply in recent years and are now higher than in
many Western European countries. Several currency realignments
have further eroded Japan's ability to compete in both domestic
and foreign markets for inexpensive textile products. The Japanese
textile industry is already complaining about the flood of imports
and Tokyo is now considering quantitative controls. Japanese
imports of synthetic yarns and threads have increased sharply
because of the industry's capacity constraints, but these items
accounted for only a small share of the increase in textile
imports this year.
Low cost producers, particularly South Korea, Taiwan, and
the People's Republic of China, are making substantial inroads
into Japan's market for inexpensive textile products. Imports
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from each of these countries have more than tripled. Purchases
from the United States, about 71, of Japan's total textile imports,
also are growing rapidly. During the first 8, months of 1973,
Japanese textile imports from the United States were $62 million,
73% higher than the imports of the corresponding 1972 period
(See Table 2). Imports of yarns and threads grew particularly
fast, reaching nearly $8 million, four times the level of the same
1972 period.
Japan's exports of textile goods have been sluggish. During
January-August, sales totaled $1.7 billion, only 7% more than in
the corresponding period of 1972. Sales of apparel actually fell
by 11%. Exports to the United States, normally one-fourth of
Japan's total textile exports, fell by 8%, partly because of
restraints on shipments to the United States. Sales to Western
Europe also are off sharply.
To cope with these problems, Japan is investing heavily in
overseas textile industries. These facilities are usually supplied
with Japanese intermediate products which are processed into
finished goods for sale in both the host country and third country
markets. Japan already has textile plants throughout Southeast
Asia and has established joint ventures in Costa Rica, Guatemala,
Brazil, and Peru. Plans are being made to set up textile operations
in Malaysia, Indonesia, and Mexico. Investment in the US textile
industry also is on the rise and recently announced agreements to
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establish two large Japanese-owned textile plants in the United
States will bring to at least 8 the number of such plant in,
the United States.
CIA/0ER
20 Nov 1973
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Table 1
JAPANESE TEXTILE TRADE
(Million US Dollars)
IMPORTS
EXPORTS
Jan-Aug
Jan-Aug
Jan-Aug
Jan-Aug
1972
1973
1972
1973
137
317
358
abrics
435
881
952
pparel
260
258
230
ade-up Goods
25
66
113
139
TOTAL
309
898
1,569
1,679
CIA/OER
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0875R00190001 d032-2
DIRECTION OF JAPANESE TEXTILE TRADE
(Million US Dollars)
January-August Janua
ry-August % Change
1972 1
973
South Korea
71.6 2
24.8
214
Taiwan
28.2
98.2
240
China
35.6 1
20.9
240
Hong Kong
11.1
44.3
299
United States
35.6
61.5
73
Western Europe
81.0 1
86.6
130
Other
46.2 1
62.0
251
TOTAL
309.3 8
98.3
190
EXPORTS
January-August
January-August % Change
1972.
1973
United States
342.7
316.8
Hong Kong
165.4
175.3
South Korea
71.5
161.1
Taiwan
47.2
74.2
Western Europe
79.7
63.6
Other
862.0
888.0
TOTAL
1,568.5
1,679.0
Including United Kingdom,
':' t:herlands and Luxemburg.
A/ORR
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France, Italy, West Germany, Belgium,
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