Japan launches probe of Asian textile imports

Japan launches probe of Asian textile imports

TOKYO (Kyodo): The Ministry of International Trade and Industry (MITI) launched a probe yesterday of certain Asian textile imports that could lead to Japan's first curbs on imports of industrial manufactured goods.

At the request of industry groups claiming damage from a flood of imported Chinese, South Korean and Indonesian thread and Chinese and Indonesian cloth, MITI chief Ryutaro Hashimoto said his ministry has begun the one-year investigation.

But he expressed hope that the exporting countries would restrict their own exports "to take care of the problems so that a decision does not become necessary."

The investigation, based on MITI rules drawn up in December, will not only cover the damage to domestic industry of the cheap imports but also the effects on consumers and Japan's trade policy if imports are restricted, MITI officials said.

The rules require MITI to complete the investigation within 12 months, but the officials said the ministry will try to conduct the probe as quickly as possible.

Industry leader Sadao Hirose called the probe "the first step of a policy of making imports orderly," urging that import curbs be launched "as quickly as possible."

"The recent rapid advance of the yen is accelerating imports and forcing the textile industry in an increasingly serious situation," the president of the Japan Spinners Association and of Fuji Spinning Co. said in a statement.

"I strongly hope for the enactment of import restrictions from the viewpoint of allowing the domestic textile industry to remain," he said.

The spinners' association sought restrictions on No. 40 count cotton thread imports, while the Japan Cotton and Staple Fiber Weavers Association sought curbs on imported poplin and cotton broadcloth.

If MITI decides to launch the three-year curbs under industry "safeguards" provided in global trading rules, imports would be frozen at previous year's levels for one year and allowed to rise 6 percent for each of the next two years.

MITI does not target any country for the curbs, but its documents show China, South Korea and Indonesia accounted for 78 percent of last year's 45,000 tons of the thread imports, with China alone accounting for 41 percent.

Of the 232 million square meters of the imported cloth, China and Indonesia provided 96 percent, with Chinese imports alone making up 76 percent of the total, the MITI figures show.

MITI rules allow for the curbs to be lifted during the three years if prices surge or if domestic makers do not show they are using the time to make structural adjustments. MITI must be "cautious" in launching subsequent curbs, the rules say.

The ministry decided to launch the probe after a preliminary investigation found import volumes and market share were soaring under the ministry's definitions.

Imports of the No. 40 count thread jumped 89 percent last year, with import share swelling 17 percentage points to 42 percent, MITI said. Domestic production fell 14 percent in the year.

Cloth imports fell eight percent in 1994 but following a 40 percent surge the year before they remained 28 percent higher than in 1992, MITI said. Domestic production for the two years fell 38 percent.