) .
( 12 ) MEANWHILE , IN JULY 1977 , THE COMMISSION HAD CALLED UPON MEMBER STATE GOVERNMENTS TO AVOID AGGRAVATING THE OVERCAPACITY PROBLEM BY GRANTING ANY FORM OF STATE AID TO THE SECTOR . THE AID DISCIPLINE INTRODUCED IN 1977 IS STILL IN OPERATION .
( 13 ) THE 1978 AGREEMENT WAS PROVISIONALLY IMPLEMENTED PENDING A COMMISSION DECISION AND THE CAPACITY-REDUCTION TARGET WAS IN FACT GREATLY EXCEEDED : BY THE END OF 1981 , INSTALLED CAPACITY HAD BEEN CUT BY AN AVERAGE OF 20 % FROM 1977 LEVELS .
( 14 ) NEVERTHELESS , AFTER A THOROUGH REAPPRAISAL OF THE SITUATION ON BOTH THE EUROPEAN AND THE INTERNATIONAL MARKETS , THE SAME PRODUCERS CONCLUDED THAT THERE WAS STILL NO PROSPECT OF A SIGNIFICANT UPTURN IN DEMAND BETWEEN 1982 AND 1985 AND THAT ANY INCREASE IN CAPACITY DURING THIS PERIOD WOULD CONTINUE TO BE DAMAGING TO THE INDUSTRY .
( 15 ) FOR THESE REASONS , AND IN ORDER TO CREATE FAVOURABLE CONDITIONS FOR LONG-TERM RESEARCH AND DEVELOPMENT TO ENABLE THE INDUSTRY TO OFFER CONSUMERS IMPROVED PRODUCTS AND FACE THIRD-COUNTRY COMPETITION , THE PRODUCERS AGREED TO CARRY OUT A FURTHER ROUND OF CAPACITY REDUCTIONS AND , TO THAT END , SIGNED THE AGREEMENT OF 21 OCTOBER 1982 WHICH IS THE SUBJECT OF THIS DECISION .
THAT AGREEMENT WAS NOTIFIED ON 10 NOVEMBER 1982 AND WAS SUBSEQUENTLY AMENDED ON 9 MARCH AND 19 JULY 1983 IN RESPONSE TO OBSERVATIONS MADE BY THE COMMISSION .
4 . THE PRESENT CONTENT OF THE AGREEMENT
( 16 ) THE SIZE OF THE PROJECTED CAPACITY REDUCTIONS HAS BEEN BASED ON THE FOLLOWING ASSUMPTIONS :
- CAPACITY MUST BE OPERATED AT AT LEAST 85 % TO BE ECONOMIC ,
- SALES WILL STABILIZE AT 1981 LEVELS BY 1986 .
THE SIGNATORIES' SALES OF ALL THE PRODUCTS COVERED BY THE AGREEMENT IN 1981 TOTALLED 1 373 000 TONNES . ON THE BASIS OF A MINIMUM CAPACITY-UTILIZATION RATIO OF 85 % , CAPACITY STILL NEEDS TO BE BROUGHT DOWN TO 1 640 000 TONNES . THE AGREEMENT THEREFORE CALLS FOR CUTS TOTALLING 354 000 TONNES IN THE SIGNATORIES' COMBINED PRODUCTION CAPACITY FOR SYNTHETIC FIBRES BY THE END OF 1985 , NAMELY 57 000 TONNES OF POLYAMIDE TEXTILE YARN , 42 000 TONNES OF POLYAMIDE CARPET YARN , 61 500 TONNES OF POLYESTER YARN , 33 000 TONNES OF POLYAMIDE STAPLE , 71 500 TONNES OF POLYESTER STAPLE AND 89 000 TONNES OF ACRYLIC STAPLE .
( 17 ) ON THE BASIS OF THIS OVERALL CAPACITY REDUCTION REQUIREMENT , EACH SIGNATORY HAS DRAWN UP ITS OWN DETAILED PLAN , TAKING AS ITS STARTING POINT THE CAPACITY IT WAS SUPPOSED TO HAVE BY THE END OF THE 1978 AGREEMENT , AND ALLOWING FOR ANY INTERVENING TRANSFERS OF CAPACITY BETWEEN SIGNATORIES OR BETWEEN SIGNATORIES AND NON-SIGNATORIES .
THE ADDITIONAL REDUCTIONS WHICH SOME FIRMS MADE INDEPENDENTLY OVER AND ABOVE THEIR QUOTAS UNDER THE 1978 AGREEMENT ARE THUS ALLOWED FOR IN CALCULATING THE FURTHER REDUCTION NOW REQUIRED OF THEM .
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