In discussion, the following were the main points made
(a) So far as cotton textiles were concerned, there was general agreement that it was impracticable to seek termination of the LTA before 1972; indeed it would be onbarrassing as our tariff policy would not come into force until that date. We should therefore fall in with any proposal to extend it for a period of two to three
years.
The
(b) It was likely that most of the developed countries would have to take action over the next decade to restrain imports of non- cotton textile garments. We and the Scandinavians would probably face increasing difficulties from Portuguese imports. United States and Canadian markets would be under increasing pressure from Hong Kong and Japan, which was now the second largest producer of man-made fibres. Japanese yarn and cloth made up into garments in other Asian countries posed a threat to most European countries.
However, the
(c) If the United States failed to extend the scope of the LNA to non-cotton textiles, they were likely to enter into further bilateral voluntary restraint arrangements with their main suppliers. This could lead to similar action being taken by other countries, resulting in an unco-ordinated proliferation of voluntary restraint arrangement s or even eventually to an LTA for non-cotton textiles. United States tended not to like bilateral arrangements because they had no statutory power to restrict imports from particular countries, and they might welcome our proposal for a Working Party to consider strengthening Article XIX. If so, this made it important that any study of Article XIX should not be limited to textiles, otherwise the United States might see little difference between this and their
The terms of reference of proposal for a non-cotton textile UTA. the Working Party would be crucial and required further study. There was nevertheless, no guarantee that the Working Party would not, in the end, lead to an extension in scope of the LTA, since the LIA itself had come about following the unsatisfactory outcome of a previous GATT Working Party on textiles set up to consider the criteria for 'serious injury',
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