C.F.M.(69)C15
29 August 1969
17
COPY NO.
HER MAJESTY'S TREASURY
COMMONWEALTH FINANCE MINISTERS' CONFERENCE 1969
COTTON TEXTILES
Note by Foreign and Commonwealth Office
SUMMARY
1. The report by the Textile Council, published on 31st March this year, made a number of recommendations to the Government and to the Indus try for future policy. The main recommendations addressed to the Government concerned the control of imports (53 percent of Britain's total consumption of cotton textiles is imported) and financial assistance to encourage re-equipment of the industry. On 22 July the President of the Board of Trade made a statement (Annex B) of the Government's decisions on these recommendations.
2.
On imports, which is the main interest overseas, the President said that the Government accepted the Textile Council's recommendation to replace the present quota system by a tariff on imports from the Commonwealth Preference Area. The change would be effected on 1 January, 1972. Thereafter, the use of quotas would only be considered on particular products if total imports of cotton textiles (from all sources) rose significantly above the present level and caused disruption to the market in those particular products.
or
3. It is expected that the main adverse effect of the change will be felt by developed countries. Except possibly for India, the developing countries should be able to maintain their trade at, near, its present level. Any adverse effects on India's exports, arising from the tariff, will be taken into account when the time comes to determine the level of aid to India after 1972, against the background of her general aid requirements at that time,
4.
Commonwealth Finance Ministers may say that the tariffs will be a serious breach of the Commonwealth Preference System and some may also refer to contractual rights to duty-free entry into the British market which apply in their particular cases, namely Canada, Australia, New Zealand, India, and South Africa; Pakistan has the right of parity of treatment with India. India, Pakistan and Canada are likely to protest most. The matter may also be raised by Hong Kong delegates outside the Conference room.
5.
The Finance Ministers may also object to the continuation of duty-free entry for cotton textiles from the EFTA countries (in particular Portugal) and the Irish Republic.
6.
There are no points which the British delegation should take the initiative in raising.
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CONFIDENTIAL
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