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to befall. They therefore propose that the G.A.T.T. (not the Cotton Textile Committee) should be invited to set up a Working Party to consider whether and to what extent Article XIX could reasonably be invoked to deal with a situation in which rapidly increasing imports of a very small number of products have caused or threatened serious injury, in several countries, to domestic producers of like or directly competitive products. The Working Party would also consider whether the procedures under Article XIX could be modified so as to impose a greater degree of international discipline based on agreed criterion or guide-lines instead of the judgment being left, as it is now, to what may be the arbitrary decisions of individual importing countries. Meanwhile, we should agree to a three-year extension of the L.T.A.: but bearing in mind Article 3(6) of the Arrange- ment, which requires the importing countries to keep their re- strictions under review with a view to their relaxation and elimination as soon as possible we should propose that signatories should undertake:
(i) not to impose additional restrictions except under
Article XIX, and
(ii)
to agree to an annual review of their existing restrictions with a view to their abolition by 30th September 1973, it being understood that any restrictions remaining in force at that time would have to be applied non-discriminatorily under Article XIX.
19. Those who regard such a course, however desirable in principle, as impracticable would propose that we should let the E.E.C., the U.S.A. and any others who feel very strongly about it, make the running for an extension of the Arrangement. We would say that, provided we can continue with our quotas to the end of 1971, we should be perfectly content to see the Agreement terminated. On the other hand, if it is extended, we must reserve the right equally with others to take advantage of it in the circumstances set out in the President's statement. In short, we would avoid putting ourselves in the position of pressing either for the prolongation or the termination of the L.T.A.
NON-COTTON TEXTILES
The extent of the threat
20. In this sphere the first problem is to assess the present extent of the difficulties created for the importing countries and the pace at which these difficulties are likely to grow, remembering that the threat arises essentially from the export of garments. (The material for these is not necessarily
In other words the manufactured in the exporting country. exporting country may buy its material elsewhere and use its own cheap labour to make up inexpensive garments.)
The
21. Up to now the problem has been limited to a few products: trousers, shirts, sweaters, blouses and nightwear. principal exporters concerned are Hong Kong, Japan, Taiwan,
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