4.
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(iv) Raising of tariffs against textile imports. If done
legally, the provisions of Article XXVIII or Article XIX
of the GATT would have to be observed.
}
(v) Voluntary export restraint arrangements concluded with
the countries whose exports are judged to be damaging.
The foregoing alternatives are briefly examined in the following
paragraphs. So far, our information both from our Embassy in
Washington and from other sources such as the Director-General of
GATT, suggests that there is still a fair chance that the United State
may in the event be sufficiently impressed by the general opposition
which Mr. Stans' proposals have encountered, to refrain in the end fro
taking any particular action at all. Since this is clearly the outcom
which we should prefer, it is important that we should neither
ourselves take any step, nor encourage others to do so, which might
A tend to weaken the front or give to the Americans the impression that
some measure restrictive of trade might gain international acceptance. The remarks which follow on individual possibilities of action by the United States should be read against this background.
Domestic Action
5. Since the need to combat inflation appears to be dominant among
current American preoccupations on economic matters, it is possible the
disinflationary policies, whether fiscal or monetary, will be followed
which will by themselves restrain the growth of imports. However, this
might make more acute, rather than alleviate, the present problem, since
the difficulties of certain sectors of the United States textile
industry might be increased. The advice was certainly offered to
Mr. Stans by more than one of the countries which he visited that the
United States should allow the inefficient sectors of its industry to
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