-11-
/whether
24.
It is clear that imports of non-cotton textiles from the developing countries will continue to increase and that sooner or later emergency action will have to be taken to restrict imports. Article XIX was written into the G.A.T.. to rect such a need. The question arises/her trading conditions have changed to such an extent that the remedy provided under Article XIX is no longer adequate to deal with the situation.
If so, there are effectively two choices: to negotiate a new arrangement for non-cotton or to ignore the problem altogether by letting the countries concerned resolve their problems bilaterally. The choice for the United Kingdom must depend on our assessment of the contribution which each would make towards the policy objectives listed in paragraphs 8-12 above.
25.
A policy of voluntary restraint would contribute to these objectives if it proved more effective than Article XIX in :
a) limiting the use of quotas to restrict imports of textiles (including cotton textiles) from the developing countries;
b)
improving the U.K. balance of trade in textiles either by reducing imports from the developing countries by allowing exports to the developed countries to increase faster than would otherwise be the case;
c) deterring the United States from imposing restrictions on imports of other goods of more importance to our export trade;
a) increasing the standard of living in Hong Kong;
e)
maintaining respect for the G.A.T.T.
The limitations of Article XIX
26.
Article XIX allows member countries to suspend, withdraw or modify their obligations under the Geneva Agreement if as a result of unforeseen developments any product is being inported in such increased quantitics and under such conditions as to cause or threaten serious