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REFUSAL TO HOLD A GATT CONFERENCE MR NIXON WILL TELL THE US TEXTILE INDUSTRY THAT THERE IS NOTHING MORE WHICH CAN BE DONE AND THAT HE WILL SUBSEQUENTLY RESIST ANY PRESSURE IN CONGRESS FOR QUOTA LEGIS- LATION. HE THINKS THAT IF A CONFERENCE IS HELD THE U.S. DELEGATION WILL BE UNDER INTENSE PRESSURE FROM US INDUSTRY, THAT AMERICAN REPRESENTATIVES MAY SUCCEED IN JOININIG THROUGH DEALS WITH INDUSTRY REPRESENTATIVES FROM OTHER COUNTRIES BEHIND THE SCENES AND THAT IN THE END SOME SORT OF HIGHLY UNSATISFACTORY AGREEMENT WOULD EMERGE. MOREOVER IN HIS VIEW IF THE CONFERENCE WERE NOT SUCCESSFUL PRESSURE FOR LEGISLATIVE ACTION IN THE U.S. WOULD BE GREATER THAN IF MR STANS ENCOUNTERED A. DEFINITE REFUSAL NOW.
3. WE THINK THERE IS FORCE IN THESE ARGUMENTS AND THAT THE UK AND OTHER EXPORTING COUNTRIES MAY BE ON A SLIPPERY SLOPE ONCE THEY AGREE TO ATTEND A GATT CONFERENCE. BUT IT IS A FINE TACTICAL JUDGE- MENT WITH VERY LITTLE EXPERIENCE OR EVIDENCE TO GO ON. WE DO NOT KNOW HOW STANS AND THE ADMINISTRATION MAY REACT TO A BLUNT REF- USAL AND IT WOULD BE BETTER TO AVOID ADOPTING TOO RIGID A POSITION BEFORE HE HAS STATED HIS CASE. A POSSIBLE TACTIC WOULD BE TO TELL MR STANS THAT HIS PROPOSAL WILL HAVE TO BE STUDIED AND TO ASK HIM TO PROVIDE ECONOMIC (AS DISTINCT FROM POLITICAL) MATERIAL TO SUPPORT HIS CLAIM THAT AN EXCEPTIONAL SITUATION HAS ARISEN IN THE WOOL AND MAN-MADE FIERE TRADE. LATER ON, IF NECESSARY, WE MIGHT CONSIDER THE POSSIBLITY OF SUGGESTION TO THE AMERICANS THAT THEY MAKE THEIR CASE THROUGH THE NORMAL GATT MACHINERY IN THE FIRST PLACE, FOR INST- ANCE IN THE INDUSTRIAL PRODUCTS COMMITTEE. IT WILL IN ANY CASE BE IMPORTANT TO POINT OUT TO MR STANS THAT WE CAN HAVE LITTLE CONFIDENCE IN AMERICAN ASSERTIONS THAT TEXTILES REPRESENT A UNIQUE PROBLEMFOR THEM AND THAT OTHER INDUSTRIES WILL NOT BE ABLE TO DEMAND SIMILAR PROTECTION. WE SHOULD ALSO EMPHASISE THAT THERE ARE INDUSTRIES IN THE UK AND -IN EUROPE WHICH COULD MAKE A POLITICAL CASE FOR PROTECTION FROM IMPORTS AND THAT IT WOULD BE DIFFICULT TO DENY THEIR CLAIMS IF A SPECIAL AGREEMENT WERE NEGOTIATED FOR THE BENEFIT OF THE U.S. TEXT- ILE INDUSTRY. IN SHORT, THE BEST TACTIC AS SEEN FROM HERE WILL BE TO STALL THE AMERICANS ON THE PROPOSAL TO HOLD A CONFERENCE
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