CYPHER/CAT A
CONFIDENTIAL
PRIORITY HONG KONG TELNO 8 TO WASHINGTON
CONFIDENTIAL
[NEUTRAL].
YOUR TELEGRAM 7.
FOLLOWING FOR HERMANN,
TEXTILE CONSULTATIONS.
THE PACKAGE IS INCOMPLETE AND UNACCEPTABLE.
Jur COPY
1 MARCH 1969
LAST
R F
4.2.
78
2. WE CANNOT AFFORD TO ENCOURAGE THE AMERICANS TO SEEK REVISION OF
THE AGREEMENT (THEIR PROPOSAL ON TOWELS IS IN EFFECT AN ARTICLE 3
REQUEST CONTRARY TO PARA. 17 OF THE AGREEMENT AND WITHOUT THE
SUPPORTING EVIDENCE REQUIRED UNDER ARTICLE 3L BY MIGUSING THE
PROVISIONS OF PARA. 8 OF THE AGREEMENT.
3. THE LIMITS FOR THE THRES TRIGGERED ITEMS SHOULD BE ESTABLISHED
ON THE MERITS OF THE CASES CCF PARA 1 OF YOUR TELEGRAM 580. ALTHOUGH
WE ACCEPT THAT THE AMERICANS CAN IN THE LAST RESORT DETERMINE THE
LIMIT, WE CAN UNDERLINE NEXT WORD AGREE ONLY IF THE MERITS ARE
ESTABLISHED.
4. IF THEREAFTER THE AMERICANS WANT A NEW SPECIFIC LIMIT CH CERTAIN
TOWELS THEN THEY SHOULD OFFER A COMPENSATING ADVANTAGE TO US AND IF
IT IS TO BE IN THE TRIGGERED CATEGORIES IT SHOULD INVOLVE HIGHER
LIMITS THAN THOSE ESTABLISHED ON THE MERITS OF THOSE CASUS,
5. I THINK WE MUST DISTINGUISH BETWEEN AN AGREEMENT ON TRIGGERED
CATEGORIES, WHICH COULD BE QUOTED AGAINST US AS A PRECEDENT, AND A
LIMIT IMPOSED ON US. EITHER WAY WE EXPECT THEM TO APPROACH TRIGGER
POINT CONSULTATIONS IN THE LIGHT OF THEIR OWN REMARKS IN THE 1966
NEGOTIATIONS (PARAS. 126, 212, 248 OF ENCLOSURE 3 TO BRIEF SENT
WITH DORWARD'S LETTER OF 9 OCTOBER 1958).
6. IN THE ABSENCE OF ANY EVIDENCE TO SHOW THAT ALLEGED UNDUE CON-
CENTRATION IS INJURING U.S. INDUSTRY (PLEASE EMPHASISE THIS), WE ARE
KOST RELUCTANT TO UNDERLINE NEXT WORD AGREE ANYTHING BELOW THE
FOLLOWING FALL BACK POSITIONS.
RECEIVED IN ARCHIVES No.31
CONFIDENT IA L
3 MAR 1969