CYPHER/CAT A
ROUTINE WASHINGTON
TELEGRAM NO 297
CONFIDENTIAL
TO FOREIGN AND COMMONWEALTH OFFICE
31 JANUARY, 1969
CONFIDENTIAL,
NEUTRAL.
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FOR ATTENTION FIRST THING MONDAY.
MY TELEGRAM NO 249: TEXTILE IMPORTS.
THERE IS STILL LITTLE TO ADD TO THE PROVISIONAL ASSESSMENT
IN MY TELEGRAM UNDER REFERENCE, BUT IT NOW SEEMS FARLY CLEAR THAT
THERE IS NO PRECONCERTED POLICY BETWEEN MR MILLS AND THE ADMINISTRA-
TION, IN THE HOPE OF PROBING THE ADMINISTRATION'S THINKING
COUNSELLOR (COMMERCIAL) AND COUNSELLOR CHONG KONG COMMERCIAL
AFFAIRS) HAVE ARRANGED TO CALL ON 4 FEBRUARY ON ROBERT ELLSWORTH
IN THE WHITE HOUSE, WHO APPEARS TO HAVE THE JOB OF HANDLING THE
PRESSURES FROM THE DOMESTIC TEXTILE INDUSTRY.
2. THEY WILL OF COURSE MAKE IT CLEAR THAT THEIR PURPOSE IS
SIMPLY TO HAVE A GENERAL TALK ON A TOPIC CURRENTLY IN THE PUBLIC
EYE, BUT, SUBJECT TO YOUR VIEWS, WOULD MAKE THE FOLLOWING POINTS:
(A) ALTHOUGH THE DOMESTIC INDUSTRY IS EXERTING STRONG POLITICAL
PRESSURE IT IS FAR FROM CLEAR THAT IMPORTS ARE REALLY HURTING.
THE TARIFF COMMISSION'S REPORT A YEAR AGO DID NOT DEMONSTRATE
THIS, AND IN 1968 THE INDUSTRY'S PROFITS HAVE RISEN SUBSTANTIALLY: (B) ANY EXTENSION OF RESTRAINTS ON TEXTILE IMPORTS WOULD DAMAGE
AN IMPORTANT EXPORT TRADE FOR MANY COUNTRIES. THE SUGGESTION THAT
RESTRAINTS SHOULD BE VOLUNTARY MAKES NO DIFFERENCE, IT IS NOT CLEAR
WHAT COMPENSATION EXPORTING COUNTRIES COULD EXPECT TO RECEIVE:
(C) THE PROGRESSIVE EXTENSION OF RESTRAINTS WOULD UNDOUBTEDLY
ENCOURAGE PRESSURE FOR PROTECTION IN OTHER COUNTRIES FROM INDUSTRIES
WHICH FOUND IMPORTS, NOT NECESSARILY OF TEXTILES, INCONVENIENT:
(D) FOR ALL THESE REASONS THE QUESTION DOES NOT CONCERN TEXTILES
ALONE BUT RAISES BROAD ISSUES OF FOREIGN TRADE RELATIONS.
LAST
REF..
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CHAU TINDIA
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