*
that this was a step in the wrong direction but "on a slippery road, it is some- Mr. Stans said times recessary to take one step back, to move further forward." that they were hoping for a meeting in the GATT to discuss the extension of the LTA; unless they could negotiate a reasonable settlement the decision would be taken
He quoted out of their hands and Congress would introduce unilateral restraints. from a telegram from Congressman Wilbur Wills emphasising the current Congression pressures.
31.
The Fresident sympathised with Er. Stans over the political problem but could not, from the figures he had soen, understand the economic grounds of his Case. Employment, capacity, profits and wage rates in the U.S. textile industry
The penetration all appeared to be rising while the opposite was trus in the U.K. of imports, compared to consumption, was also lower in the U.S. where the greatest He was disturbed ponstration in any area was 15% compared to over 50% in the U.K. et the potential effect of any extension of the ITA on less developed countries, He was most alarmed particularly in view of the current difficulties in UNCTÁD. at the protectionist impetus in the U.S. and pointed out that any failure to abolish ASP would have cerious effects on relations between the United States and Europe. The U.K., although still retaining one bilateral arrangement, could not be criticised for being illiberal on textiles, but if the Americans were to give in to protectionist pressures on such meagre justifications there would be a unrestrainable rise of protectionism in other industries and in other parts of the world. Ho suggested that ir. Stans should resort to increased assistance to the particular firms affected.
32.
Mr. Stans felt that indemnification for such a large industry would be impractical, too slow and too expensive. Mr. Dent emphasised the political problem,
If this saying that textiles were the only remaining prop of the protectionists. were removod President Nixon would be in a position to proceed with his liberal trade initiatives as President Kennady had been able to do after the negotiation of the LTA, Mr. Nohrer also drew parallels with the situation at the time of the negotiation of the ITA when cotton imports, particularly from the Far East, rison sharply.
had
33.
Mr. Carey 4ummarised the problems in the U.K. industry and outlined some of
He felt that en extension the moasures which had been taken to increase officiency. of the LTA was not in the best interests of the American industry as it protected the cutmoded elements and resulted in an industry which was badly structured and inefficient. The Minister of State (FCO) explained H.M.G.'s special responsibility for Hong Kong. He pointed out that 50% of Hong Kong's exports were already affected by the LTA and that any further restrictions would be extremely serious.
3hp Mr. Stans said that their proposals would not involve unemployment in Kr. Nehmor Hong Kong but that they would merely limit inoresses in exporte. montioned specific arees(such es pens' outer woollen wear) where Hong Kong exports woro particularly dieruptive and asked why H.E.G. had permitted Hong Kong to
To this the Minister of State regotiate bilateral doals with other countries.
replied that it had only occurred in particular cases where severe disruption had been proved.
35.
Mr. Stans appreciated the political significarse of Hong Kong but said that the choice was between an extension of the LTA involving no unemployment or
The Hollings Bill, for unilateral quotas involving considerable unemployment.
example, would have involved an 84% roll-back on Hong Kong exports.
36. The President thanked Kr. Stans for explaining the American view so clearly.
C.R.E. 4
Board of Trade
May, 1969.
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