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Reference
indeed I was told that there were a number of other similar restrictions. Problems had arisen as a result of trade being diverted through third countries, but these problems had been successfully overcome.
6. Another point you may like to bear in mind is that the American need could be met by negotiating a new agreement for non-cotton textiles. The advantage which Mr.Nehmer secs in the L.T.A. is that the importing country is the judge of what constitutes market disruption and we have recently seen, in the Swedish case, how this provision can be abused (in the case of cotton) to impose restraints on trade which has not increased, relatively or absolutely. The last thing which should appeal to Hong Kong is an extension of the present Arrangement to other fibres. They may think that this would give them an opportunity to aggregate the cotton and non-cotton quotas, to allow for swing, but I am quite certain that the Americans would never agree to this and we ourselves would have the greatest difficulty in doing so because it would put us at a serious disadvantage vis-a-vis other supplying countries. What we need is a new set of rules which will make the original objective of the 1.2.A. a living reality. This could best be done under Article XIX of the G.A.T.T. accepting the need in the case of textiles for strictly temporary arrange- ments in the case of particular items, such as shirts, where imports have been rising so rapidly and in such large quantities that the domestic industry has had considerable difficulty in adjusting itself to the situation. The Americans, and others, would be able to make use of Article XIX in this type of case, thus letting the Nixon administration off the hook on which they have impaled themselves.
7. It follows from the foregoing that I would like to omit the final sentence of paragraph 5 of the submission and the final sentence of paragraph 4 of the draft telegram. I should also like to strengthen the case for United Kingdom participation, in the expectation that the F.C.0. would be represented at senior official level, perhaps by Sir Arthur Snelling himself.
The Hong Kong fear is that, in the last resort, we would not support them in the G.A.T.T. I hope that this fear is groundless and that we can be seen to be giving them our strong support.
Mr. D. I. Dunnett (CRE-1)
CC:
Mr. Carey (1.1)
Mr. Goldsmith (CRE-1)
Mr. Magor (CRE-4)
Mr. Jupp (1.1)
Kr. Toms (CRE-2)
Mr. Kemmis (CRE-1)
Miss Elliott (CRE-1) Miss Dumble (CRE-1) Mr. Pownall (1.1)
S. STEWART Ind.1.
29th April, 1969.
Mr. Whitehead (F.C.0.) 3 copies