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In April, Mr. Stans, the U.S. Secretary of Commerce, who has
assumed personal responsibility for solving the textile problem,
visited Europe and later the Far East to sound out the reactions of
the major supplying countries and to float the idea of a special
conference in GATT. He was surprised by the strength of the
resistance he met and on his return to the U.S. undertook to put
forward recommendations to the President on a possible solution.
These long-awaited recommendations have now been given to the
President. Their content has not been disclosed to our Embassy
in Washington, but it is thought that they contain the suggestion
of an extension of the LTA to include non-cotton textiles and the
possibility of unbinding U.S. textile tariffs. The reaction of
other Government Departments in Washington to these proposals is
understood to be unfavourable and the President is expected to make
a decision shortly.
In general, the U.S. preoccupations with combating inflation
and solving their balance of payments problems are assuming
increasing importance and most other trade problems, with the
exception of their opposition to the E.E.C. Agricultural policies,
are consequently temporarily assuming less importance.
There is a strong move towards protectionism in several sectors
of the U.S. economy and this is gaining increasing support. from some
unions.
Any move by the Administration to give inxx to the textile
lobby is certain to spark off an avalanche of protectionist
pressures from other sectors of U.S. Industry, and the true test of
the New Administration's declared free trade policies will be their
ability to withstand these pressures.
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