Administration
necessary to allow the United States/to hold off all
stat
es/to
pressures from other industries for protection, and to
allow President Nixon to implement his expressed belief
in free-er International Trade. He hinted that, in practice,
the Americans would be satisfied if they could discriminate
against certain Asian low-cost producers. Other countries ·
had to chose between a multi-lateral solution, bilateral
arrangement or unilateral action by the U.S. Congress.
We told Mr. Stans that, given the rising prosperity
of the U.S. textile industry generally, and the low
proportion of imports in American textile consumption, we
saw no economic justification for restraint on non-cottons.
We doubted the value of a GATT conference, proposed by
Mr. Stans, on multi-lateral restraints. We thought that
extension of the scope of the LTA would trigger off protectionist measures around the world and would upset
relations with the LDC's and UNCTAD, We emphasised our
special concern and responsibility for Hong Kong.
When Mr. Stans visited Hong Kong in May, the authorities
←
there showed down his suggestion that they had benefitted (tet)
from the LTA on cottons and stressed that a multi-lateral
arrangement, on LTA lines, for non-cottons would spread
the virus of protectionism to the detriment of Hong Kong.
Hong Kong, with no raw materials, depended on her exports
and restrictions on her trade would be "grist to the
Communist mills".
It was pointed out that the Americans were ignoring
the damage to the smaller U.S. producers caused by the larger
3