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said that in any case, employment could not be transferred from textiles to other industries overnight.
22.
Mr. Jordan pointed out that the Tariff Commission in 1968 had been unable to reach a conclusion that textile imports were causing damage to domestic industry, Mr. Stans said that the Commission's study was based on information gathered in 1966, and that the situation had changed completely since then, Mr. Katz stated that the Commission had noted that the impact of imports was not evenly spread, and that there were arcas of distress, but because of pressure of time, the Commission had not had the opportunity to explore further. Mr. Jordan said there were factors other than imports which had caused this distress.
23.
Sir John enquired as to how long it would take for the trend in the growth of imports to achieve a level which would deny all growth to the domestic industry.
24.
Mr. Stans said that through the years the United States had had a surplus in her balance of payments, but this had over the last year or so turned into a deficit.
The situation had occasioned great concern for the Administration, not the least being the $800 million deficit in 1968 in the textiles account. In 1969, the latter might well go over the $1,000 million mark.
25.
Sir John said the balance of payments difficulties experienced by the United States did not appear to be due to any particular import items, but were more attributable to inflationary pressures within the United States. To suggest that these difficulties were caused primarily by particular categories of imports was unreasonable, and to restrict those categories was a reflection of protectionism at its worst, not of free trade or freer trade. The balance of payments problem did not lie in trade but in the monetary field. Mr. Stans replied that textile imports had contributed to the loss of America's trade surplus, and provided the basic reason for agitation in the protectionist field. Mr. Stans went on to say that the psychology in the United States had changed, and that Americans no longer regarded themselves as the big uncle. He, however, acknowledged that inflation was a factor in the situation and that the Administration had in hand a number of measures to control it.
26.
Sir John said that the impression Hong Kong had gained of Mr. Stans' visit to Europe was that the American concern was principally with Asian producers, and enquired whether the United States would take action against European countries. Hong Kong was naturally concerned that others would move in to take its share. Mr. Stans replied that textiles was a general problem and this was why a multilateral solution was being sought. Sir John said that the argument for a multilateral approach was understood, but what could not be accepted was any abrogation of Hong Kong's G.A.T.T. rights.
27.
In reply to a question from Mr. Nehmer, Mr. Haddon- Cave said that the consultations with Canada on non-cotton items had been held "having regard to the spirit of Article XXII" of the G.A.T.T.
28.
Mr. Stans recapitulated the American stand, and outlined again the three alternatives he had mentioned earlier as possible solutions to the problem. He asked that sympathetic consideration be given to these proposals, adding that the Administration could not take unilateral
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