GATT without commitment.
He had gained the impression
that in Europe Mr. Stans had said that it would be Asia
and not Europe who would be hit by the proposed restrictions.
Hong Kong would be very sensitive to the effect of unilateral
voluntary restraint by Hong Kong in allowing others (including
developed countries) to fill the gap.
The reference to GATT involved some brief discussion
in the context of the bilateral negotiation on which it had
taken place with Canada but this was inconclusive.
Mr. Stans repeated the three alternatives as he saw them
and stressed that unilateral action would involve legislation
by the US Congress;; the Executive Branch of the Government
could not take action independently. Sir J. Cowperthwaite
commented that legislation would also be needed in Hong Kong
where there was no separation of powers.
Mr. Katz said that the US authorities were well aware
of the risk of a spreading infection of protectionism.
In their view there was a clear relationship between not
doing anything on textiles and the spread of protectionism.
Textiles had the votes in Congress. If a Textile Bill were
to pass it would bring other protectionist issues with it.
If textile pressure could be thwarted in Congress, the other
Bills could not pass alone.
In reply to a question about reactions to Mr. Stans'
proposals from other countries, Mr. Stans said that he had found
great concern but had not run into open arms. In one case
there had been a definite refusal before he got to the country
11 -
/ concerned.