10.
-
2.
RESTRICTED
He told me that the principal thing he wanted to impress on me was "the mood of the Congress". something had to be done and so forth. He was quite frank about President Nixon's political commitment to help the textile industry and wished to impress on me that this commitment had got to be met somehow.
declining
11.
Mr. Jurich spoke of the employment aspects of the problem employment in mill towns in the South and all that but was surprised and a little incredulous when I said that I understood that textile employment at 21 million was an all-time high, and certainly at the highest figure that it had been for some years now. I went on to develop the argument that if within an overall increase in employment in this industry some firms were having to close down and some people were losing their jobs, this could not, in a situation where imports were still measured in millions of pounds while production was measured in billions and imports had still less than 10 percent of the market, be attributed to the level of imports, but derived rather from the competition of the larger and more efficient units. In this situation such action against imports as Mr. Stans had proposed, i.e. only a moderation in the rate of growth, would not help the people who are in trouble. The internal competition that was driving them out of business would continue to do so.
I told Mr. Jurich that this was what I had said to Mr. Stans, and that I had said that it seemed to us that the only hope of helping the se people lay in a relaxation of the adjustment assistance provisions which could be operated in a more selective manner than could even categorised controls on imports.
12.
I also said that I thought that if the Treasury's measures to reverse inflation succeeded, they would probably solve Mr. Stans' problems for him because imports would probably decline more than domestic production. Mr. Jurich accepted that this was a pessibility but said that it would take time. To this i replied that it would clearly be some time yet before any success could be achieved in the attempts to reduce imports since in Tokyo it had been agreed that a Japanese fact-finding mission should go to Washington in September to be given the facts about the dreadful difficulties of the U.S. textile industry. I said, and Er. Jurich did not demur, that I thought the Americans would have a very difficult time with the Japanese in trying to persuade them that the facts they produced supported the case when all the indicators were still on an upward trend. Then I said the Cotton Textiles Committee is not now reeting until October and before we know where we are, we will be running up to the Christmas holidays.
13.
Fr. Bach joined in with a reference to escape clause action. I said that while action under Article VIY could be taken when damage could be proved, it was clear that the U.S. textile industry overall did not provide such a case. I went on to say that we were concerned that if the Congress passed a unilateral quetas bill and the President assented to it, this would involve the U.S.Govern- ment in action contrary to their G.A.T.T. obligations and would put what could be an intolerable strain on the rather fragile framework of the G.A.T.T.
If a country like America broke the rules it would be a great incentive to others to do so too, and we might all soon be moving backwards with accelerating speed towards the 1930's. r. Jurich's line then was that this was a risk that might have to be taken. The mood of the Congress was such... the President had a commitment... the textile industry had to be helped...
14.
As we were leaving the diningroom, Mr. Jurich said that Mr. Stans had asked him to come to Hong Kong to discuss this subject with us and ask us if we could think of any solution to this problem.
15.
When we were talking about Japan, Mr. Jurich referred to the strong feeling in America about Japanese trading and financial practices and said that the Japanese had got to give way somewhere. I suggested (and Mr. Jurich agreed) that there was a possibility that the Japanese might make some concession in the textile field just because they knew that it was not necessary and would have little real economic effect on Japan's trade, while they would keep the things that would really matter to them and, in economic terms, really matter to the U.S. I thought that while this might solve Mr. Nixon's problem with the textile industri thus to forego concessions of real value would be a rather high price to pay.
16./