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3. IT IS SURPRISINGLY OUT OF CHARACTER IN SEVERAL RESPECTS, FOR INSTANCE IN REHEARING ALMOST WITHOUT QUALIFICATION THE TEXTILE
INDUSTRY'S VERSION OF THEIR CONDITION. IT IS MORE CATEGORICAL ON
THE PROSPECT OF LEGISLATION THAN MILLS HAS HITHERTO BEEN ON THIS SUBJECT (MORE INDEED THAN HE NORMALLY IS ON ANY SUBJECT,)
THOUGH WE CAN PERHAPS DERIVE SOME COMFORT FROM THE FACT THAT HE
REFRAINS FROM SAYING EXPLICITLY THAT HE HIMSELF WILL SUPPORT SUCH
LEGISLATION. PROBABLY THE BEST GUESS IS THAT THIS IS SIMPLY THE
STRONGEST YET OF HIS MANY PLOYS IN SUPPORT OF SOME KIND OF AN INTERNATIONAL AGREEMENT (NOT NECESSARILY AN ALL EMBRACING ONE, IN SPITE OF WHAT HE HAS NOW SAID), WHICH HE VERY MUCH WANTS, AND THAT IF IT FAILS THE DEGREE TO WHICH HE WILL RESTRAIN OR SUPPORT LEGISLATION WILL STILL DEPEND ON HIS OVERALL VIEW OF THE SITUATION
AND, OF COURSE, ON HOW STRONGLY THE ADMINISTRATION STILL
OPPOSES UNILATERAL ACTION.
4. WE MUST WAIT A FEW DAYS TO SEE HOW REACTIONS DEVELOP HERE AND
WHAT HAPPENS IN THE TOKYO MEETING BEFORE TRYING TO DRAW CONCLUSIONS.
MILLS' STATEMENT CHANCES NOTHING IN THE UNDERLYING FACTS OF THE
SITUATION THAT THE U.S. TEXTILE INDUSTRY AS A WHOLE HAS DEMONS-
TRATED NO VALID CASE FOR EXTRA PROTECTION AND THAT IF THE UNITED
STATES GOVERNMENT TRY TO RAILROAD EXPORTING COUNTRIES INTO COMP- REHENSIVE RESTRICTIONS, WHATEVER THE MEANS, THEY WILL DO SO AT THE EXPENSE EITHER OF A CONFRONTATION IN GATT OR OF SERIOUSLY UNDER- MINING THE GENRAL AGREEMENT'S AUTHORITY. CLEARLY HOWEVER, THE STATEMENT WHATEVER MILLS HIMSELF INTENDS MUST STRENGTHEN
THE CHANCES OF LEGISLATION FOR UNILATERAL U.S. ACTION, AND OF THE SITUATION GETTING BEYOND THE ADMINISTRATION'S POWER TO STOP THIS, EVEN IF IT WISHES.
5. THIS DEVELOPMENT SEEMS TO ME TO MAKE IT ALL THE MORE DESIRABLE FOR THE PRIME MINISTER TO MENTION THE TEXTILE SITUATION TO PRESIDENT NIXON AT THEIR MEETING NEXT WEEKEND (SIR E. TOMKINS LETTER OF 24 JULY TO SIR A. SHELLING). MILLS' STATEMENT COULD BE QUOTED TO UNDERLINE OUR CONCERN.
F.C.0. PASS HONG KONG, UKMIS GENEVA, UKDEL BRUSSELS, TOKYO AND SEOUL.
MR. FREEMAN..
REPEATED AS
REQUESTED
[COPY PASSED TO HONG KONG GOVERNMENT OFFICES BY A.D.R.]
INTERNATIONAL TRADE DISTRIBUTION
COMMODITIES DEPT.
H.K.D.
AMERICAN DEPT.
W.EUR. DEPT.
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