Sir A. Galsworthy
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SWEDISH TEXTILI NEGOTIATIONS
Mr. Jordan is in Stockholm negotiating with the Swedes on the requests they made in April that Hong Kong should continue the restraints on two items of non-cotton textiles that wore agreed last year and
should undertake new restraints in three additional items.
2.
Last week we had the usual last minute cliff-hanging exercise of persuading the Board of Trade to agree to negotiating instructions for the Hong Kong delegɛtion, despite the fact that in all essential particulers Hong Kong's proposed instructions had been with us in Whitehall since the end of April. You will recull the similar trouble we had in the case of the Swedish and Norwegian negotiations in June last year; and there was a repetition early this year when there were further negotiations with the Swedes in Geneva.
3. Basically, our difficulties throughout the history of this matter have been caused by an unresolved cleavage in the Board of Trade -
between Industries Division and C.R.E. - on whether Hong Kong should be
allowed to concede restraints outside the cotton textile field in view
of their impact on the \‚Ã's,
\.X's. domestic industry and international trade policy objectives. The broad policy issues involved are set out briefly in the attached note.
These issues have been with us since
June last year (apart from the complication of the recent Stana' initiative for an extension of the C.T.A. (Cotton Textiles Agreement) to cover non-cottons). But there is now a new factor in that H.N.G. is in the process of reconsidering its policy towards the U.K. cotton textile industry in the light of the recommendations of the Textile Council Report. The principal recommendation is that existing quota restrictions sho.ld be dismantled in favour of a tariff on Commonwealth
imports of cotton textiles. A submisai on put up by Industries Division on the Swedish negotiations stated that increasing restraints endanger present policy objectives: "What we are seeking is a consistent policy towards our textile industry, with protection based on the tariff (which is internationally agreed to be the proper form) rather then on quotas, and with reliance on the safeguards in the GATT." Qite separately we received an intimation from the Board
of Trade