CONFIDENTIAL
2
SO ENABLING THE INDUSTRY TO PLAN AHEAD WITH CONFIDENCE. QUOTAS, ON THE OTHER HAND, WERE LIKELY TO PROVE EVEN LESS EFFECTIVE IN THE FUTURE THAN IN THE PAST, AND WOULD NOT GIVE THE INDUSTRY THE INCENTIVE TO UNDERTAKE THE INVESTMENT REQUIRED TO MAKE IT MORE COMPETITIVE.
6.
U.K. IMPORTS OF COTTON TEXTILES HAVE NOW REACHED
53 PER CENT OF TOTAL DOMESTIC CONSUMPTION, AND THE GREATER PART OF THESE ENTER DUTY-FREE. THIS IS A FAR
HIGHER PROPORTION THAN IN ANY OTHER MAJOR DEVELOPED COUNTRY. IN THESE CIRCUMSTANCES WE HAVE THE ALTERNATIVES OF RE-NEGOTIATING THE PRESENT UNSATISFACTORY QUOTA ARRANGEMENTS OR OF ADOPTING AS A PERMANENT SOLUTION A TARIFF WHICH WOULD BE BROADLY IN LINE WITH THOSE OF OTHER DEVELOPED COUNTRIES. THE GOVERNMENT HAVE DECIDED THAT
THE RIGHT COURSE IS TO INTRODUCE A TARIFF ON IMPORTS FROM THE COMMONWEALTH PREFERENCE AREA ON THE LINES PROPOSED BY THE TEXTILE COUNCIL AS FROM 1ST JANUARY, 1972. FROM THAT DATE THE EXISTING QUOTA SYSTEM WOULD BE TERMINATED.
CONSIDERATION WOULD ONLY BE GIVEN TO THE RE-IMPOSITION OF
QUOTAS ON PARTICULAR PRODUCTS UNDER THE L.T.A. OR ANY
SUCCESSOR ARRANGEMENT ONLY IF TOTAL IMPORTS OF COTTON
TEXTILES ROSE SIGNIFICANTLY ABOVE THE PRESENT LEVEL CAUSING
DISRUPTION TO THE MARKET IN THESE PRODUCTS. THIS DECISION
WOULD OF COURSE BE SUBJECT TO ANY MODIFICATIONS THAT MIGHT BE REQUIRED IF WE JOINED THE E.E.C.
7. IN REACHING THEIR DECISION THE GOVERNMENT HAVE TAKEN FULL ACCOUNT ON THE ONE HAND OF THE FACT THAT A NUMBER OF COUNTRIES IN THE COMMONWEALTH PREFERENCE AREA HAVE RIGHTS TO DUTY-FREE ENTRY INTO THE U.K.
MARKET: AND ON THE OTHER THAT COTTON TEXTILES HAVE LONG BEEN TREATED INTERNATIONALLY AS A SPECIAL CASE. BY IMPOSING A TARIFF ON THEM THE GOVERNMENT HAVE NO INTENTION OF SETTING A PRECEDENT FOR FURTHER DEPARTURES FROM OUR TRADITIONAL POLICY IN REGARD TO COMMONWEALTH GOODS IN ADVANCE OF ANY GENERAL CHANGE OF SYSTEM WHICH MAY BE NECESSITATED BY OUR ENTRY INTO THE E.E.C.
8
THE EFFECT OF THE NEW ARRANGEMENT SHOULD BE TO REDUCE IMPORTS FROM THE DEVELOPED COUNTRIES WHICH HAVE BENEFITED
CONFIDENTIAL
/FROM