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the substitution of a tariff for quotas would enable the developing countries to compete freely
, on cqual terms with the developed countries, a large part of whose considerable trade has been built up under the protection of the quota arrangerents.
f)
a decision to rely on a moderate tariff for protection would be in mirked contrast to the attitude wi icu has been adopted by Mr. Stans, the United States Secretary of Commerce, who has been trying to persuade other countries, so far without success, to limit their exporte to the United States.
The objections to a tariff on imports from the Commonwealth
are clearly formidable because :*
a) India, Pakistan, Canada, Australia, New Zealand and South Africa have contractual rights to duty-free entry. We should have to seek to negotiate with each of these countries a waiver of its rights and if in any case we failed, we should then have to consider whether it would be worth our while to denounce the whole Agreement with that country or to abandon our intention of proceeding with the tariff solution. The Commonwealth Froforence system would have been breached by the United Kingdom for the first time for more than a generation and although the proposed change would have no pinctical effect on imports from Australia, New Zealand and South Africa, those three countries would see this as a sign of worse to ocne and would no doubt argue that we were writing off the preference in advance of joining the 2.2.0. Even if we succeeded in negotiating waivers, there is a risk that we might cave to pay a price (which cannot be quantified) either imediately or over a period in the form of suppression of some of our preloronces in their markets; this risk to our trade would bo greatest in the case of Canada which has built up a subst ntiul trude in cotton textiles since quotas wore imposed on India, Pakistan and Hong Kong. Commonwealth countries generally would also resent the fact that Portugal and the Irish Republic would gain a preforence against them in our market;
b) India has a substantial trade with this country in cotton textilos. Since quotas on her exporte vere first imposed (eflectively in 1959), new suppliers have appeared, both inside and outside the Commonwealth, and in recent years the effect of the bilateral quota for India has been to protect her from competition from other developing countries, particularly Fakistan. Any change in the quota arrangements would almost certainly operate to her dic- advantage and the imposition of a tariff, accompanied by
/the abolition
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