CONFIDENTTAL
SPEAKING NOTES
The paper circulated by the President of the Board ca
Trade sets out fairly the arguments for and against the
action which he proposed.
From the domestic standpoint,
there are some obvious advantages in the tariff solution,
even though it is impossible at this stage to predict
with any accuracy the likely effect of a change from tho
quota to a tariff on the longer-term prospects of the
industry.
2. But as the paper admito (paragraph 16) the balance of
advantage from the international standpoint would seem to lic
in a continuation of the present quota systen for a few morO
ye ara. It may be useful to amplify the reasons given in the
paper in support of thio view.
General Considerations
3. Cotton textile production in shic country is expected
to continue to declino. Imports are not by any means wholly
to blame, for this situation which partly reflects the growing
switch of demand to other fibros, The contimod decline might,
however, make it difficult in the years to come to replot
a demand for further protection either by an increase êm tho tariff, by countervailing duties (particularly if countries
such as India resorted to subsidios to maintain the levot
of their exports), or by the re-imposition of quotes in
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CONFIDENTIAL