CONFIDENTIAL
In any
Term Arrangement and would be strongly opposed by exporting countries. case it is difficult to see how a Buying Commission could be established consistently with Article III (4) of the GATT, which prohibits the setting up of a State monopoly to increase the protection afforded to the domestic industry.
16. The Board of Trade are therefore disposed to accept the Textile Council's proposal that the quotas should be replaced by a tariff of only 15 per cent on cloth. They recognise that a tariff would almost certainly reduce imports from India substantially and for this reason they consider that, because the tariff should yield £8-10 million in additional revenue, it would be reasonable to offset at least part of the loss through additional aid. The Board also recognise that, if the tariff solution were to be adopted, quotas on individual categories of cotton textiles from particular sources could be re-imposed only in proved cases of market disruption. The Textile Council accept this.
17.
If Ministers agree that a tariff should be imposed on imports of cotton textiles from the Commonwealth, the Board of Trade will wish to consider with the Departments concerned how the discussions with the Commonwealth Governments concerned should be handled.
6
CONFIDENTIAL
10th June, 1969