CONFIDENTIAL
Annex 3
Restrictions on Imports of Cotton Textiles into the United Kingdom
This note describes the present arrangements and the essential background.
The inter-industry agreements
2. In 1959/60 the Lancashire industry, with Government encouragement entered into negotiation with their counterparts in India and Hong King and agreed on restraint arrangements to be operated by the exporting country. Similar agreements followed with Pakistan and a number of other countries which emerged as major suppliers during the early 1960's. There was little detailed categorisation of the quotas.
The five year restriction scheme 1966-70
3. This did not halt the flood of cotton textiles as more and more countries entered the United Kingdom market. H.M.G. therefore decided in 1965 that imports from all countries, with the exception of the developed countries of Western Europe, North America and Australasia, should be restricted for a period of five
years.
These restrictions, which are more extensive in coverage and more detailed in categorisation than those operated by any other country except the U.S.A., cover all yarn, woven grey and finished cloth and made-ups containing 50 per cent or more by weight of cotton. Knitted cotton cloth and made-ups were not restricted. The quotas, which were based on average imports in the three years 1962-64, represented a cut-back of more than 10 per cent on the 1964 level of trade. The annual increase is limited to 1 per cent.
4. The arrangements for the various countries are as follows:-
India has a country quota for approx. 12 m. lbs. of yarn and 201 m. sq. yds. of cloth and made-ups. The quota is divided into twenty categories with a measure of flexibility between them.
Hong Kong also has a country quota of approx. 6 m. lbs. of yarn and 193 m. sq. yds. of cloth and made-ups. In this case there are twenty-five categories and less flexibility than in the case of India.
The Global Quota applies to imports from all the other low-cost suppliers, including such countries as Spain, Yugoslavia, Greece, Israel, Malta and Gibraltar. The quota amounts to approx. 9 m. lbs. of yarn and 136 m. sq. yds. of cloth and made-ups. There are twenty-two parts. Approximately half is allocated to United Kingdom importers, who can use their licences to buy from any of the global quota countries. Most of the trade has gone to Pakistan. The rest is divided amongst the countries concerned on the basis of their past performance.
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With the sole exception of the licences issued to United Kingdom importers under the global qyota accounting for less than one-seventh of the trade the administration of the quotas is in the hands of the exporting countries.
5. Our trade agreements with Japan, the Eastern Area countries and China include quotas for cotton textiles, mainly expressed in value terms; they total rather under £3 m. There is very little categorisation.
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CONFIDENTIAL