Mr. Goldsmith said that in this case the main objects of
Hong Kong could be attained either:-
(-) by altering the definition of cotton textiles under the
CTA to allow a higher mix of m.m.)
f.
or
(t) by altering the wording of Article 6 to allow for sub-
stitution arising from a change in the market demand as
well as the deliberate substitution intended to avoid
restraint.
Mr. Stewart said that in his view the CTA was already too lax
in its rules for the imposition of quotas which left it to the
importing countries to judge whether or not "market disruption"
existed. The extension of the CTA to mixed fabrics including a
higher proportion of m.m.f. or the extension of its substitution
provisions would therefore be embarrassing to the UK in view of our
policy of liberal trade in textiles.
Mr. Goldsmith pointed out that, while we were all agreed that
it would be most desirable to avoid any restreint on non-cotton
textiles the point at issue was what would be the best way of
providing for some form of restraint if it proved necessary to do
so in the face of US pressure.
Mr. Stewart said that the Ministry of Technology view was that than those in H. CTA
they wanted stricter criteria for the imposition of q.r. on non-
cotton textiles. He thought that the US could make out a reasonable
GAT Article XIX case now on a few items i.e. shirts, blouses and
sweaters. This was because the imports of non-cotton garments of
these descriptions into the USA had risen very strikingly in the
last few years (he referred to statistics which he had recently
circulated) while there had been no increase in US production.
Imports of these three items now represented about half the total
US imports of garments.
/Mr. Goldsmith