CONFIDENTIAL
in reference than the "like or directly competitive products" whose domestic producers are affected).
Comprehensive Restraints
16. If Trezise should argue that the U.S. political require- ment can be met only by comprehensive restraints, the main
comments we might offer are:
yes but
(i) While the GATT may be stretched to accommodate ́ action by the U.S. on a few items where there is evidence of injury, without the grave risk of a chain reaction extending to other countries and
other industries, action by the U.S. across the
board on non-cotton textiles would be bound to
provoke similar action at least by other main
producers of textiles. The EEC have made this clear and we would be under similar pressures.
11
(11) The outcome might be initially something like
the L.T.A. applied to non-cotton textiles. Whatever
our own views of that prospect may be, the acquiescence of the Japanese and of developing countries
in general would be much more difficult to secure
now than it was for the L.T.A. at its inception.
Other Issues
17. Trezise may be expected to say that if the foregoing is the best we can hold out, the risk of unilateral action by Congress is going to be acute. We should if so seek to draw him out on the form of such possible action; and on the ability, if any, of the U.S. Administration to offer compen- sation to those (especially Hong Kong) whose trade would be restricted, firstly on the basis of present legislation, and secondly on the assumption that the Administration's current Trade Bill is passed.
Our object should be firstly to bring home to Trezise
6.
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