0003230
6.F. 321
CONFIDENTIAL
Enclosure 3
Extract of telegram no. 551 from UKMIS Geneva & Eco
dd. 14th October, 1969.
U.S. Textile Policy.
At yesterday's talks on Hong Kong, which lasted all day, Nehmer led the U.S. team with support from representatives of State and Labour Departments. Brodie and Chotiner were not available. As agreed I took the chair.
2.
At the outset Nehmer rejected the selective approach. We then went through the Hong Kong Note paragraph by paragraph. Apart from giving some more recent figures which in no case showed any significant change in the overall situation, Nehmer laid emphasis on the following points:
3.
(1) The inport/consumption ratio for man-made fibres (mmf)
had now reached the lovel reached for cotton when the LTA was signed.
(2) Growth rates (for imports) naturally slackened as the
absolute totals got bigger, but in any event the growth rate for apparel imports in 1969 was higher than in 1968.
(3) In value terms the import share of the market was
significantly higher, showing the effect of the high' level of apparel imports (on this basis Hong Kong was the third supplier of unf, on a volume basis she was principal supplier of cotton, second in wool, fifth in waf and second, after Japan, in all textiles. (4) mnf imports were roughly doubling every two years and
were now higher than cotton imports so that absence of restraint on the former was anomalous (to which we replied that it was the LTA that was anomalous).
5) The net cost of these inports had risen by dollar 600*
million since 1967 (the "Textile Trade Deficit"argument).
To these points we replied in similar general terms, pointing out particularly that
(a) since the ratio of all imports to consumption was low and since a large part of the increase in mmf imports 1966-68 was from non-Asian sources (Nehner countered that this was mainly yarn and not fabrics or apparel) they could hardly be blamed for any situation of disruption that might exist,
(b) the increase in imports of textiles (all fibres) was lower than the increase in U.S. imports of all manu-
·factured goods' and not exceptional if compared with the general increase in world trade,
(c) the growth in imports was the result of a rapidly
expanding and shifting demand, with which the domestic industry had not been able to keep pace, especially for certain anf blends and for knitted goods,
/(a)
CONFIDENTIAL