CYPHER/CAT A.
ROUTINE WASHINGTON
TELEGRAM NO 39
CONFIDENTIAL.
NEUTRAL.
CONFIDENTIAL
ра
Meur 9/1
TO FOREIGN AND COMMONWEALTH OFFICE
7 JANUARY 1970.,
Rey Bent 1/1/20
Re capes toisellar, 4.K. for office.
Then US File,
Fone-office
ADDSD TO FCO TELNO 39 OF 7 JANUARY REPTD FOR INFMN UKMIS GENEVA
HONG KONG TOKYO,
(FCO AND GENEVA PLEASE COPY TO HONG KONG GOVERNMENT OFFICER)
U.S. JAPAN TEXTILE NEGOTIATIONS.
IN CASE TOKYO HAVE NOT YET OBTAINED THE TEXT WE ARE SENDING
BY BAG COPIES OF A NEW DRAFT EXPORT RESTRAINT AGREEMENT WHICH WAS
HANDED TO THE JAPANESE FOREIGN OFFICE BY THE U.S. EMBASSY ON 2 JANUARY.
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2. DRAFT, WHOSE PROPOSED DURATION IS FIVE YEARS STARTING ON 1 JANUARY, WOULD IMPOSE SPECIFIC LIMITS, BASED ON MID-1968 TO MID-1969 PERFORMANCE, ON 9 WOOL AND 19 MAN-MADE CATEGORIES - COVERING SOMETHING LIKE THREE QUARTERS OF THE TRADE. LIMITS
WOULD GROW OR DIMINISH ANNUALLY IN PROPORTION TO CHANGES IN TOTAL AMERICAN MARKET. ALL CATEGORIES NOMINALLY UNLIMITED WOULD BE
STOPPED AT FIXED TRIGGER-POINTS SUBJECT TO ''CONSULTATIONS'' IF
THE JAPANESE REQUESTED THEM. TRIGGER-POINTS WOULD BE THE GREATER OF EITHER 1968 PERFORMANCE OR 100,000 SQUARE YARDS FOR ALL WOOL CATEGORIES, 350,000 MAN-MADE APPAREL, 509,900 MAN-MADE NON-APPAREL. DRAFT INCLUDES CARRYOVER OF UP TO 5 PERCENT BUT NOT SWING.
3. IT IS INTERESTING THAT, AT LEAST DURING JANUARY-OCTOBER 1969, JAPAN WAS NOT THE PRINCIPAL SUPPLIER IN AT LEAST SEVEN CATEGORIES TO BE SPECIFICALLY LIMITED. (KOREA 4, TAIWAN 2, HONG KONG 1.) 4. ACCORDING TO REPRESENTATIVE HERE OF JAPANESE INDUSTRY WHOSE INFORMATION IS USUALLY RELIABLE (SOURCE TO BE PROTECTED) JAPANESE PRIME MINISTER HAS NOW GIVEN FOREIGN MINISTER AND MINISTER OF
INTERNATIONAL TRADE AND INDUSTRY JOINTLY A FREE HAND TO SETTLE
TEXTILE. QUESTION. THEY ARE SAID TO HAVE DECIDED WITH CABINET
APPROVAL TO INFORM THE U.S. EMBASSY THAT THE LATEST PROPOSAL IS
TOTALLY UNACCEPTABLE: THAT JAPAN CANNOT UNDERSTAND THE CONTINUED
IGNORING BY THE U.S. OF THE FUNDAMENTAL JAPANESE REQUIREMENTS FOR NEGOTIATION ( MULTILATERAL DISCUSSION, EVIDENCE OF INJURY AND SLECTIVITY ): AND THAT THERE SEEMS AT THE MOMENT TO BE NO BASIS FOR NEGOTIATION AT ALL.
FCO PASS UKMISSION GENEVA HONG KONG AND TOKYO. MR. FREEMAN.
[REPEATED AS REQUESTED],
COPY TO:
INTERNATIONAL TRADE DISTRIBUTION:
COMODITIES DEPT
ICAN DEPT
H.K. DÆFT
RECLIVED IN REGISTRY No.51
-9 JAN 1970
HKK6/04/1
H.K. GOVERNMENT OFFICE 54 PALL MALL, S.W.1.
La La La La La
CONFIDENTIAL