{
CONFIDENTIAL
restrictions on imports from developed countries. Imports from
the Commonwealth enter duty free; the n.f.n. rates are 71 per
cent on yarn, 171 per cent on cloth and 20 per cent on nost
made-ups.
Knitted cotton textiles, principally under-garments,
sweaters and leisure shirts are not subject to quota.
United Kingdom Tariff
3.
The Government have reaffirmed
The present British system of import quotas on cotton
textiles is complicated and has become increasingly unsatisfactory.
As a result of a study of the United Kingdon textile industry
carried out in March 1969, the Textile Council recommended,
inter alia, that the existing system of quotas should be
abandoned as being too unpredictable and uncertain in its effects,
and instead a tariff should be imposed on imports of cotton
textiles from the Commonwealth.
the decision of the previous administration that, with effect
from 1 January 1972, there would be no quantitative restrictions
on imports from non-Communist countries, but Commonwealth cotton
textiles would attract a duty of 85 per cent of the m.f,n. rate
(i.e. 6 per cent on yarn, 15 per cent on cloth and 17 per cent
on most garments). Imports of cottons from EFTA and the Irish
Republic would continue to be duty free because of our free trade
area commitments.
L. The effect of this change of policy should be to reduce
imports of cotton textiles from developed countries; the
developing countries of the Commonwealth generally (possibly with
the exception of India) should not be adversely affected.
Hong Kong in particular should be able to maintain the volume of
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