2
CONFIDENTIAL
Mc
Sent under comp slip
18819/20
to Ballescombe
13/393/5
Mr. Rippon's Visit to Hong Kong
Background Note
Hong Kong's Textile Exports to the U.S.A.
The Effect of the proposed U.S. legislation to restrict imports
General
Since 1961 Quantitative restrictions on trade in cotton textiles
have been permissible under the terms of a special derogation from
the General Agreement on Tariffs and Trade, known as the "Long Term Arrangement" (LTA) or the "Cotton Textiles Agreement" (CTA). Trade
in non-cotton textiles is generally free of restraint, except for
The United States textile industry has campaigned vigorously
for a limitation on the expansion of exports of non-cotton textiles
from Asian producers, especially Hong Kong, Japan, Korea and Taiwan.
In his electoral campaign in 1968 Mr. Nixon promised to protect the
industry.
tariffs.
2.
The Americans have tried to persuade textile exporting countries
in Asia to accept long-term voluntary limitation of non-cotton textile
exports to the United States. The GATT permits restrictive action
only on a selective basis where injury can be proved. The Americans
have yet to prove injury; it is doubtful whether they can do so,
except perhaps on a few items. In bilateral negotiations with the
Japanese they have tried to persuade them to limit, "voluntarily,'
their exports of non-cotton textiles to the United States. The
Japanese refused the limits proposed, on the grounds that their
textile industry would not accept this withdrawal of their rights
under the GATT.
The "Mills" Bill
3. During the course of these negotiations the Ways and Means
Committee of the House of Representatives was conducting a public
hearing of a bill (H.R. 18970; "To amend the Tariff Laws of the
CONFIDENTIAL