CONFIDENA A
United States and for other purposes") which Mr. Wilbur Mills, its
chairman, had introduced in April. Following the breakdown of the
Japanese negotiations, the U.S. Administration gave its backing to
the "Mills" Bill. It was "reported out" by the Ways and Means Committec
on 13 August and will be debated in the House after business is
resumed on 9 September.
Provisions of the Bill
4. The Bill contains provisions for quotas to be imposed from 1971,
for a five year period, on a wide range of imports, including textiles
and footwear. The base for the calculation of the quotas is to be
the average of imports during the three years 1967 to 1969. For the
years after 1971 the total quantity of imports of each category of
textile articles is to be limited to the preceding year's quota plus
an increase to be determined by the President. The increase is to be
limited to not more than 5% of the total permitted for the preceding
year.
5. The President may exempt from control imports which he determines
are not disrupting the U.S. Market. He may negotiate agreements under
which imports of textiles would be controlled. Such imports and those
of cotton textiles (which are at present limited under the terms of
the LTA) would also be exempt.
The Effect on Hong Kong's Textile Exports
6.
If the mandatoryquotas are applied in 1971, Hong Kong's losses
in exports of non-cotton textiles could reach US $40-50 m per annum
(i.e. about 50 per cent of present exports.) The Hong Kong Government
think that it would be less damaging to their interests if they were
to negotiate a bilateral voluntary restraint agreement with the
Americans on the export of non-cottons to the U.S. They would hope to
obtain higher quotas under a voluntary arrangement than they would
under the proposed legislation; and they would prefer to have the
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