(v1)
(vii)
The possibility of putting on a surcharge if imports reached disruptivo levels was briefly discussed. It would be commercially and administratively more flexible to operate than q.r., but could involvo oompensation under GATT rules. However, the Americans appeared to have got away with it, and it might be that the EEC would be glad to support such a novo.
The surcharge was certainly casier than trying to achievo cut-back in imports. This was bost done by a reduction in quota levols, but if quotas had been removed and we delayed taking action against rising inports, we would be faced with a high base year if wo adhered to the LTA rules. The best solution would therefore be to re-negotiate quotas, applying Art 19 rather than the LTA when necessary.
(viii) Mr Ridley then put forward the following general principles to act as
guide lines:-
(a) Whatever action we took, it should as far as possible be in line with the EEC's policies actual or potential. On cottons, this would mean getting as close as possible to their Art 4 agreements.
(b) We ought to try to get into discussion with the EEC telling them of our possible moves towards safeguards, but not of course before obtaining Ministerial agreement to the submission.
Wo
(o) It would be desirable to initiate consultations with the BEC
about fall-out from the US action on non-cotton textiles. should try to devolop a common line with them on non-cottons as a counter to the American policy.
(a)
On the level of imports into the UK, we should either try to maintain the status quo or initiate cut-back action. There wero two good arguments for the latter apart from the pressure from Lancashire: it would get us nearer to the EEC position whon we hed to assimilate to their Art 4 agreements, and it might bo easier in the long term to get free circulation if there were not gross disparities between our import levels and theirs.
(a) To must try to prevent forestalling by importers as far as
possible, but without introducing too many restraints. We had to bear in mind that future restraint levels could either be on the basis of recent past performance or, if we modelled ourselves on the levels in the EEC's Art 4 agreements, cn a proportionate basis of our imports compared with theirs...
27 October 1971
Circulation: Those present
Mr J Hale, Commodities Dept FCO
Mr Gildea CRE3
Mr Nicoll CRES
Mr Lam CRE1 Mr Gray CREM Mr Barry CRES
: