supplies in little over 12 months. Unless we had done what
we could to check it, excessive bunching would expose HMG to serious criticism from Lancashire; and we could expect
pressure for the reimposition of quotas which would frustrate HNG's declared purpose of fostering a cotton textile industry able to live with tariff protection alone. It would also
damage the trade interests of developing countries. Such
pressure could be resisted on the grounds that an initial dislocation was inevitable and might prove to be relatively short-lived, but the pressure would nevertheless be
*
embarrassing. Industry would claim that instead of maintaining
quotas to the end of 1971, HMG had in effect allowed them to
lapse up to 3 months earlier.
1
S
6. In response to enquiries from the Grey Cloth Importers
Association the Minister for Industry have repeated earlier warnings by officials that importers should not assume that
quotas will not be enforced to the end. This has not
produced any adverse reaction.
7. Quota enforcement without duty relief might nevertheless
have some adverse effect on our commercial relations with
the supplying countries. These would be faced with a
dilemma.
Either they could ship the whole of the 1971 quota
so that the goods arrive before the end of 1971 (and thus qualify for duty-free entry) and then cease shipments for
the last month or two of the year - perhaps two or three
months in the case of distant suppliers such as India and
Hong Kong. This would involve an unwelcome interruption or
re-phasing of production. Or they could maintain an even
rate of shipments, in which case importers would have to
pay duty on shipments made within quota which arrive in
ту